Maria Hengeveld

2008 was a big year for Goldman Sachs, and one they had been looking forward to for quite some time. It was the moment they were finally able to unveil the secret economic intervention they had spent years developing. Theirs was a groundbreaking enterprise, one that would impact communities around the world. According to Joe Snodgrass, Chief Operating Officer for the Office of Corporate Engagement at Goldman, the "intervention [was] needed to help better distribute the social benefits of economic growth." In 2008, the fruits of their labor and the pent-up anticipation would finally find release. After the launch no one would view the economy in the same way. And everyone would know they owed it to Goldman's captains. The intervention I‘m referring to is Goldman's 10,000 Women Initiative, and the company's “womenomics”1 research in which the intervention is grounded.

Goldman's researchers asserted that "empowering more women in the workforce [can] lead to increases in GDP and reduce inequality" in the developing world. According to the research, empowering women is a revolutionary recipe for economic stability because women have a "higher propensity to use their earnings and increased bargaining power to buy goods and services," which "improves family welfare" and can "create a virtuous cycle" that "supports the development of human capital" and "fuels economic growth."

For a firm whose current board and executive offices are comprised of far more men than women, Goldman’s faith in the leadership capacities of women is impressive. So is the firm's knowledge of what women supposedly need. In order to drive economic growth, they say, women need more access to finance. Goldman’s 2014 report “Giving Credit Where Credit Is Due” describes why “closing the credit gap” between men and women makes such a fine poverty reduction strategy. The report mentions the need to tackle "misconceptions about female credit risks" and eliminate the policy biases and unfair discriminatory norms that stand between women and their credit opportunities. When it comes to the behavior of women themselves, Goldman notes that it is vital that we train away their "reluctance to apply for loans.” During the 2008 launch of 10,000 Women, Goldman's womenomics experts promised to invest no less than $100 million over the course of the next five years to implement their vision and train women from around the world—from Rwanda, Nigeria, and China, to Brazil and Peru—to become successful businesswomen. Their ideal recruit would hail from an underserved community and possess both an "entrepreneurial spirit" as well as a business with at least five employees. To effectively implement its feminist intervention, Goldman paid 90 universities and educational institutions, including Columbia University in New York and the University of Cape Town in South Africa, to administer their business course. To monitor the program's success, non-profit organizations such as Ashoka, Bridgespan and the International Center for Research on Women (ICRW), as well as universities such as Babson and (much later in the process) Harvard, would conduct rigorous impact studies.

In comparison with the $10 billion that the US government spent to bail out Goldman Sachs that same year, the $20 million per year that 10,000 Women would cost the firm may appear marginal. Yet it is important to keep in mind that, as Snodgrass noted, the allotted $100 million sum didn't yet include all the extra expenses that Goldman would incur for flying its employees to project sites around the globe. Costs that could certainly add up, the global program director Noa Meyer explained, because "we don’t just write a check and hand it over to our partners and ask them to just let us know how it goes." Instead, said Meyer, “we’re deeply involved in program delivery for each and every one of our partners.” For the project to maximize its impact and optimize its poverty reduction capacity, the firm wanted to be sure that women were schooled the Goldman way. In 2014, the firm's commitment to poverty reduction and women's empowerment was rewarded with a partnership from the World Bank, with whom they teamed up to increase poor women's access to capital. World Bank President Jim Yong Kim captured the shared vision of the banks well when he argued that "[w]e cannot afford to exclude half of the world’s population from their rightful role in helping to change the face of the global economy.”

Ambiguous Evaluations
Jim Yong Kim had good reasons to pick Goldman as a partner. The first evaluation studies of 10,000 Women affirmed Goldman's hopes. In 2012, ICRW had released their evaluation of Goldman's partnership with the Indian School of Business. According to the NGO, theirs was the first independent evaluation of the global project. "Half of the graduates at least doubled their revenues since participating in the 10,000 Women program," ICRW reported, and "[g]raduates described a strong interest in giving back to their communities. While the evidence shows that 10,000 Women was not the only factor contributing to women’s business success and growth," ICRW explains, their "preliminary findings indicate that it was instrumental in the process."

Babson College published a second evaluation in 2013, analyzing the results of a 50-question survey, completed by no less than 3,000 participants. The evaluation strongly supported Goldman's womenomic hopes and assumptions. Babson not only praised the success of the program. It also used the outcomes to emphasize the broader "importance of educational intervention in providing support for women entrepreneurs in developing economies." Why? Because, according to the report, 18 months after graduating, 69% of participants had increased their revenue, 58% had added new jobs and 90% were paying it forward by mentoring other women, presumably in the Goldman way. While there was no evidence to support the idea that these women wouldn't have grown their businesses without Goldman's training, a strong link was found between the program and women's attitudes, as Babson found a "23% increase in [women's] confidence in making difficult decisions" and a 21% increase "in their confidence in their negotiation skills." Furthermore, more than 20% of graduates reported that they had become leaders in community groups, associations and religious groups after graduation, allegedly all due to Goldman's business lessons. All these findings led Babson to four key conclusions: 1) Women can be exceptional entrepreneurs across a diverse array of country and cultural contexts, 2) 10,000 Women helps entrepreneurs grow their businesses and develop their business acumen, 3) Mentoring, advising and networks are highly valued in the growth process, and 4) Women entrepreneurs grow their businesses despite a lack of external financing.

The fourth conclusion is particularly instructive, and its explanation is worth quoting in depth:

"Women entrepreneurs completing the 10,000 Women program report success in growing their businesses in terms of revenues and employees. However, this growth is financed largely through retained earnings and internal sources. Our analysis shows that growth-oriented women entrepreneurs need external capital but usually do not apply for it. Many women indicated that they didn’t apply due to the challenges of navigating the application process or their perceptions of risk and the likelihood of success. Still others reported that loan terms or collateral requirements were unfavorable. Among those that applied for external funding, however, there was a very high likelihood of approval, demonstrating that female entrepreneurs like the 10,000 Women graduates are creditworthy. While it is true that program participants have achieved growth thus far, this analysis begs the question of whether they could be more successful and grow even more if they had greater access to outside funding.

In other words, women had succeeded without taking loans and reported to find debt risky and inconvenient. Some had applied for loans and gotten them, but Babson found no evidence to support the idea that they were more successful. Rather than concluding that loans may present risks to women, and that women's "reluctance to take loans" may reflect a very real wariness of parasitic lenders, Babson understands the results as an incentive to promote borrowing opportunities more aggressively and to raise concerns about "[w]omen report[ing] low rates of capital access." 

While the evaluations of ICRW and Babson were remarkably positive and strengthened the idea that, as a poverty reduction intervention, women's business skills and lending opportunities are a worthwhile focus point, Mike Laflin, a retired international development expert with 40 years of experience in development, was less impressed. “Increases in revenue and hiring more employees might have happened anyway because of improvements in the economy and the caliber of the participants," he argued, [so] there is no way of knowing” if we can assign causality to any one initiative. He also critiqued the small sample size that ICRW had used for its study. The program “picked winners," he said, "and did it during a time when the economy was booming in the only country that had an evaluation of the program."

Goldman's Noa Meyer defended the program by explaining that evaluations “are lengthy and time consuming processes." He went on to announce that "there will be a number of different evaluations that will explore different facets of the initiative, and probably a number of independent academic research documents as well." According to Rachael Yeager, the director of HERproject, another women's empowerment initiative, the absence of evidence for success should not be a reason to critique Goldman Sachs. "It happens to all of us," Yeager said. “We have that beautiful story and then we collect all the data and make connections between our program and the growth of those economies, but it’s really hard to do.”

What she didn't mention is that, were it not for people such as Laflin, the program would probably have gone down as an uncontested success2, adding validity to the idea that business education for women is a credible poverty reduction strategy. After all, the official evaluations were positive.  One obvious question to raise is: what could explain the difference between Laflin's skepticism and the optimism of Babson and ICRW? The tax forms of the Goldman Sachs Foundation offer us a clue (and much, much more). They reveal that the ICRW received more than $400,000 for the study. Babson, who both implemented and evaluated the program, was rewarded with a few million dollars in 2013 alone (Ashoka apparently did some pro bono). Goldman's Womenomics department, then, seems to have a neutrality problem.

Womenomic Subjectivity and Imperial Philanthropy
Alas, conditioning women and girls into confident, credit-positive entrepreneurs may not solve the world's economic problems after all. While 10,000 Women has undoubtedly helped some women to grow their businesses, or assisted other organizations to help their communities, the absence of substantial evidence around its overall success in better distributing  "the social benefits of economic growth" and the odd methodologies Goldman chooses to measure its outcomes should raise critical questions around the value of the initiative and what kinds of interventions would have been more effective. If a company as rich and powerful as Goldman Sachs, with supporters as credible as ICRW and the World Bank, fails to prove that the initiative actually works—resorting to measuring attitudes and mindsets in order to validate their model of economic development—then who can?

A more useful question to ask is: why would they? The only clear winners are Goldman's partner organizations and the firm itself. By picking an “empowerment theory” that conditions women to view financial services as liberating, 10,000 Women may have very well expanded some markets for the bank. But crucially, as explained by Goldman's Snodgrass at the beginning of the project, 10,000 Women helps the Goldmanites feel good about their business. “We are competing every day for talent," Snodgrass said, "and programs like this are extremely beneficial to our recruiting and retention efforts."

No wonder. If I were a finance professional, I'd rather see my chiefs as a “movement for women's empowerment and economic justice” than a “vampire squid” that, “organized by greed,” has “wrapped itself around the face of humanity.” I'd rather hear that my company was contributing to women's confidence and decision-making power than "breaking families everywhere" and "engineer[ing] every major market manipulation since the Great Depression." What Snodgrass' comment alludes to is that public antagonism, and the truth around the economic devastation that multinational entities like Goldman continue to cause, has the potential to destabilize the firm and its image. The court of public opinion, while weak, does exist. This is exactly why the blessing of development elites tasked with reducing economic inequality for their philanthropic projects—and their influence on the economic curriculums of those who suffer the most from corporate domination and Western imperialism—is so critical to their continued rule.

The problem with 10,000 Women, is not just that $100 million could have been spent in wiser ways, for example, to strengthen formal education and health budgets or fund scholarships that would allow underserved youth to get credible degrees in political science, business, law, sociology, economics, teaching, engineering or whatever field appeals most to them. This was Goldman's money and they can spend it as they wish. The more fundamental problem is that, by funding NGOs and other institutions to promote and validate their economic ideas, Goldman is actively normalizing a development theory that suits their own agenda. This allows them to influence not only what women in developing countries are learning about their economies and their own role in it, but also which type of woman counts as a “worthy investment.” Needless to say, the type of woman who believes that campaigning against corporate domination and unequal global trade relations will lift her community out of poverty is not one of them.

Distressingly, Goldman is not the only multinational that uses philanthropic education campaigns for their own interests. This brand of imperial philanthropy is on the rise. In our next posts on this topic, we will further discuss the trend, its implications and offer some alternatives and strategies on how to push back against it.

Maria Hengeveld researches and writes about international development, labor, gender and corporate accountability. Twitter @HengeveldMaria


The term Womenomics was allegedly first coined by The Economist in 2006 It is associated with 1) the idea that economic problems can be fixed by promoting women's participation in the workforce (for example, Japan) and 2) a Lean-In type of strategy that advices women on how to be successful in the workplace. 

2 Which it may very well, regardless of this critique.