Goldman Sachs slashes charitable giving

Goldman Sachs Group Inc. cut its charitable contributions to its donor-advised fund by more than three-quarters to $78 million last year, amid a drop in profits.

The smaller donation to Goldman Sachs Gives represents the second reduction in three years. The fund is solely supported by the bank and its partners. In 2010, $320 million was allocated for the charitable fund, down from $500 million in 2009.

A spokesman for the bank said there was no formula for how much was put into the charitable fund each year, and he added that it was reasonable to assume the amount would go up during years with better performance. He declined to comment further.

On Wednesday, Goldman announced that it reduced its compensation and benefits expenses by 21% to $12.2 billion in 2011 as revenue slid by 26%.

The impact of the cuts to Goldman's charitable fund may not be felt by nonprofits for some time, since money is pooled over many years. In 2010, more than $200 million was disbursed to a number of nonprofits, the spokesman said.

The charitable cuts were first reported in the Daily Mail in London.

A favorite cause of the fund is the Harlem Children's Zone, which received $20 million in 2010 to help construct a new building for the Promise Academy Charter School in New York. The gift is the largest investment ever from Goldman Sachs Gives. Executives at the nonprofit did not return calls for comment.

When times were brighter for the bank, philanthropic giving by Goldman Sachs through its foundation and its partners jumped 353% in 2010, to a whopping $315 million. That mostly came from the donations made by the donor-advised fund and the Goldman Sachs foundation. In 2008 and 2009, the investment bank put $600 million into the foundation for its two major programs—10,000 Women and 10,000 Small Businesses—to help entrepreneurs in developing economies and in the United States and Britain.