You may remember Goldman as the bank accused of making billions of dollars while ordinary people were losing their homes during the financial crisis. Or as the firm whose traders were said to have misled investors by selling them, as one memorable internal email described it, junk that nobody was dumb enough to take first time around.
Now Goldman executives say the firm wants to give something back. But Goldman also has been trying to polish its reputation with ordinary Americans and politicians in Washington. Engaging wasnt just the right thing, it was necessary, especially in the wake of the financial crisis when people said we werent doing enough, said John Rogers, Goldman Sachs chief of staff, and a driving force behind the banks philanthropic efforts.
The shift is particularly noteworthy because Goldman unlike most corporations with large charitable efforts has no presence on Main Street.
But this is still Wall Street, where money is ultimate measure of worth, and how it is allocated creates resentments. Executives inside the bank say the Goldman Sachs Foundation, the clearinghouse of the companys giving, has been given more resources at a time when the bank itself has been cutting back sharply on expenses and people on big trading desks.
This has created bitterness among some employees bitterness stoked by the favoured status seemingly granted to Dina Powell, who runs the foundation. At a firm where pay is almost always tied to what money you bring in, Powell, who is in charge of giving money away, has made roughly $2 million annually in some recent years, according to people familiar with her compensation.
Then there is the way Goldman has been going about its giving. Goldman is a firm that prides itself on discretion, but it isnt giving away its billions quietly. It has bestowed the Goldman Sachs logo and hundreds of millions of dollars on two splashy programmes, one that supports women in developing countries and another that helps small businesses. Its run as if its a Broadway show, said one Goldman employee who asked not to be named because of a firm policy against speaking to the news media.
Corporate philanthropy might seem among the least controversial of topics, but it does raise questions for some shareholders. Warren Buffett, whose holding company Berkshire Hathaway is one of Goldmans largest shareholders, says he fully supports the work of the Goldman charities, but is troubled by the principle of large-scale corporate philanthropy. After all, most of the money comes out of the firms profits out of shareholders pockets.
I think Goldmans programmes are the best that I have seen, Buffett said, but I personally dont like the idea of giving away other peoples money.
Balancing shareholder concerns with corporate responsibility to a wider community is tricky.
In 2012, Goldman gave $241.3 million to charity, according to The Chronicle of Philanthropy, making it the fourth-largest corporate giver in America. That is vastly more than it gave to charity before the real estate collapse in 2006, the company donated $47 million to charity and comes at a time when the pace of charitable giving in corporate America has slowed.
In response to the suggestion that Goldman has poured money into the programme at the expense of jobs elsewhere in the firm, Rogers said that Goldman has been a good steward, contributing more money in good times to lessen the burden in tough times. He disputes the notion that the programmes are showy. We are celebrating the success of women and entrepreneurs, he said of two of its biggest programmes.