UPDATE: June 16, 2020: Goldman Sachs pledged an extra $250 million to fund Paycheck Protection Program loans through community development financial institutions and other mission-driven lenders, the bank announced Monday. That boosts Goldman’s total commitments in the program to $775 million. The bank is also partnering with the National Urban League and the U.S. Hispanic Chamber of Commerce to provide capital to minority-owned businesses, it said.
The 1976 film "All the President’s Men" told aspiring journalists to follow the money. But in looking at last week's surge of coronavirus-inspired philanthropy in the banking and payments space, one could argue the money is following the outbreak: Wherever the virus is hitting hardest, companies are throwing money at potential solutions.
The focus shifted last week to the U.S., in part because it overtook Italy as the country with the highest number of coronavirus deaths.
But as the U.S. faced its toughest week yet, some executives made it their most generous.
Square CEO and Twitter co-founder Jack Dorsey vowed Tuesday to set aside $1 billion to fund charitable causes beginning with coronavirus relief efforts. Beyond that, the money will go toward supporting girls' health and education and universal basic income, Dorsey said in a set of tweets.
Dorsey said he would move about 19.8 million shares of Square — worth approximately 28% of his wealth — to a limited liability company called Start Small, which would disburse the money.
Dorsey said he was donating shares from Square because his holding is larger there than it is with Twitter. Incidentally, Square’s stock has fallen by about 40% since the end of February, according to The Wall Street Journal. Square blamed the coronavirus' impact for a 25% drop in volume from the payment firm’s small-business customers over a 10-day span in mid-March, compared with a year earlier, the Journal reported.
Dorsey is making all donations to the fund publicly transparent, linking a spreadsheet to his tweet announcing the gift. It may take several quarters or even years to complete the transfer, a Square spokesperson told Bloomberg.
"I hope this inspires others to do something similar," Dorsey said Tuesday in a tweet. "Life is too short, so let's do everything we can today to help people now."
Dorsey isn't the only billionaire to give toward coronavirus relief. But his commitment far outweighs others' thus far. Amazon CEO Jeff Bezos is donating $100 million to Feeding America. Michael and Susan Dell have committed another $100 million, mostly for global relief efforts. The Bill & Melinda Gates Foundation pledged a similar amount to develop a vaccine and pay for detection, isolation and treatment initiatives. Mark Zuckerberg and Priscilla Chan announced a $25 million commitment last month to help research a possible drug for COVID-19, Bloomberg reported.
"Why now?" Dorsey tweeted Tuesday. "The needs are increasingly urgent, and I want to see the impact in my lifetime."
Among U.S. banks, Goldman Sachs also boosted its philanthropic profile last week, doubling — to $500 million — the amount in emergency small-business loans it intends to provide. That's in addition to a $25 million COVID-19 relief fund and a further $25 million in grants "to community development financial institutions and other mission-driven lenders to ensure they have the necessary capacity to underwrite and deliver loans to small businesses as soon as possible," CEO David Solomon said Tuesday in a White House videoconference.
The U.S. wasn’t the only new focus in the fight against the pandemic. Britain also was thrust into the spotlight when Prime Minister Boris Johnson became arguably the world’s most powerful coronavirus patient when he was hospitalized April 5. Johnson spent four days in intensive care and was released Sunday.
During that time, several U.K. lenders took a page out of the Santander playbook.
Barclays Chairman Nigel Higgins, CEO Jes Staley, and finance director Tushar Morzaria pledged to donate one-third of their fixed pay for the next six months to help people affected by the pandemic. Staley, for reference, took home £2.35 million in fixed pay last year, according to Bloomberg. The donations are part of a £100 million community aid package Barclays announced Tuesday to help "a variety of charities working to support vulnerable people impacted by COVID-19."
HSBC said its chairman, Mark Tucker, would donate his full fee for 2020 — about £1.5 million — to charities supporting "healthcare workers and vulnerable people" in the U.K. and Hong Kong, newly minted CEO Noel Quinn announced in an internal memo seen by the Financial Times. Additionally, Quinn and CFO Ewen Stevenson will donate one-quarter of their salary this year — about £160,000 and £93,000, respectively — and will waive their cash bonuses this year, worth roughly £1.4 million and £706,000. Quinn asked employees to contact him if “there is more you think we can do,” the memo read.
Standard Chartered CEO Bill Winters will give away half of his salary through the end of the year — about £825,000, a person briefed on the arrangements told the Financial Times. The bank made headlines late last month for pledging $1 billion in financing toward pharmaceutical manufacturers and distributors, health care providers and non-medical companies that have volunteered to make ventilators, face masks, sanitizers and protective equipment to fight the pandemic. Winters and CFO Andy Halford are also forgoing their cash bonuses this year.
Lloyds said its CEO, António Horta-Osório, and other executives would not receive a bonus this year to show "solidarity with the communities in which [the bank] operates." Horta-Osório, however, did not commit to donating part of his salary to charity.
The spirit of generosity wasn’t universal, however. The Financial Times reported that the Royal Bank of Scotland has cut 130 employees from its investment bank amid the outbreak, with many workers given notice of their redundancy via video call. CEO Alison Rose was widely expected to announce the job cuts in February when the bank initiated a rebranding effort. Sources told Bloomberg in March that Rose was pressing on with the expected cuts.