Goldman Sachs' announcement this week that it will spend $500 million to support small businesses is a massive CSR campaign, one that comes as the financial firm wades through a negative media storm. Revealed just nine days after Goldman CEO Lloyd Blankfein called the firm's business “God's work” in an interview with The Times, the “10,000 Small Businesses” campaign is one step toward improving a dented public sentiment.
Though the investment bank is still receiving criticism from politicians and the media for the tens of billions of dollars it has set aside for employee bonuses this year, the CSR effort might already be improving that outlook.
Data gathered by the Dow Jones Media Lab shows that during a 24-day period, beginning October 27, 84% of all media mentions for Goldman were negative in tone. However, when the new CSR campaign was announced November 17, Dow Jones reports a 4% increase in positive media for the bank.
“The data indicates that on a percentage basis, positive coverage of Goldman has increased by four percentage points, moving the needle from 14% to 18% positive coverage,” says Martin Murtland, MD of Dow Jones Solutions for communications professionals. “This is a significant achievement; however this example is also evidence that an organization's reputation cannot be rebuilt over night. Goldman should also engage with critics who are skeptical of the initiative.”
David Langness, SVP and co-GM of MWW's Los Angeles office, agrees that this campaign and others like it can be a step in the right direction, especially for big financial services companies that have taken a beating in consumer opinion.
“We understand that [Goldman Sachs] has been through a very tough year with negative press. The bottom line is, they had to do something,” Langness says. “In this environment where there's such declining trust in major corporations, CSR campaigns have risen to the top of the list as far as importance level. It used to be CSR campaigns were unusual, now they're common practice. They're a part of the PR toolbox.”
That toolbox has been put to good use recently, as large financial firms look to put a positive face to their name. Tuesday JP Morgan Chase announced two initiatives: A $1 million donation to restore the Central Park Conservatory and a partnership with Facebook to distribute $5 million across the firm's network of nonprofit organizations. And last week Citigroup pledged to donate 400,000 pounds of food to feed underprivileged New Yorkers on Thanksgiving.
“I don't think firms can wave a magic wand and expect that all their problems will go away. But there's no question that these programs are going to be a positive,” says Ken Makovsky, CEO of Makovsky & Co. “Goldman is certainly going to improve their position in the business community, particularly in how they end up helping these companies.”
And while Langness notes that an ideal situation would see CSR campaigns roll out before a crisis hits, he says he believes corporations can restore public confidence by demonstrating real change and clear communication.
“For Goldman Sachs and other firms to regain public trust they have to do any number of things that companies do in this situation,” he said. “Change leadership, be completely transparent, be brutally honest, and become known for sticking to that. It takes time but it pays dividends.”