For years Goldman Sachs gave only a tiny fraction of its profits, less than 1 percent, to charity. Then the depression hit in 2008 and the huge bank was in the public’s crosshairs for its role in that collapse and the billions it continued to give out in bonuses.
Even as millions of people were losing their homes and tens of millions were losing their jobs, Goldman’s CEO Lloyd Blankfein continued to bluster, famously declaring his bank was “doing God’s work.” He defiantly declared that Goldman Sachs would not mend its ways. “I’d like [Goldman’s employees] to continue to do what they are doing. I don’t want to put a cap on their ambition. It’s hard for me to argue for a cap on their compensation.”
But Goldman did change one of its ways of doing business. It increased its charitable giving more than six-fold over pre-recession levels, but the purpose was less to better the world than to better Goldman Sachs’ image and therefore its bottom line.
The New York Times reports, “… in late 2009, the company faced mounting criticism about the billions of dollars it was paying out in bonuses in the wake of the financial crisis. The firm needed some good public relations. And fast. Goldman committed $500 million over five years to another program, 10,000 Small Businesses, which helps businesses in the United States and Britain…The small business project, the firm hoped, would put it in the good graces of Main Street, and give people a better understanding of the firm.”
Goldman is spending handsomely to promote its small business friendly image. But when it comes to actually helping small business, Goldman is far more miserly. We took a look at Goldman’s recent small businesses lending and compared it to that of community banks. Goldman’s $113 billion commercial bank unit has a pathetic $10 million in small business loans on its books, or about 1/100th of 1 percent of its assets. Community banks (those with assets under $1 billion) currently have about $189 billion, or 12 percent of their assets, in small business loans, more than 1,000 times what Goldman Sachs provides.
Goldman is not above using small businesses, but it still won’t actually serve them.
Stacy Mitchell is Director of the Independent Business initiative at the Institute for Local Self Reliance. David Morris is Director of the Public Good Initiative at the Institute for Local Self-Reliance.