Charitable Giving, Goldman Style

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Last week, a humbled Goldman Sachs [5] canceled its holiday parties and trumpeted a noble new program to mentor and loan to small businesses. The cost, $500 million, made headlines across the country. The program was announced on the heels of an embarrassing and widely panned interview given by Lloyd Blankfein [6], Goldman’s CEO, to The Times of London [7], where he claimed he was doing “God’s work.” In its coverage of the new program, the New York Times [8] noted that the amount was about 3 percent of the $16 billion in bonus money laid aside for Goldman executives this year. And the Wall Street Journal [9] went a step further interviewing a variety of tax experts who noted that a big chunk of the money will go to charitable institutions creating sizeable tax deductions for Goldman. “All in all, tax experts say, the ultimate cost to Goldman could total roughly $136 million to $150 million—70% or more below the half-billion figure that helped generate so much publicity for the firm this week. Interest income from the loans could lower the final bill even more.” Thanks to these reporters for a little truth in lending.