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Goldman Sachs Said to Be Considering Required Giving Program

As investment bank Goldman Sachs gets ready to pay out big bonuses to its employees, the firm is considering a program that would require executives and top managers to donate a percentage of their earnings to charity, the New York Times reports.

Although details of the program haven't been finalized, sources who spoke to the Times say it could be similar to a decades-long program in place at failed investment bank Bear Stearns; in that program, more than a thousand of the bank's top earners were required to donate 4 percent of their pay to charity each year. Assuming a similar percentage and level of participation, Goldman's top employees could be asked to commit hundreds of millions of additional dollars to charity as part of the new effort. According to the Times, the firm has yet to decide whether to create a separate program for the mandated giving or run it through Goldman Sachs Gives, an initiative created in 2007 to oversee donor-directed charity funds for Goldman employees.

If it comes to pass, the move would be the latest in a series of efforts by Goldman to deflect criticism over the size of the bonuses it plans to hand out. In the fall, the firm announced it would give $200 million to its foundation, nearly doubling the size of its endowment, and create a $500 million fund to lend to small businesses, a sector of the economy that has been especially hard hit by the tight credit environment. In response to the public outcry over the financial bonanza it reaped in 2009, Goldman also decided to cut back on planned bonuses by reducing the amount of revenue set aside for compensation.

Still, the moves have done little to quell criticism of the "anything goes" bonus culture on Wall Street, and it's unclear whether Goldman's latest idea, if adopted, will defuse anger on Main Street and in Washington over the enormous pay packages handed out to so many on Wall Street.

Indeed, according to some experts, the best advice for Goldman and other banks is to tell their employees to keep their heads down. "They'll try to make sure," said Capstone Partnership recruiter Maurice Toueg, "[that] their people aren't going out and celebrating their financial wins."

Story, Louise. “Goldman Sachs Weighs Requirement for Charity.” New York Times 1/11/10.