Fannie, Freddie Slash Funding for Charities
Monday, May 18, 2009
Fannie Mae and Freddie Mac reduced charitable giving by more than 40 percent from 2006 to 2008 and focused it more sharply on housing-related issues, leaving some local nonprofits without a major source of funding.
The mortgage giants' charitable giving is projected to drop slightly again this year, and the longer-term future of the companies -- and their donations -- is still unclear.
District-based Fannie Mae and McLean-based Freddie Mac were veering toward collapse when they were taken over by the government in September in a bid to stabilize the home-loan market. The companies have long been the two biggest donors to Washington area charities, and the takeover sent worries throughout the local nonprofit community.
Fannie Mae and the Freddie Mac Foundation together gave more than $47 million last year, down from $83.5 million in 2006, the year before Fannie shut down its foundation and moved its giving in-house. The Freddie Mac Foundation is still funded by an endowment. In the first quarter of this year, the two companies gave out $4.5 million.
Fannie Mae said it expects that its giving in 2009 will be about the same as last year, while Freddie estimates that its contributions to foundations will drop to $11.1 million from $15.3 million.
"We remain committed to the community and supporting stable homes and neighborhoods, but it's a reflection of the economy and our status," Freddie spokesman Doug Duvall said.
The future of Fannie and Freddie's charitable efforts will have to be worked out with their government regulator, the Federal Housing Finance Agency.
Fannie Mae spokesman Brian Faith said the mortgage finance giant is committed to continuing to support local charities. The company's charitable mission has been aligned with its corporate mission and focuses primarily on foreclosure prevention, he said.
While nonprofits hope the money keeps flowing, they're reaching out to other corporate donors as well as individuals in case it doesn't.
That task is made more difficult in a challenging economic environment. Fannie and Freddie are "significant supporters and investors in our region," said Tamara Lucas Copeland, president of the Washington Regional Association of Grantmakers.
"What we see is a number of nonprofits that are struggling and trying to determine how they're going to support the important work they're doing," she said. "It's not only because of Fannie and Freddie."
Mary Funke, executive director of N Street Village, said her organization has requested grants from both companies. N Street Village, which helps homeless women, only met 49 percent of its funding goal from Fannie's annual Help the Homeless walkathon last year after the company's difficulties led people to believe that the event wasn't going to happen, she said.