Where Have All the Dollars Gone?

In the past few weeks, public opinion against Wall Street and anyone who has ever worked in the financial services industry has clearly reached an all-time low. Congress is seeking to enact retroactive taxes that could impact thousands of people, and AIG employees are receiving regular death threats.

This wave of anger and desire for punishment is overlooking the critical philanthropic role that many financial services professionals play in our society. Yes, many Wall Street bankers, traders, and their colleagues at hedge funds and private equity firms may earn salaries well above the national average. But they also contribute a huge percentage of that wealth to charity. Some firms actually mandate percentages of income that senior executives are required to donate.

New York City is home to thousands of organizations that provide food, shelter, clothing, education, job training, access to the arts, counseling, medical services--the list goes on and on. These programs help not just New Yorkers, but people in need around the country and around the globe. Moreover, these organizations also employ approximately 14% of NYC’s workforce (source: New York City Economic Development Corporation).

The impact the loss of these donor dollars will have on the not-for-profit community is already being felt and will only worsen over time. Daily, I learn of organizations--many of which have been around for decades--that are cutting programs and laying off staff. In the next few years, literally hundreds of millions of philanthropic dollars will disappear, perhaps never to be seen again.

This tragedy must be recognized and addressed. The recession will only increase the demand for the types of services these organizations provide. Philanthropically-minded individuals who now face salary caps, higher taxes and restrictions on charitable deductions are going to be less incentivized--and less able--to help the organizations that have relied on them in the past.

Of course, I am not an unbiased source. I live in New York and--as even our Mayor has admitted--this city’s economy is dependent on the financial services industry. I also run a not-for-profit organization that was founded by a handful of young Wall Street professionals who used their first bonuses to help others. Yet I see every day the importance of Wall Street, not only to our city, but also to our country and our world—and this is a message that seems to be getting lost in the press. We can’t blame this mess on an entire profession. We need to move forward. America has always been a very charitable society--let’s not change that.