Robin Hood Says ‘Hell Yeah’ to Recovery Led by Goldman Bonuses

Nov. 13 (Bloomberg) -- David Saltzman, executive director of the Robin Hood Foundation, may be one of the few people who refuses to demonize a Wall Street recovering from record losses with earnings that may include record bonuses.

“Let me be emphatic about that one: ‘Hell yeah,’” Saltzman said during an interview at Bloomberg News headquarters. “It’s clear that New York City is better off in all sorts of ways if there’s a healthy financial community.”

Robin Hood gets more than half of the $150 million in donations it raises each year from investment banks, brokerage firms and hedge funds. The return of record Wall Street compensation will help the charity continue to fund the more than 200 poverty-fighting programs it supports.

Goldman Sachs Group Inc., the most profitable securities firm, Morgan Stanley, the second-biggest U.S. securities firm, and JPMorgan Chase & Co., the second-biggest U.S. bank, will hand out $29.7 billion in bonuses, up 60 percent from the previous high in 2007.

The U.S. economy expanded last quarter for the first time in a year, growing at a 3.5 percent pace. The Standard & Poor’s 500 Index, a benchmark for the largest U.S. stocks, fell 38 percent last year, the biggest drop since 1937. The index has gained 21 percent this year.

“Our hope is that people think carefully about how to spend their bonuses in this time of great need, and that people will remember to help their neighbors,” Saltzman, 47, said.

Robin Hood saw individual donations drop 3 percent last year, as charitable giving in general declined after the bankruptcy of Lehman Brothers Holdings Inc. in September 2008, according to Mark S. Bezos, senior vice president for development and communications. The foundation raised a record $72.7 million in one night at its 2009 spring gala, yet many contributors hold back their donations until late in the year.

‘How It Will End’

“Our fundraising for 2009 looks okay, but we can’t predict how it will end up this year,” Saltzman said. “It could be that people are wildly generous or it could be that people say I haven’t hit my high watermark. I really hope people respond.”

Saltzman said Goldman Sachs is the biggest contributor among financial firms to Robin Hood. He didn’t say how much the firm or its employees give annually. Goldman Chairman and Chief Executive Officer Lloyd Blankfein has been a board member and has given grants ranging from $5,000 to $500,000 through his family foundation during the past five years, according to the charity’s tax filing.

“Lloyd is a guy who gets it,” Saltzman said. “Goldman as institution and Goldman as the sum of its individuals have been remarkably generous, and it’s from the top down.”

Crash of 1987

Robin Hood was dreamed up 21 years ago by hedge-fund manager Paul Tudor Jones II, chairman and chief executive officer of Tudor Investment Corp. After the stock-market crash of 1987, Jones thought that the U.S. would experience the worst economic decline since the Great Depression, and the poor would need help. He gathered a few young finance executives at his Manhattan bachelor pad to launch the foundation, Saltzman said.

One was Glenn Dubin, who later started Highbridge Capital Management LLC in 1992. Dubin tapped Saltzman to become executive director in 1989.

Saltzman, a native New Yorker, had a master’s degree in public policy from the city’s Columbia University and several years’ experience working for New York’s Human Resources Administration, Department of Health and Board of Education.

Since its founding, Robin Hood has raised more than $1 billion. The nonprofit operates without an endowment. Its board of directors covers administrative and fundraising costs so that all donations are funneled in full to the needy. The directors range from Tom Brokaw of NBC News and actress Gwyneth Paltrow to Steven A. Cohen, chairman and CEO of S.A.C. Capital Advisors LLC and Marian Wright Edelman of the Children’s Defense Fund.

Teen Pregnancy

The foundation is the top nongovernment source of funding for charter schools in New York City. Other programs it supports include: Single Stop USA, which helps poor households secure government benefits; Teacher U, a graduate-level teacher training program; and the Carrera model, which seeks to prevent teen pregnancy.

Michael Weinstein, 61, an economist who studied at the Massachusetts Institute of Technology in Cambridge, Massachusetts and serves as the foundation’s chief program officer, monitors Robin Hood’s aid targets to ensure that the poverty programs it funds get concrete results.

“Robin Hood is a pretty rigorous foundation because they go through a pretty extensive process to determine the impact of the dollars they spend,” said Colvin Grannum, president of Bedford Stuyvesant Restoration Corp. in Brooklyn, which aids the working poor with the charity’s grants. “You have to be committed to working toward specific goals, you have to be responsive to them, and we have to demonstrate what we’ve done.”

Soup Kitchen

Saltzman said he lures donations from Wall Street by taking executives to see a charter school under construction or to a soup kitchen Robin Hood funds. To get younger hedge-fund and Wall Street executives to contribute to Robin Hood, the organization held a fundraiser last night at M2 Ultra Lounge nightclub in Manhattan. Called “Food for Good,” it’s a venture with online grocer FreshDirect based in Long Island City, New York. Each $50 ticket will fund a turkey dinner for a family of eight during the Thanksgiving holiday.

“We want to attract people of all ages to Robin Hood, and what’s great about this was that it was generated by a bunch of people outside of Robin Hood,” Saltzman said.

Saltzman said the organization has begun planning next year’s spring gala. He declined to predict whether it will exceed last year’s ticket sales with big bonuses coming back to Wall Street firms.

“I’m always scared to death before we have an event,” Saltzman said about its spring gala that year that raised about $72 million. “I was scared to death in 2007, I will be scared to death in 2010 and be scared to death for any event we’re a part of.”