logo
    • Magazine
    • Membership
    • Donate
  • Racial Justice
  • Economic Justice
    • Collections
  • Climate Justice
  • Health Justice
  • Leadership
  • CONTENT TYPES
  • Subscribe
  • Webinars
    • Upcoming Webinars
    • Complimentary Webinars
    • Premium On-Demand Webinars
  • Membership
  • Submissions

Eulogies and Future for the Fannie Mae Foundation

Rick Cohen
January 31, 2008
Share
Tweet
Share
Email
Print

Whatever one might have thought of the Fannie Mae Foundation, itself the subject of some critical scrutiny in the press for its astronomical executive salary levels (the Foundation’s CEO took home almost $650,000 in salary and compensation according to the foundation’s 2005 990PF filing), its absorption of much of the advertising budget of the corporation (per a deal that was struck by former president Bill Clinton allowing Fannie to consider its for-profit-related advertising a charitable activity), and intimations that the foundation slanted its grantmaking to curry political favor for the corporation. However, for all the critical press coverage, the Fannie Mae Foundation plugged along putting out a ton of grants to community developers, funding substantial research on housing and economics, and mounting a very usable web-accessible research program called KnowledgePlex—until a myriad of accounting and accountability problems under the leadership of CEO Frank Raines undermined the foundations of the nation’s largest for-profit government-sponsored enterprise or GSE.

Now comes word that Fannie is shutting the foundation and moving all of its charitable giving back to the corporation. The highly paid CEO of the foundation promised that the corporation would maintain the foundation’s annual charitable grantmaking of over $60 million despite the elimination of the foundation itself, and though no longer required to disclose its grants (there is no requirement to disclose corporate charitable giving except if it occurs through a corporate foundation that files a 990PF), it would publish all of its grants on its website. Senator Grassley was quoted in the Chronicle of Philanthropy suggesting rather oddly that the foundation shutdown would potentially enhance the transparency and accountability of Fannie’s charitable grantmaking.

Sign up for our free newsletters

Subscribe to NPQ's newsletters to have our top stories delivered directly to your inbox.

By signing up, you agree to our privacy policy and terms of use, and to receive messages from NPQ and our partners.

The corporation’s track record in the past few years makes the audiences for these philanthropic assurances feel a bit queasy, and the press coverage has focused on Fannie’s historic grant recipients uttering hopeful predictions that Fannie will maintain its past grantmaking to them. But there is another concern. For much of the foundation’s history, particularly as the Fannie Mae corporation established regional offices in locations that seemed to have as much political as market meaning in their site selection, grant recipients were always told to remember the “firewall” separating the foundation from the corporation. According to the philanthropic firewall theory, the grant recipients and their constituents working with or seeking help from the Fannie Mae Foundation would not find themselves suddenly the fodder for the corporation’s business or political activities. The new Fannie CEO, Daniel Mudd, has made it pretty clear that the elimination of the foundation is meant to allow greater coordination between Fannie Mae’s foundation and its business, so say goodbye to the firewall.

Time will tell what this means. Notwithstanding the excellent spin issued by the PR-savvy Fannie Mae, assurances about the nature, amount, and transparency of corporate philanthropy are not sure bets. The consequences of demolishing the firewall can go either way. On one hand, the foundation’s somewhat politicized philanthropic giving might become very tied to business and politics as Fannie-the-corporation fights off federal regulators at HUD and GSE legislation currently wending its way through Congress. Maybe that might get Congress to realize that there is a public need for mandatory disclosure of corporate philanthropic grantmaking through corporate foundations and through direct corporate giving, given the immense economic power of behemoth corporations like Fannie. On the other hand, perhaps this merger could induce Fannie to use some of its philanthropy to more directly address critical problems such as subprime and predatory lending, which might look like bailing out some part of Fannie’s subprime portfolio (supposedly around 2 percent) but might actually help save the homes of tens of thousands of low-income homeowners facing foreclosure due to heinous predatory practices. Whichever way it goes, we’ll be sure to keep a close eye on the new version of Fannie Mae philanthropy.

Share
Tweet
Share
Email
Print
About the author
Rick Cohen

Rick joined NPQ in 2006, after almost eight years as the executive director of the National Committee for Responsive Philanthropy (NCRP). Before that he played various roles as a community worker and advisor to others doing community work. He also worked in government. Cohen pursued investigative and analytical articles, advocated for increased philanthropic giving and access for disenfranchised constituencies, and promoted increased philanthropic and nonprofit accountability.

More about: Management and LeadershipOpinionThe Cohen Report

Become a member

Support independent journalism and knowledge creation for civil society. Become a member of Nonprofit Quarterly.

Members receive unlimited access to our archived and upcoming digital content. NPQ is the leading journal in the nonprofit sector written by social change experts. Gain access to our exclusive library of online courses led by thought leaders and educators providing contextualized information to help nonprofit practitioners make sense of changing conditions and improve infra-structure in their organizations.

Join Today
logo logo logo logo logo
See comments

Spring-2023-sidebar-subscribe
You might also like
Hierarchy and Justice
Cyndi Suarez
Salvadoran Foreign Agent Law Threatens Human Rights Movements
Devon Kearney
Charitable Tax Reform: Why Half Measures Won’t Curb Plutocracy
Alan Davis
Healing-Centered Leadership: A Path to Transformation
Shawn A. Ginwright
Into the Fire: Lessons from Movement Conflicts
Ingrid Benedict, Weyam Ghadbian and Jovida Ross
How Nonprofits Can Truly Advance Change
Hildy Gottlieb

NPQ Webinars

April 27th, 2 pm ET

Liberatory Decision-Making

How to Facilitate and Engage in Healthy Decision-making Processes

Register Now
You might also like
Hierarchy and Justice
Cyndi Suarez
Salvadoran Foreign Agent Law Threatens Human Rights...
Devon Kearney
Charitable Tax Reform: Why Half Measures Won’t Curb...
Alan Davis

Like what you see?

Subscribe to the NPQ newsletter to have our top stories delivered directly to your inbox.

See our newsletters

By signing up, you agree to our privacy policy and terms of use, and to receive messages from NPQ and our partners.

NPQ-Spring-2023-cover

Independent & in your mailbox.

Subscribe today and get a full year of NPQ for just $59.

subscribe
  • About
  • Contact
  • Advertise
  • Copyright
  • Careers

We are using cookies to give you the best experience on our website.

 

Non Profit News | Nonprofit Quarterly
Powered by  GDPR Cookie Compliance
Privacy Overview

This website uses cookies so that we can provide you with the best user experience possible. Cookie information is stored in your browser and performs functions such as recognising you when you return to our website and helping our team to understand which sections of the website you find most interesting and useful.

Strictly Necessary Cookies

Strictly Necessary Cookie should be enabled at all times so that we can save your preferences for cookie settings.

If you disable this cookie, we will not be able to save your preferences. This means that every time you visit this website you will need to enable or disable cookies again.