The Goldman Sachs Foundation’s torrid 2008

By Felix Salmon
November 12, 2009
here it is, all 297 pages of it.

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Goldman Sachs has provided Reuters with a copy of the Goldman Sachs Foundation’s 2008 tax return. Why the NYT didn’t just put it online I have no idea, but in any case here it is, all 297 pages of it.

The bottom line is that the Goldman Sachs Foundation did very badly in 2008. Here’s the way it’s all summed up:

part3.tiff

The fund started the year with $269 million in assets, and ended with $161 million. The amount it made in charitable disbursements was $22 million (that’s the last number on line 25 of the first page), which means that the charitable disbursements aside, the fund managed to drop by $85 million. That’s 32% of the amount it started the year with, and almost four times the amount of money it actually gave to charity.

The big losses are a capital loss of $15 million on the sale of assets, and a whopping $75 million unrealized loss on investments. And then, just for good measure, we find out on page 68 of the PDF that the foundation paid Goldman Sachs Asset Management $3,864,540 for “investment management”. Gee, thanks for the service, guys.

If the Goldman Sachs Foundation put all its money in cash, earning 0%, and wrote checks over the course of the year totalling $100 million, it would have done better than this. Instead, it managed to give away less than a quarter of that, to recipients like the Foundation for Teaching Economics ($333,333) and $2,550,000 to the Institute of International Education “to support the expansion and enhancement of the Goldman Sachs Global Leaders Program in building a strong platform for the Program’s 10th anniversary activities in 2010.”

The Goldman Sachs Foundation also spent $230,000 on various Davos-related donations, in the form of gifts to the Schwab Foundation for Social Entrepreneurship and the World Economic Forum itself.

Maybe that’s what Lloyd Blankfein had in mind when he talked about doing God’s work.

8 comments

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does this means that Goldman is using a tax-exempt vehicle as a tool for lobbying and/or pleasing their clients, by investing in their charities and generating asset management fees at their own company?

Posted by trying to make sense of it | Report as abusive

Strange. I thought Goldman Sachs IS God. Well, Master of the Universe. But let’s not argue over semantics.I will start worshiping Goldman Sachs when they can turn US Federal Reserve Notes into Gold. They call themselves ‘Gold’man right?

Posted by The Real Deal | Report as abusive

Goldman Sachs never ceases to amaze me. Regarding this story: if behavior isn’t illegal, it should be. It’s a tremendous conflict of interest to have a bank manage its own charitable foundation and use it as a ‘counterparty’ (i.e., sucker) during times of economic distress. That relationship should be banned forever. Also, if Goldman had their MD running a trading desk as well as this charitable foundation at the same time, she should be prosecuted for violating her fiduciary duty to the foundation. Perhaps a public trial and tough sentence would discourage these shenanigans in the future….

Posted by Peter | Report as abusive

It’s the journalists who never cease to amaze me. Goldman is under no obligation to have a charitable fund. It’s their f-ing money, and if they decide to establish a charitable fund, great. They didn’t have to. The fact that Felix is criticizing what Goldman’s charitable fund decided to do with its own money is ridiculous. Who the hell is he to say that the Foundation for Teaching Economics isn’t a worth cause?Seriously, Reuters needs to hire a blogger who isn’t just interested in being part of the cool crowd in the blogosphere. It’s getting embarrassing when people on the Street regularly forward around emails making fun of Salmon’s posts.

Posted by Mark | Report as abusive

re: investments: big loss, but better than the S&P 500 (and as foundations begin to release their financials and 990s-PF, this kind of decrease will almost certainly be commonplace).@ Peter: that kind of relationship is specifically permitted by the tax code and is OK provided the fees are reasonable.

Posted by jpe | Report as abusive

Mark, if people on the Street regularly forward around emails making fun of my posts, that’s surely a sign that I’ve made it, no? And if you get one, do forward it to me!

Posted by Felix Salmon | Report as abusive

Once the money’s in the foundation, it’s not “theirs” any more. It’s public money, for which the foundation receives a tax-exemption.

Posted by Matt | Report as abusive

I have a solution to the national deficit. There are about 75000 entities, foundations, tax free in our nation. It is time for a flat tax of 10% on assets in 2010 and a tax on any income for 2 years of 15% no matter what or who the foundation is. We would solve the massive ddeficit problem if the hidden wealth of our country was tapped instead of the guy making 30000 dollars a year. What do you all think?