Goldman Sachs, Buffett to help fund small businesses

The move comes as the company has been criticized for setting aside billions for employee paychecks despite the continuing weak economy.

Goldman's philanthropic effort, called “10,000 Small Businesses,” includes a US$200 million contribution to community colleges, universities and other institutions to give grants to small business owners to further their education.

The New York-based bank also will invest US$300 million through a combination of lending and charitable support. Goldman said the money will be funneled through community development financial institutions to boost lending and technical assistance available to small businesses in underserved communities.

In addition, Goldman Sachs executives, in partnership with national and local business organizations, will aid small businesses with advice, technical assistance and professional networking opportunities.

An advisory council co-chaired by Goldman Sachs CEO Lloyd Blankfein will oversee the program. Buffett, Goldman's largest shareholder, Warren Buffett, and Harvard Business School Professor Michael Porter will serve as co-chairs as well.

“Our recovery is dependent on hard working small business owners across America who will create the jobs that America needs,” Buffett said in a statement. “I'm proud to be a part of this innovative program which provides greater access to know-how and capital -- two ingredients critical to success.”

The initiative comes as Goldman has started to see a rebound across many of its businesses even as the broader economy and consumers continue to struggle with rising unemployment and mounting loan losses. The bank, which has outperformed other financial companies for years, has been the strongest in its industry throughout the financial crisis. It had less exposure to toxic mortgage-backed securities than other companies and also has been more aggressive in its trading.

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