A Community College Scores a Rare Gift from Goldman Sachs. What's the Moral of the Story?

Back in November, the New York Times ran a piece entitled "How Can Community Colleges Get a Piece of the Billions That Donors Give to Higher Education?" The article recited some depressing, familiar facts about the financial struggles of community colleges, and focused in on LaGuardia Community College in New York City as an example. 

"The chief impediments to fundraising at community colleges are the most obvious ones," the Times reported, looking at the challenges of LaGuardia's four-person development office. "There is no base of well-off alumni from which to draw, and no accompanying reserve of pride that might be exploited."

While elite universities enjoy a virtuous cycle as successful alums bankroll ever more lavish and prestigious campuses that attract yet more top students who go on to become rich donors, community colleges have found themselves on life support as the government funding that largely sustains them has been cut in recent years. The article also noted that community colleges have not excited foundations and wealthy education donors the way that charters schools or other K-12 efforts have. 

We're betting that one of the readers of that Times article was Lloyd C. Blankfein, the chief of Goldman Sachs, because last week the investment bank gave LaGuardia Community College a $2 million gift, without restrictions, and also pledged to raise another $1 million. 

We’re not sure how many of Goldman’s more than 32,000 employees are alums of the two-year school in Queens, but more probably attended places like Harvard University, which is Blankfein's alma mater. Harvard, of course, is a perfect example of the self-perpetuating cycle of alumni giving. Its endowment is now worth $36.4 billion, given by alumni like Hansjörg Wyss who donated $125 million and Kenneth C. Griffin who gave $150 million.  

Meanwhile, many of LaGuardia’s 50,000 students are immigrants from families that earn less than $25,000 a year, putting them below the poverty line for a family of four. Community colleges educate nearly half the country’s undergraduates but only 15 percent earn a college degree in six years, according to a recent study by the National Student Clearinghouse. Many simply can’t afford to dedicate sufficient time to their studies. That’s one reason why President Obama proposed that community college be “as free and universal in America as high school.” The Goldman gift will be used to help students in dire financial straits who don’t have enough money for basics like books and public transit.

Lloyd Blankfein is a rich finance guy with a personal understanding of how a place like LaGuardia can make a difference in the lives of struggling young New Yorkers. True, Blankfein went to Harvard; but he grew up in a housing project in Brooklyn, the son of a postal worker father and a receptionist mother. He went to public schools and did well enough to get into Harvard. But presumably, plenty of the kids he grew up with went off to places like LaGuardia. 

Goldman's gift to LaGuardia didn't happen out of the blue, as much as we like the image of Blankfein being galvanized to action by the Times piece. The investment bank has been involved with LaGuardia for five years through the company’s 10,000 Small Businesses Initiative, which helps entrepreneurs create jobs by offering business management education. And Blankfein's personal connection to the school was cemented in 2013, when he delivered LaGuardia’s commencement address, in which he discussed his rise from poverty in the projects, graduating from Harvard on a scholarship, graduating from Harvard Law School, then running one of the world’s biggest investment banks.

“What a democratizing influence these community colleges have in the country and in our society,” Blankfein told the New York Times. “And yet students struggle to finish not because they are dumb or not committed but because they are working more than a full-time job, and it takes them two and a half hours to get to it by subway.” He added that community college “is a real accelerator to the middle class, and I can’t think of anything the country needs more than that.”

Those are great sentiments, indeed. Now for the unpleasant question: Why was Goldman's gift to LaGuardia so small? This is a fabulously wealthy bank that, in a recent year, distributed $12 billion in bonus money to its employees. It could have gone much bigger with the LaGuardia gift and sent a louder message about leveling the playing field. Instead, the gift inadvertently reminds us of just how tilted the field is. A $2 million give to Harvard or Stanford would barely register, and we write here all the time about eight- and nine-figure donations to such institutions. For LaGuardia, though, a mere two million bucks makes the New York Times

Still, the LaGuardia gift does make a statement. And we'll be interested to see whether other funders start to take a closer look at community colleges as a result of Goldman's example.