Dear Reader,
Happy New Year–and welcome to the first edition of The Forum File. With this newsletter, we’ll share the latest updates that are top of mind from our team and our members. Each issue we’ll highlight a different member and program that’s working to revive the economy and shore up the small businesses that drive it. And we’ll tell you how our team is working to advocate for our members’ contributions in Washington.
We’d love to hear your feedback. Happy reading!
Kevin Fromer, President and CEO, Financial Services Forum
Penny For Your Thoughts
“We may all be facing the same storm, but we’re not all in the same boat.” Goldman Sachs’ Global Head of Corporate Engagement Asahi Pompey talks to us about the road to recovery and supporting small businesses equitably.
Tell us about your research into racial disparities in the small business sector. How is Goldman Sachs working to address them?
Entrepreneurs of color face outsized challenges, especially when it comes to access to capital. Our data shows that Black business owners’ rejection rate for bank funding is three times higher than white business owners, even in “normal times.” During the pandemic, we found that Black business owners are less likely to secure emergency funding, experience bigger dips in headcount and have less cash reserves. We may all be facing the same storm, but we’re not all in the same boat.
Over the past decade, we have been supporting small business in two major ways: business education and access to capital. In 2020, we committed over $1 billion in support for small businesses through these two core pillars, with a particular focus on entrepreneurs of color.
You’ve said you’re “bullish on small businesses” despite the pandemic. Tell us why. How has Goldman Sachs helped rehabilitate small business during these difficult times?
My day job is to stay close to small businesses. There’s a common theme in their stories: resilience and innovation. I’m bullish because their entrepreneurial grit is core to their character, not circumstantial; many have managed to adapt and find new business opportunities even during the pandemic.
But to enable the road to recovery, support from policymakers is essential. In 2020 Goldman Sachs launched an advocacy program that empowers small businesses to lobby policymakers on key issues. This advocacy program (10,000 Small Business Voices) has served as a powerful megaphone, amplifying the small businesses voice during these challenging times. As a second round of emergency relief arrives, I am hopeful that small businesses can stay the course and come back stronger.
What are the top priorities of the Goldman Sachs Office of Corporate Engagement in 2021?
I am keenly focused on three priorities for 2021: (1) Doubling-down on our commitment to entrepreneurs – in the US, Europe, and globally; (2) Bringing racial equity into the forefront of everything we do—whether that’s through our Fund for Racial Equity or our commitment to HBCUs, to name a few of our priorities; and (3) Continuing to show up powerfully for our communities through service, which is core to Goldman’s legacy as a firm. Our people engaging in service was a huge part of our 2020 impact and we will build upon that foundation in 2021.
Value Add
Member program spotlight.
Goldman Sachs Makes Small Big
2020 was a challenging year for small businesses, and the holiday season in particular, was a make-or-break for many.
Building on its longstanding commitment to small businesses, Goldman Sachs launched its first-ever #MakeSmallBig Holiday Market, curating products from global alumni of its 10,000 Small Businesses and 10,000 Women signature philanthropic programs. From a soap maker in Virginia to a baker in Michigan, the online market spotlights small businesses across the country—and the world—for shoppers seeking unique gifts that support local businesses.
Through 10,000 Small Businesses, Goldman Sachs offers education, capital and business support services to small business owners looking to grow. This powerful community of entrepreneurs now represents $14 billion in revenue and employs more than 200,000 people.
10,000 Women has reached over 100,000 women entrepreneurs in over 100 countries while providing them with mentoring, networking and business education opportunities.
Learn more about 10,000 Small Businesses here and 10,000 Women here.
Capitol Gains
What we’re doing in Washington.
Our advocacy efforts have been focused on communicating to Washington stakeholders about the continued strength and resiliency of the nation’s largest banks, highlighting that they still remain subject to the most stringent regulation.
We have repeatedly cited that Forum member institutions have:
· Increased capital requirements in recent years;
· Faced new and stronger liquidity requirements; and
· Maintained sufficient capital in the face of multiple stress tests.
We’ve also emphasized the critical help Forum members have provided to Main Street businesses and consumers throughout the COVID-19 crisis:
· $4.1 trillion+ in overall lending.
· $272 billion in loans made to businesses of all sizes during 2020 Q1.
· $69 billion in loans provided to nearly 850,000 small businesses through the Paycheck Protection Program.
· The $2.2 trillion in corporate bonds and $339 billion in equity raised for U.S. companies.
Moving into 2021 and a new administration, we will continue to impress these facts upon key policymakers.
Our Two Cents
Research from the Forum.
The BankNotes blog spotlighted:
· Large Banks Support Small Business Across a Range of Industries Through the PPP.
· Supporting Small Businesses Through PPP Lending.
· The Federal Reserve’s recognition of banks’ important role in responding to COVID-19.
· The Federal Reserve Bank of New York’s examination of the link between bank capital requirements and lending decisions.
· Evidence arguing liquidity levels at large banks are robust.
· The rigorous regulation of U.S. banks.
· Federal Reserve Bank of New York (FRBNY) research showing the overall risk in the banking sector is low.
Loose Change
Members in the news.
Forbes and CNBC highlighted Bank of America’s $1 billion equity commitment. Bloomberg reported on its extension of pandemic benefits for caregivers through March.
BNY Mellon committed $20 million to fund educational and workforce development programming. The firm was recognized by CDP and DJSI for its extraordinary sustainability efforts. And, Global Head of HR Jolen Anderson discussed the importance of mental wellbeing during the pandemic with Ariana Huffington.
Bloomberg highlighted Citi’s pledge to provide as much as $50 million in capital to minority depository institutions (MDIs) throughout the country to assist with affordable multifamily rental housing.
Forbes reported on Goldman Sachs’ additional $250 million investment in small businesses. Utah Governor Gary Herbert recognized GS’ Simba Maponga for his work with the Utah Martin Luther King, Jr. Human Rights Commission.
CNBC highlighted a set of policy recommendations from JPMorgan Chase on how the incoming Biden Administration can mitigate further economic damage and help reduce inequality as the nation works to recover from the global pandemic. The recommendations were based on data backed from hundreds of thousands of Chase customers.
CNN Business highlighted a new program by Morgan Stanley that will provide full scholarships for 60 students at historically Black colleges and universities (HBCUs). The firm plans to spend $12 million on the program over four years.
Newsweek recognized State Street as one of America’s Most Responsible Companies. State Street is partnering with Small Business Strong to support Massachusetts women and minority-owned business owners.
Wells Fargo donated to 200 local food banks in 32 states including Amarillo and San Antonio, TX and Charlotte, NC, part of the bank’s effort to provide 82 million meals to families in need. Wells Fargo, also signed onto the Project REACh Minority Depository Institution (MDI) Pledge, along with Citi.