Charitable Giving, Goldman Style

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Last week, a humbled Goldman Sachs 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, Goldman’s CEO, to The Times of London, where he claimed he was doing “God’s work.” In its coverage of the new program, the New York Times 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 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.