All Eyes on Foundation as Goldman Sachs Piles Up Profits

Recent tax filings for the Goldman Sachs Foundation reveal that the foundation invested aggressively in the markets in 2008 while committing large amounts of money to non-traditional investment vehicles, the New York Times reports.

The filings by the foundation show thousands of trades in contracts based on instruments as varied as U.S. Treasuries, the Russell 2000 index, and the euro. During the fiscal year that ended November 2008, half the foundation's portfolio was devoted to alternative investments, including hedge funds, private equity, commodities, and real estate, while equities comprised roughly a third.

According to Felix Salmon, a financial blogger for Reuters, the value of the foundation's assets fell by more than $85 million during 2008, including $75 million in unrealized investment losses. The total represents 32 percent of the foundation's $269 million endowment entering 2008 and is almost four times the amount the foundation awarded in grants during the year. A Goldman spokesman told the Times that the foundation, which is overseen by Stephanie Bell-Rose, a managing director at the firm, has employed investing and risk management strategies to protect net asset value over time.

Amid public furor over the firm's anticipated 2009 profits and super-sized bonuses, Goldman recently announced that it would add an additional $200 million to the foundation's endowment and ramp up its charitable giving. With over $404 million in assets, the foundation ranks among the ten largest corporate foundations in the United States.

According to Goldman spokesperson Joseph Snodgrass, the firm has given roughly a billion dollars to charity since 1999, including $500 million to its main foundation and $319 million directly to nonprofits and educational institutions. In 2008, the firm pledged $100 million over five years to an initiative known as 10,000 Women, which works to provide business education to women in developing countries.

Geraldine Fabrikant. "In Charity Tax Filing, a Glimpse of Goldman." New York Times 11/11/2009. Felix Salmon. "The Goldman Sachs Foundation's Torrid 2008." Reuters 11/12/2009.