Posted on 14th January 2010
Investment bank Goldman Sachs is thought to be considering a programme to compel its top earners to give a certain percentage of their earnings to charity, according to a recent report in The New York Times.
The article suggests that the scheme might be intended to soften criticism over the size of its year-end bonuses, which are among the highest in Wall Street, bringing average pay to about $595,000 for each employee — with far higher amounts for top performers.
The scheme would be similar to one that ran for decades at the collapsed investment bank Bear Stearns, which required more than 1,000 of its top executive to donate 4% of their pay each year to good causes. On the same basis, this would mean Goldman’s top employees giving hundreds of millions of dollars to charity each year.
Goldman Sachs has 5,500 staff in London, and it is thought that if it adopts such a scheme, rival banks such as JPMorgan Chase and Morgan Stanley would be pressured to follow suit.
The move raises the debate as to whether giving should be entirely voluntary or in some way coerced for the greater good.
The Institute of Fundraising is clear on its view. “It is great to encourage people to give more, but people should be able to choose when to give, where to give and how much to give,” says Louise Richards, director of policy and campaigns. “Making it mandatory in this way could reduce goodwill, could lead to a reduction in donations (ie if people are forced to give x amount, maybe they would normally give more, but won’t any more), plus it could cut off other options people may choose to do such as sponsored events.”
The same debate has been going on in the volunteering sector for some time, with the Labour Party pledged to introduce compulsory community service for young people in its election manifesto.
Volunteering England believes coercion is not the way forward. Mike Locke, director of public affairs, says, “Although the Goldman Sachs scheme will ultimately benefit the third sector, volunteering and donating are best when the individual chooses to do it of their own free will. We would like to see City bankers give their time as well as their money. Volunteering would broaden their outlook and expose them to everyday life they are unfamiliar with. There are a great many inner-city volunteering projects in the capital that would greatly benefit from the skills and knowledge the bankers could offer. And these privileged individuals would themselves benefit from developing closer relations with communities at street level.”
