If the Dow Drops, Will Corporate Giving Drop? Look to the Mortgage Industry

The mortgage securities bubble is about to burst, and investors are worried. Charities should be worried, too. Will the industry maintain its commitment to fighting homelessness and poverty? We'll be watching like hawks, because the Dow is rebounding, but still shaky. If the industry drops its support of critical causes, that will be a bad augur for corporate philanthropy overall. Corporate giving in 2006 was $19.7 billion. Will corporate commitments to causes be sustained?

At first blush, Fannie Mae's decision to close its foundation appears to be a bad omen. The closing happens just as the government-sponsored enterprise, rocked by accounting scandals, announced it will cut operating expenses by 200% compared with 2006. Since 1979, the Foundation spent over $1 billion to fight homelessness, increase the supply of affordable homes nationwide and increase the quality of life in its hometown of Washington, DC. Will causes be left in the cold?

Fortunately, Fannie Mae is replacing its foundation with a new internal giving office. It closed the foundation to deflect criticism that Fannie Mae was using its tax exempt status to advance corporate interests and skirt campaign finance and lobbying laws. The new office plans to expand the foundation's "help the homeless" initiative beyond Washington to five major cities.

Let's hope so. If the mortgage securities industry balks on its social responsibility, that's not a good harbinger for Wall Street at large. Corporate giving is not a fair-weather commitment, and corporations must sustain their level of social responsibility--come rain or come shine.