What do you do when you’re a major corporation, being criticized for giving away too much money to your employees? Give more of it away—but to a good cause.
Last month, Goldman Sachs launched a plan to give $500 million to 10,000 small businesses in New York. Yesterday, the company announced that it would commit $61 million to affordable housing in Harlem, Brooklyn and the Bronx, through the New York Equity Fund. Managing Director and Head of Goldman’s Urban Investment Group Alicia Glen stated, “We remain committed to working with local leaders and public agencies to help meet the needs of these communities.”
The sum will provide 568 residences to New Yorkers who earn less than 60% of the city’s median income. It is the biggest investment the New York Equity Fund has ever received. The Fund is a joint venture among the non-profits Enterprise Community Investment and the Local Initiatives Support Corporation, and Major Bloomberg’s Department of Housing Preservation and Development.
In its history, the fund has developed 24,000 affordable housing apartments in abandoned and under-utilized areas. Abby Jo Sigal, Vice President and New York director of Enterprise said, “It is important that Goldman Sachs stepped up to the plate and invested in the fund at a time when it is hard to raise capital.”
Golman Sachs’ stock has risen 97% this year. The firm (which received $10 billion dollars of bailout money last October and has since repaid it) committed $17 billion to employee bonuses in the first three quarters of 2009. Over the past few months, COO Gary Cohn and CFO David Viniar have been meeting with shareholders to address concerns over these practices. The company just released a memo entitled “Goldman Sachs Compensation Practices”. For the second year in a row, the Goldman has cancelled its annual Christmas party.