How a Company With a Mission of Supporting Veterans is Tackling Racial Equity
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Members of the US Army walk at New York’s Veteran's Day Parade in 2012. lev radin/shutterstock
USAA isn’t the only company grappling with racial injustice right now, but it’s an issue that has a significant potential impact on the community it serves, given the demographics of its membership and employees.
The financial services company traces its roots back to 1922, when a group of Army officers banded together to self-insure each other’s cars—hence its official name, United Services Automobile Association. Today, the company’s core business is advancing the financial security of 13 million members, all of whom have served or are serving in the U.S. armed forces. Its commitment to the military also extends to the composition of its staff: One in four of its 35,000 employees are veterans or military spouses.
That means its stakeholders and workforce are more diverse than national averages, and perhaps in recognition of that fact—along with the sweeping racial justice movement that has emerged since the summer—USAA recently made a $50 million commitment over three years to advance racial equity.
President and CEO Wayne Peacock characterized the pledge as part of the company’s fundamental mission to care for military families, a “community that reflects our nation’s racial, social and economic diversity—and the complex issues that come with it.”
Changing demographics
U.S. racial demographics are changing. In 1980, 80% of the national population identified as white. New estimates for 2020 show a far more diverse country, with nearly four in 10 Americans identifying as racial or ethnic minorities. That number is a bit higher, at 43%, for people in the military, USAA’s primary stakeholders.
The company’s workforce is even more diverse relative to national figures. Forty-seven percent of USAA’s employees identify as people of color. By comparison, the current racial composition of the U.S. workforce is 78% white, 17% Hispanic or Latino and 13% Black.
To challenge some of the inequities the military community faces, the company is dedicating funds in three areas of racial disparity: education, employment and income.
Supporting vets
The company’s philanthropy has always been grounded in supporting veterans, but its philanthropic arm, the USAA Foundation, only fully aligned investments with veteran’s causes in 2014, after a rigorous evaluation of its strategy. The mission makes good sense for USAA, but is rare on a broader level. Less than 5% of corporate foundations make supporting veterans a top five priority.
The foundation works to address issues of homelessness, inclusive medical care and employment strategies for vets. A signature program also supports military family resiliency, supporting spouses and children, and families of the fallen.
When COVID-19 hit, USAA stuck to its guns, making the largest one-time gift in its history—$30 million—to support military service members, veterans and families impacted by the virus. Its multi-year racial equity commitment is for $50 million, aimed at largely the same groups.
Funding racial equity
USAA’s approach to leveling the playing field employs several best practices to achieve sustainable change. The commitment came from the top, but also includes direct representation of people of color within the company. Part of the overall response involved the creation of a CEO of diversity and an Inclusion Council composed of dozens of employees from across the company. They’ll help guide ongoing racial justice efforts and have a voice in decision-making, reporting directly to the CEO.
President and CEO Wayne Peacock says the company is striving to create an environment where all employees can reach their full potential and “feel like they truly belong,” beginning with internal recruiting, training and retention strategies to build a pipeline of diverse talent.
USAA will also be funding employment, job training and education programs outside of the company. Other efforts will address income equality for low-income military communities and communities of color, and investing in businesses owned by veterans, minorities, women, the LGBTQ community and people with disabilities.
Round one
The first round of grants totals $7 million for education, employment programming, and closing the racial income gap in places where “we live and work.” For USAA, that largely means San Antonio, where it’s headquartered.
Educational grants include $2 million to the Alamo Colleges Foundation, the philanthropic arm of five Alamo Colleges in the San Antonio area, to support 335 Alamo Promise Scholarships, as well as internships and emergency assistance.
A $1 million contribution to the University of Texas Foundation’s Bold Promise will provide close to 100 scholarships to high-achieving minority students from low- and moderate-income backgrounds.
And a grant supporting the San Antonio-based Executive Leadership Council, a local leader in opening channels of opportunity for Black executives, will serve a number of purposes, from scholarships and recruiting programming, to loans and skills training for Black and Latino entrepreneurs.
Two additional grants are aimed at skills training and economic opportunity. A $1.2 million investment in Project Quest, one of San Antonio’s leading workforce development initiatives, will underwrite upskilling and reskilling for Black and Hispanic San Antonians training in STEM fields.
Citing data from the U.S. Chamber of Commerce’s Equality of Opportunity Initiative showing that Black-owned businesses are less than half as likely to get financing as white-owned firms, and three times more likely to suffer the impacts of undercapitalization, USAA made a $2 million contribution to LiftFund. Support will provide 60 non-traditional, low-interest loans for Black and Hispanic entrepreneurs, 240 individual mentorships, and 80 slots in an accelerator program for women, minority and veteran-owned business owners.
Solving the intractable problems of systemic racism will require these and many other interventions, and gauging progress will be hard, especially in the near term. But at USAA, the work has begun.
