Does Lehman's Aid Stand?

When Lehman Brothers filed for bankruptcy, it suddenly jeopardized thousands of jobs and billions in investments. It also put into question tens of millions of dollars in philanthropic commitments.

Like other Wall Street firms, Lehman has been a substantial supporter of arts, education, health, and other causes. Its grants include everything from a five-year, $5 million gift to the National September 11th Memorial and Museum, made just last year by the company, to $500,000 committed by the Lehman Brothers Foundation to next year's operating budget for DonorsChoose, a website that connects donors with projects at public schools.

Thalia Theodore, Northeast deputy director for DonorsChoose, says the organization has adopted a "wait and see" attitude. "Lehman's support for our operating budget is 7 percent," Theodore says. "Every dollar matters, but in the grand scheme of things, we feel pretty confident we will be able to weather the storm."

For now, it looks like DonorsChoose and other recipients, like the Harlem Children's Zone and Teach For America, are in luck.

As a separate non-profit entity, the Lehman Brothers Foundation was not a part of the firm's bankruptcy filing, and according to a source close to the matter, has sufficient assets to fund all of its financial commitments. "It will be business as usual," says the source. "I don't know what the plans are going forward, but the foundation certainly has sufficient assets to continue doing what it's doing for now."

Of course, as the foundation is entirely dependent on Lehman and its employees for its funding, it's only a matter of time before it will need to seek out a continued source of support. And there is a more immediate concern for organizations counting on Lehman-- the foundation gave away $10 million in 2007, but the firm itself committed $21 million in the U.S. alone.

Last year, for example, Lehman announced a four-year, $1 million grant to The Hospital for Special Surgery in New York. The gift represents a relatively small percentage of the $48 million the hospital raised last year, but the money was intended to pay for the construction of a pediatric reception center. The hospital has so far received $400,000 from Lehman Brothers, according to public relations director Phyllis Fisher, and has not been in recent contact with the firm.

Spelman University, which declined to comment on the matter, is in year two of a five-year, $10 million grant from Lehman Brothers to create a curriculum in global finance and economic development.

Lincoln Center For the Performing Arts, which has a $68 million operating budget, has received $3 million over the past three years from Lehman. The organization also declined to comment, besides to say that the firm has been "timely in its payments" up to this point.

For many of the recipients of Lehman's support, the financial fall-out from the bankruptcy will not be a dire concern; for some, the most upsetting aspect is the loss of valued collaborators.

"Really our concern is much more about what's going on there and the colleagues we work with," says a spokesperson for the Acumen Fund, to which Lehman is currently in the second year of a five-year, $5 million funding commitment.

For the staff of the Harlem Children's Zone, which has worked alongside Lehman Brothers employees for six years, the loss is the personal one.

"In addition to the generous financial support of the company and many of its employees, hundreds of the corporation's staff regularly came to Harlem to tutor students in math, to teach young people about personal finance and to give the agency technical assistance," says Geoffrey Canada, president and C.E.O. of the Harlem Children's Zone. "Those personal ties between us and the individual men and women from Lehman Brothers really makes this a heartfelt loss."

By Liz Gunnison

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