ServiceNow treasurer Tim Muindi reviews how a racial equity fund is making a difference.
A year ago during Black History Month, ServiceNow’s Tim Muindi—a senior treasury director at the time—shared with other NeuGroup members his role in launching a $100 million racial equity fund managed by RBC Global Asset Management. The fund’s objectives centered on boosting homeownership, affordable housing and entrepreneurship in 10 Black communities where ServiceNow employees live and work.
- A year later, Mr. Muindi—now the software company’s treasurer—sat down for a virtual interview with NeuGroup Insights to review the deployment of the capital and the impact of the investment. “What I’m really proud of is the fact that we’ve been able to really impact low- and moderate-income [populations],” he said. “When we look at the allocation of our fund, it was done to target a demographic that is really marginalized.”
- Mr. Muindi also discussed what Black History Month means to him, challenges he’s faced during the course of a 23-year career when he’s often been the only Black person in a company’s finance department, and steps treasury teams can take to improve diversity and inclusion. Please watch a video interview on those topics below.
Numbers and people. ServiceNow provided all $100 million of the racial equity fund upfront and RBC invested it throughout the year, completing the deployment by year-end 2021, Mr. Muindi said. Where it went:
- More than 90% funded home ownership, supporting about 360 mortgages. Although a lot of information about mortgage recipients is undisclosed, RBC’s experience and use of census data helped pinpoint communities with large Black populations, Mr. Muindi said.
- In the end, 97% of the borrowers benefitting from the fund earned less than 80% of the median income in the area where they lived. Mr. Muindi said the lack of more detailed data about end beneficiaries is not a deterrent to funding mortgages, adding, “We’re making a difference in the community.”
- Half of the remainder funded various improvements and enhancements in about 1,100 rental units. The vast majority of the affordable housing funds went to a pair of properties in Chicago where 99% of the population is Black, with many women-led households making less than $9,000 per year, Mr. Muindi said.
- The money went toward rehabbing the properties, “making sure that they have upgraded appliances, paint jobs, also building playgrounds where the kids can go and play so it feels more like a community rather than just a place of dwelling,” he said. “That was really a great outcome for us to see that.”
- About 15 businesses in 13 different industries received the other half of the remaining funds. The recipients of the entrepreneurship funds included a small construction firm in Florida that Mr. Muindi said provides employment to about 70% of the area’s Black population.
Returns and the road ahead. Mr. Muindi said ServiceNow earns a return on the fund, but that’s a secondary objective to having an impact in Black communities. “Any returns we get we’re putting right back in the fund to continue building these sustainable opportunities in these communities.”
- Looking ahead, ServiceNow will now evaluate its options, including looking for investment opportunities beyond the racial equity fund. “There’s a lot of room out there for us to continue making an impact, so we’ll be very thoughtful about how we deploy any additional investments,” Mr. Muindi said.
- Speaking broadly of finance teams, Mr. Muindi said, “We have to get off the sidelines. And that’s been a big theme for me. If you want to drive change you have to get off the sidelines, get on the field. It’s not perfect, we’ll make mistakes. But we’ll be trying and then we’ll learn through that.”
