Mortgage Giants' Fall May Hurt Nonprofits

Fannie Mae and Freddie Mac's impact on social services cannot be measured in dollars alone, said Tamara Lucas Copeland, president of the Washington Regional Association of Grantmakers. Both companies organize charity walks to fight homelessness and encourage thousands of employees to volunteer at nonprofit agencies.

"It's the leadership that they've shown as well, along with the resources that have been generated," Copeland said. "When you look at their work, particularly around vulnerable children and homelessness, they are certainly the pillars of the community."

The two companies also make millions of dollars in charitable contributions nationwide. Freddie Mac practices its philanthropy through the independent Freddie Mac Foundation. Fannie Mae, meanwhile, shut down its independent foundation in 2007 during a period of broader upheaval. The corporation has continued to give to area charities through an in-house unit.

Both companies have been accused over the years of making tax-exempt contributions to advance corporate interests, such as by supporting community initiatives to build goodwill with potential political or business allies. But leaders in the nonprofit community defended their grantmaking.

"We do not support any statement that says these grants were made just for political purposes, because we've seen the positive impact and the outcomes on the ground," said Glen O'Gilvie, chief executive of the Center for Nonprofit Advancement.

"The support that they've provided . . . helps prevent crime and violence, increases academic achievement," he added. "If we don't have that, we will as a community see the difference very quickly."

Even if the companies ultimately continue their charitable activities, the uncertainty during the transition could cause delays in awarding grants to groups that are expecting them, creating budget gaps for organizations.

"There's tremendous anxiety," said Phyllis R. Caldwell, president of the Washington Area Women's Foundation. "The uncertainty around what will happen will just cause things to stand still, and that creates more anxiety."

Some nonprofit groups are in a state of panic about where to turn for new dollars.

"There's not a place you can go to sign up and get alternate funding," said Lindsey Buss, president of Martha's Table, which provides meals and other services to needy District residents. "We'll have to either cut down on the number of people we feed, or do we reduce the number of children we serve in our programs, or do we make up the difference somewhere else? There's not an easy answer right now."

Some area groups rose to prominence largely because of sustained financial backing from Fannie Mae and Freddie Mac over the past two decades.

"They've been with me and the organization from nearly the beginning," said Susie Kay, who in 1996 founded the Hoop Dreams Scholarship Fund for D.C. public school students and receives six-figure grants from the companies each year. "You can't put a price tag on that, literally or figuratively."

The story is similar at Alexandria's Carpenter's Shelter, which serves homeless people. "They've had deep pockets for many years and frankly took a risk on Carpenter's Shelter," Executive Director Fran Becker said. "We had a vision, and they're the ones that backed that vision."

Several nonprofit leaders said they hope that by highlighting the impact of Fannie Mae and Freddie Mac's grantmaking, they can persuade federal officials to continue the giving, even with the companies under government control.

"They need to look at how far-reaching the tentacles of Fannie Mae and Freddie Mac are," said Mary Funke, executive director of N Street Village, which helps homeless women in the District. "The ramifications are potentially putting people back on the street. The ramifications are children being malnourished."