GOLDMAN SACHS: PR RECONSIDERED

There is a belief in some quarters that an expected end-of-year $1-billion Goldman Sachs contribution to charity is no more than a publicity stunt designed to blunt public outrage about the record sum the company has earmarked for compensation this year. I’m inclined to feel that a billion dollars is a billion dollars after all, and it can be mighty helpful in many ways. (For the record, Goldman is also donating $200 million to its own foundation, which promotes education.)

My cry is for more thoughtful, timely and transparent communications. Goldman knew this announcement was coming — why not clarify the purpose of the foundation and talk about who benefits from the firm’s very generous donation? Will this be an ongoing thing, or a one-shot deal? These questions may well have been answered … but I missed them in the major media, both traditional and online that I read. Specific information — delivered loudly and clearly — can have a major impact on public sentiment in the era of Web 2.0 transparency, when everyone is savvy to the techniques of PR and marketing.

Goldman might take a lesson from Andrew Carnegie, the hard-driven and extraordinarily wealthy industrialist who said, “Surplus wealth is a sacred trust which its possessor is bound to administer in his lifetime for the good of the community.” Among other areas, he funded public libraries both here and abroad. Similarly, Goldman has an opportunity to be a community hero. Now many public libraries are in need, and Goldman could provide direct grants to every public library in the U.S. at risk of closing for lack of funding. In fact, a few weeks ago the Philadelphia Public Library came close to closing its doors permanently, only to be saved at virtually the last minute by the Pennsylvania State Senate. Public libraries are where kids — and adults — can find safe haven from the depressing realities of the recession, plus free books, DVDs to borrow, community programs, free internet access, etc. Those are benefits that speak directly to the middle class and reflect sensitivity to the perceived gulf between the haves and have-nots in this country.

In addition to libraries, Carnegie created New York’s Carnegie Hall and underwrote – among other important institutions – Carnegie-Mellon University, the Tuskegee Institute, the National Negro Business League, the Carnegie Hero Fund and the Peace Palace at the Hague . The pension funds he established ultimately became TIAA-CREF. Over the course of his lifetime, he gave away the equivalent of more than $24 billion (in 2008 dollars) to charity.

Of course, Andrew Carnegie did not have shareholders to contend with. As noted in the BUSINESS INSIDER, “Shareholders may object that money that is not going to actually retain talent should be shareholder equity, and not spent on charity.” And Goldman has already faced one suit on this kind of thing. Further, Goldman has to figure out how to undertake its philanthropy in a tax advantaged way. Regardless of the approach that is ultimately taken, Goldman is sitting on a golden opportunity in terms of public relations.


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the National Negro Business League, the Carnegie Hero Fund , TIAA-CREF, public relations, Makovsky,