Financial services conglomerate Goldman Sachs said it will launch a program that will earmark $500 million to assist the small-business community.

Lloyd Blankfein

The initiative, called “10,000 Small Businesses,” will include the formation of an advisory panel that will include billionaire investor Warren Buffet, along with Goldman chairman and chief executive Lloyd Blankfein, and Michael E. Porter, the Bishop William Lawrence University Professor at Harvard Business School.

The Goldman program will contribute some $200 million toward educating small-business owners through community colleges and universities, and some $250 million in investments to financial institutions that support community development. An additional $50 million will be available for grants. Goldman will also provide mentoring and assistance to small business owners.

Seedco Financial Services will be the first recipient of  Goldman’s small-business largesse, which is expected to come in early 2010. Seedco is a New York-based nonprofit that grants loans within distressed communities.

“Our recovery is dependent on hard-working small-business owners across America who will create the jobs that America needs,” said Buffett 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 program comes amid continuing controversy over Goldman Sachs receiving payment in full from the federal government’s bailout of AIG, its plans to pay multi-million-dollar bonuses to executives, and chairman and CEO Lloyd Blankfein’s recent comment that the bank was doing god’s work. Blankfein said he was joking at the time, and has reportedly apologized for the firm’s behavior, saying the bank had “participated in things that were clearly wrong and have reason to regret.”