Everyone wants to know — needs to know — whether Fannie Mae and Freddie Mac will be able to continue giving tens of millions of dollars to local charities. But nobody knows, maybe not even the staff at Fannie Mae and the Freddie Mac Foundation, maybe not even administrators at the Federal Housing Finance Agency who are reviewing the companies’ giving.
Even though the finances of many Washington-area charities are inextricably linked to the two companies, their concerns are small potatoes compared with another matter in which Fannie and Freddie are closely involved: the national economy.
The two backed more than half the country’s home mortgages, which put them in dire straights when the flood of foreclosures kept coming and coming. Combined, they lost nearly $14 billion in a year.
The Treasury Department decided in September to take control of Fannie and Freddie, realizing that their collapse could further damage the already-battered economy.
The two companies’ roles in the local economy is no less important.
The jobs and tax revenue associated with D.C.-based Fannie Mae and McLean-based Freddie Mac are critical to the region.
And their charitable giving, tops in the area for years, has had a major impact on low-income people in the region.
Top community leaders are trying to impress upon the feds the importance of the companies’ giving, a combined $47 million in the Washington region in 2007.
In late September, James Lockhart, director and chairman of the housing finance agency, received a letter from a dream team of regional leaders: Chuck Bean of the Nonprofit Roundtable of Greater Washington, Tamara Copeland of the Washington Regional Association of Grantmakers, Jim Dinegar of the Greater Washington Board of Trade, Tim Kime of Leadership Greater Washington, Glen O’Gilvie of the Center for Nonprofit Advancement, David Robertson of the Metropolitan Washington Council of Governments and Angela Woods of the local chapter of the United Way.
Together Fannie Mae and Freddie Mac invest in close to 400 Washington-area nonprofits, about 10 percent of all of those working in local communities, the letter stated.
“No other corporation, foundation or local government is prepared to make up the difference,” the community leaders wrote.
A written response from Lockhart, dated Oct. 2, offered a kernel of hope in its final line: “It is envisioned that the enterprises will continue to make charitable contributions.”
Still, it was a vague response that left a lot unanswered.
“We haven’t given up hope there will be some charitable giving at some level close to what it was before,” O’Gilvie said. “But we don’t really know.”
O’Gilvie and other community representatives — many of them Fannie and Freddie recipients — are lobbying Congress to step in and preserve the money because of its importance to the region’s battles to help the homeless, reduce housing costs, prevent foreclosures and serve at-risk youth.
On Oct. 22, six members of Congress from the Washington region wrote a letter to Lockhart to express their support.
Meanwhile, many nonprofits are preparing for the worst — major gaps in their budgets at a time when the stock market is hurting endowments, local governments face deficits and philanthropic foundations are being squeezed by requests from Fannie and Freddie grantees to fill in the gaps.
The Community Foundation of the National Capital Region, which both receives support from the two companies and distributes $91.2 million in grants annually, surveyed grantees in October to see how bad the situation is and how executive directors are responding. (Disclosure: Alex Orfinger, Washington Business Journal publisher, is on the foundation’s board.)
The not-so-bad news is no respondents said that more than 25 percent of their budgets came from Fannie-Freddie. The bad news: a sense of panic in the responses.
One respondent wrote: “I stay up at night wondering if I will have to reduce help for low-income new mothers who are depressed.” Others worried about having to cut services, lay off staff or close down.
Washington Business Journal – by Jonathan O’Connell, Staff Reporter
|
|
|
