The Corporate Citizen, May 2007

Aligning Philanthropic Initiatives with Business Interests

Interview with Stacey D. Stewart, SVP,
Office of Community and Charitable Giving, Fannie Mae

The Corporate Citizen (TCC): In February of this year, the Fannie Mae Foundation announced that after nearly 30 years in operation, it is closing its doors.  Fannie Mae will carry on philanthropic activities through a new office in the corporation. Why was that decision made?

Stacey D. Stewart (SDS): Fannie Mae established a new Office of Community and Charitable Giving—OCCG—that would be able to leverage and combine the company's offerings to have the greatest impact on housing challenges and the quality of life in our hometown of Washington, D.C. 

Having this new office means we can stack the company's strengths—our capital (intellectual, investment, cash), our mortgage financing, our corporate giving, and our employee volunteerism—and bring everything to bear on a specific problem.  

TCC: What have been the primary challenges to implementing this decision?

SDS: We proceeded with care to ensure that partners, grantees, stakeholders, and employees were aware of our intentions and goals.  The Foundation has explained that, for the remainder of 2007, it would fulfill various commitments for grants and projects. In addition, the Foundation's sponsorship of Help the Homeless will continue and, in fact, be expanded from Washington, D.C., to seven cities across America. 

I'm sure the Foundation appreciates the loyalty of its employees whose hard work is critical to the success of the Foundation's initiatives.  At the same time, Fannie Mae has faced the challenge of establishing a new division for carrying out the Company's philanthropic initiatives.  I think we met the primary challenge of supplying good, clear information as a preventative to rumors and speculation. 

TCC: Will the Fannie Mae Office of Community and Charitable Giving focus on the same issues and needs as Foundation, or have you undergone a shift in priorities, as well?

SDS: We announced three clear mandates for Fannie Mae's philanthropy that are similar to the Foundation's main goals, but emphasize the Company's housing mission. 

Those three are:

1. Building thriving neighborhoods in the District of Columbia through investments in housing, education, preventing homelessness, and other areas
2. Addressing the nation's housing challenges through initiatives that produce safe, decent homes for those who need homes the most and that develop strong communities
3. Advancing efforts to end homelessness in America

TCC: You've probably had to make some tough decisions about whether to continue certain programs and activities that existed in the Foundation. Could you please talk about how you've evaluated what to keep and what not to keep under the purview of the Office of Community and Charitable Giving?

SDS: In deciding to conduct our philanthropic activities directly from the corporation, rather than through a private foundation, we had to develop our own programs and strategies.  These are the programs and strategies that support our three overarching goals, as I've just outlined.

TCC: Conversely, could you please share some examples of new community and charitable opportunities that Fannie Mae now has that it would not have been able to pursue under the Foundation's purview?

SDS: I'll give you one powerful example that's underway right now.  Fannie Mae is supporting HomeStay, which represents the company's efforts to help our lender customers protect borrowers and bring stability to the subprime mortgage market. 

Along with loss mitigation operations and lending options for borrowers, Fannie Mae was able to maximize these efforts with philanthropy—through our Office of Community and Charitable Giving, which was able to step up to the plate with $5 million in grants to NeighborWorks and nonprofit initiatives that help people in danger of defaulting on their mortgages. 

This highlights the power of combining our business strengths with our philanthropy in ways that help those who need our help the most.

TCC: Some people think that business objectives should be separate from philanthropic activities and that companies should not pursue charitable work that aligns with their business mission. What do you think about this?

SDS:  If the goal is to help people, why would you want to tie one hand behind your back and say, okay, we'll help you with our business initiatives but not with any coordinated philanthropy?  Or, conversely, we'll give you grants but won't back them up with business initiatives that will maximize those grant dollars?

No, if the true bottom line is helping people, then you want to be able to use all the tools in your toolbox and use them in coordinated, smart ways that get the most out of your efforts.

TCC: Could you please offer two pieces of advice: One, what can other companies and corporate foundations learn from Fannie Mae's experience, and two, what should nonprofits know about the Office of Community and Charitable Giving?

SDS:  First, just because an effort is philanthropic is no excuse for it not to be smart, strategic, coordinated, and well-publicized to get the most bang for the buck.  You wouldn't permit your company to undertake a business initiative and then hold back on using some of your accounting resources or research resources or HR.  It makes similar good, business sense to use philanthropy and employee volunteerism as part of your efforts to get a job done so that everyone benefits. 

Second, to anyone who wants to know more about OCCG, just look at our three overarching mandates (more affordable homes and vital communities across America; prevent and end homelessness; make our hometown a world-class place to live) to know where we're working now and where we'll be headed in the future.
 
TCC: Final thought — looking ahead to 2008 and beyond, what do you think is in store for Fannie Mae and the new Office of Community and Charitable Giving?

SDS:  We ramped up very quickly.  Going from two staff to full staff.    Developing and funding brand-new programs.  And all this in less than three months.  Now, as of June, OCCG is operational and open for business.  Considering all we did before we were fully staffed and operational, I think you're going to see a lot from us this year and then even more next year. 

We want to change the world—not by throwing money at problems but by understanding those problems, being smart about solutions, and working with everyone involved who wants to see the job get done and get done right.  And we're not going to be shy about explaining everything we're trying to do.  Our philanthropy is transparent, has a real-world impact, and we're proud of it.

TCC: Thank you for your time.

Stacey D. Stewart is Fannie Mae's senior vice president, Office of Community and Charitable Giving. Stewart leads Fannie Mae's diversity and inclusion strategy and the overall corporate giving strategy and programs. Prior to joining Fannie Mae in February 2007, Stewart was president and chief executive officer of the Fannie Mae Foundation.