Microsoft Launches Investments In Black- And African American-Owned Partner Businesses

The company is seeking to increase the number of Black- and African American-owned partner businesses in its U.S. partner community by 20 percent within three years.

As part of a broad initiative aimed at bolstering racial justice in the U.S., Microsoft on Tuesday announced investments to bring more Black- and African American-owned partner businesses into its U.S. partner community.

The investments include a $50 million partner fund to assist such businesses with access to capital during their startup phase, along with $20 million in financing for supporting cash flow requirements, Microsoft CEO Satya Nadella said in an email to employees, which Microsoft posted on its website.

[Related: Apple Unveils $100M Racial Equity And Justice Initiative To Focus On ‘Unfinished Work’]

"We recognize that a stronger and more productive ecosystem requires better representation of the diversity in our communities," Nadella said in the post. "We will evolve our engagement with our supply chain, banking partners, and the broad Microsoft partner ecosystem in this effort."

Saying that "we know how important partners are to the growth of our business," Microsoft is seeking to increase the number of Black- and African American-owned partner businesses in its U.S. partner community by 20 percent within three years, Nadella said.

The tech giant is also committing to spend $3 million on training programs--including tech solutions, go-to-market readiness and financial management--for such partner businesses, he said.

Miguel Zamarripa, CIO of Colorado Springs, Colo.-based Simpleworks IT, said Microsoft has already had a strong track record in making investments to address social injustices "for many years," and said this announcement will only strengthen the efforts.

"I applaud their commitments against racial injustice and appreciate their generosity in helping to make positive change," Zamarripa said.

The partner-focused measures are among a number of commitments laid out by Nadella on Tuesday as part of Microsoft's new $150 million investment into its diversity and inclusion initiative.

Members of the Microsoft community "unequivocally believe that Black lives matter," Nadella said. The investments come after Microsoft's “senior leadership team, board of directors, and I have spent time reflecting, listening, learning, and discussing what role the company – and all of us collectively – must play in helping to drive change,” Nadella wrote.

The announcement comes after weeks of widespread protests of mistreatment and systemic racism against members of the Black and African-American community in the U.S.

"With significant input from employees and leaders who are members of the Black and African American community, we have developed a set of actions that we believe are both meaningful to improving the lived experience at Microsoft, as well as driving change in the communities in which we live and work," Nadella wrote. "Today, we are making commitments to address racial injustice and inequity for the Black and African American community in the United States."

Another step announced by Nadella is an effort within Microsoft to increase its representation and inclusion. By 2025, company is committing to double the number of Black and African American individuals who are serving as managers, senior individual contributors and senior leaders in the U.S.

"Managers who have a deep understanding and commitment to building inclusive culture are key to our company’s success. Starting in FY21, our training on allyship, covering, and privilege in the workplace will be required for all employees, with additional new content on understanding the experience of the Black and African American community," Nadella said. "Because leadership sets the tone, we will have required live sessions for CVPs and EVPs to ensure they better understand the lived experience of these specific communities."

Microsoft also plans to "strengthen our intentional career planning and talent development efforts" across its workforce, starting with Black and African American employees, he wrote.

"We will expand on our leadership development programs for select Black and African American midlevel employees and their managers, to help prepare for promotion to Director/Principal," Nadella said. "For Director/Principal level, we will create a new development opportunity to expose them to the leadership expectations of the Partner/GM level and match them with senior-level sponsors and mentors. For Partner/GMs, we are continuing to invest in the dedicated leadership development programs."

Meanwhile, in the next three years, Microsoft says it will also double the number of suppliers that are Black- and African American-owned--with plans to spend an additional $500 million with those existing and new suppliers--while also doubling the percentage of its transaction volumes through Black- and African American-owned banks and external managers.

"We will create a $100M program that will make its initial investment in collaboration with the FDIC to target Minority Owned Depositary Institutions (MDIs), which directly enables an increase of funds into local communities (businesses, restaurants, housing, etc.)," Nadella said. "And, we will establish a $50M investment fund focused on supporting Black- and African American-owned small businesses."

Other measures will include a $50 million effort to "strengthen and expand our existing justice reform initiative," including "increasing work advocating both in the Puget Sound and nationally, including in the communities where our employees live," Nadella wrote. "We will build on this foundation by using data and digital technology toward increased transparency and accountability in our justice system."

The announcements follow Nadella's June 1 post saying that Americans "must do more" to combat racism within communities. The post came after George Floyd died May 25 while in Minneapolis police custody, after a white police officer knelt on his neck for nearly nine minutes.

"Empathy and shared understanding are a start, but we must do more. I stand with the Black and African American community and we are committed to building on this work in our company and in our communities," said Nadella, who was born in India and initially came to the U.S. to earn his master's in computer science, in the June 1 post.

Additionally, Microsoft plans to "take important steps to address the needs of other communities, including the Hispanic and Latinx community, across the company in the next five years," Nadella wrote in the announcement Tuesday.