Mortgage Giants' Fall May Hurt Nonprofits
Sunday, September 14, 2008
The federal takeover of Fannie Mae and Freddie Mac has alarmed the Washington region's nonprofit community, sparking fear that the embattled mortgage giants, long among the area's biggest benefactors, could cut back or eliminate their charitable giving.
Last year alone, the two companies or their foundations collectively gave an estimated $47 million to area nonprofit organizations, including homeless shelters, scholarship programs, food pantries and social service agencies.
The federal government is reviewing the charitable activities of both companies and has not determined whether the takeover, announced last weekend, will change or end their patterns of giving. Officials at both companies declined to comment.
So far, their charitable activities are continuing as planned. Freddie Mac held its annual Hoops for the Homeless fundraiser yesterday at the Verizon Center, and Fannie Mae is preparing for its annual Help the Homeless Walkathon in November. But in already fragile economic times, the possibility that two of Washington's philanthropic pillars might topple has stirred deep anxiety among nonprofit leaders.
"If I were a weatherman for the nonprofit community, this is a category five," said Chuck Bean, executive director of the Nonprofit Roundtable of Greater Washington. "The scale of their investments is simply unmatched in our region, and there's no one else prepared to pick up the slack."
The uncertainty is particularly taxing on small agencies whose livelihoods rest heavily on Fannie Mae and Freddie Mac's continued generosity.
At SERVE (Securing Emergency Resources Through Volunteer Efforts), an agency in Prince William County that serves the homeless and underprivileged children, grants from the two companies make up about 18 percent of the annual budget. Asked whether she worries about the fate of those gifts, President and Chief Executive Cheri Villa said: "Oh my gosh, yeah. I haven't slept in four nights."
"It could be catastrophic, very quickly, to the needs at the bottom end of the rung that we serve: the food, shelter, housing, just the basics," Villa added.
District-based Fannie Mae and McLean-based Freddie Mac are the area's largest corporate donors, and if they were to lessen or stop their giving, the impact on the region's social safety net would be devastating, nonprofit leaders said.
"They are numbers one and two," Bean said. "Numbers three, four, five, six, seven, eight, nine and 10 are not prepared to pick up the slack. There's going to be scores of unmet needs."
"We just look around and wonder who's going to fill that gap," said Linda Dunphy, executive director of Doorways for Women and Families, an Arlington County shelter.
Mary Agee, president of Northern Virginia Family Service, said less giving would result in "a major erosion of the safety net for our families."