Pablo Martinez Monsivais/AP Photo - The Freddie Mac corporate offices are seen in McLean, Va. The Freddie Mac Foundation announced last month that it plans to spend its assets down to zero by early 2015.
This story has been updated.
Fannie Mae and the Freddie Mac Foundation, the Washington area’s two biggest contributors to local charities, will probably end their philanthropy in the next few years, with troubling consequences for nonprofit groups that focus on education and human services for the poor, children and families, predicts a study to be released Monday.
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The two federal housing financing corporations gave nearly $100 million to 500 local organizations in the past four years, but they significantly cut their donations after the housing bust and financial crisis hit in 2008.
Since then, the corporations have been placed in conservatorship and have focused more of their giving on groups that address housing issues. It is unlikely that their giving will return to previous highs, according to a report by George Mason University’s Center for Regional Analysis.
The Freddie Mac Foundation announced last month that it plans to spend its assets down to zero by early 2015. Fannie Mae, which previously announced plans to discontinue the homeless walkathon on the Mall after the coming Nov. 19 event, is also likely to receive a directive from federal officials to “curb if not eliminate its nonprofit funding as well,” the report says.
A Fannie Mae spokeswoman said the company had not announced any changes to their corporate giving, which was focused on housing challenges across the country.
The implications of cuts for regional charities are significant.
“The real impact will be measured in human costs,” the George Mason report says. “Fewer homes for foster care kids, fewer beds for the homeless, and the many other bottom-line human needs that are being served.”
John McClain, who wrote the report with Stephen S. Fuller, said the loss of the corporate money could cause some nonprofit groups to close, “particularly if they were using the Fannie and Freddie money for operating costs, payroll and the like. There may be cases where nonprofits should merge or consolidate to create economies of scale.”
The news comes at a grim time for charities. There has been a disturbing spike in the number of children living in poverty . Unemployment rates, although lower in the District, Northern Virginia and suburban Maryland than the national average, remain high, and the mental toll of long unemployment has reached startling proportions.
Consumer incomes have fallen, and even those who are employed and have health insurance might have to pay more for it. There has been a 35 percent surge in demand at area food banks, and the Capital Area Food Bank was in such dire straits that it planned to charge for fresh produce until a local donor came forward this summer. That donor, Bill Conway, is planning to give away half of his $2 billion fortune to help the poor and long-term jobless.
“If there’s somebody else out there like Mr. Conway, we need him now,” said Chuck Bean, executive director of the Nonprofit Roundtable of Greater Washington, one of eight organizations that commissioned the report. “While we have a major challenge, at the same time we live in one of the wealthiest regions in the country.”
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