CYNTHIA C. MERKLE
Affordable housing focus
After many years of donating money to various nonprofit organizations on an informal basis, the Massachusetts Mortgage Bankers Association has decided to make it official by forming an independent philanthropic arm of the association.
A nonprofit charitable organization, the Massachusetts Mortgage Bankers Foundation’s primary mission is to provide financial assistance for debt management education and to improve the quality and availability of affordable housing within Massachusetts.
“The MMBA has long participated in philanthropic efforts in partnership with community organizations and other credit-minded agencies,” said Kevin Cuff, executive secretary of the foundation and executive director of the MMBA, in a statement. “The establishment of the Massachusetts Mortgage Bankers Foundation formalizes and concentrates those efforts on behalf of the commonwealth’s residential mortgage lending industry. Ideally, the foundation hopes to provide a central effort in harvesting philanthropic gifts while overseeing the financial distribution to applying credit management agencies, other consumer educational opportunities, affordable homeownership programs and other housing-based efforts.”
Before the foundation was formed, the MMBA donated funds to various nonprofits, but there was never a formal way to evaluate requests.
“We were getting a number of requests from a number of nonprofits for sponsorship,” said Cynthia C. Merkle, vice president of the foundation and senior vice president at Boston-based Eastern Bank. “At that point it made sense to start developing a foundation. We really wanted to develop a source of funding for affordable housing initiatives.”
When Merkle was vice chairwoman of the MMBA a few years ago, she requested the formation of a research committee for a charitable foundation.
With the foundation now in place, requests will now be formally evaluated and each of the four officers will have an equal vote.
“You now have a dedicated board to evaluate requests,” said Kathleen C. Schreck, president of the foundation and sales manager at Danvers-based Mortgage Network.
The foundation is starting off with a seed grant of $75,000, provided by the MMBA.
“That was more than I expected,” said Merkle.
The foundation is actively seeking corporate partners who share “like philanthropic agendas” as well as those willing to provide financial assistance.
According to an MMBA statement, the mortgage industry “exploded in size and volume” in recent years as the lowest interest rates in more than 40 years opened up opportunities for homeowners and homebuyers. The association’s leaders then identified opportunities to give back to communities and other causes.
“The Massachusetts Mortgage Bankers Association Foundation represents the commitment of the mortgage finance industry to improve the quality and availability of affordable housing while bettering the understanding of the mortgage process [for] all those who seek homeownership in the commonwealth, particularly to those [in] underserved communities,” Schreck said. “This foundation formalizes the charitable giving process initiated by the MMBA and will broaden our outreach to the communities with which we serve.”
Merkle said some national grants that had also helped nonprofits in the past were drying up and the MMBA was hoping to at least partially fill that void.
Merkle said the goal of the foundation is to build $150,000 in capital in its first year.
The foundation officers said there is a need for financial assistance to credit management agencies, other consumer educational opportunities, affordable homeownership programs and other housing-based efforts.
On a Mission
The foundation will have set requirements, including a stipulation that a member of the MMBA must sponsor an applicant and the applicant must be a nonprofit organization.
“It’s all pretty much standardized,” said Schreck.
Application deadlines are expected to be in June and October of each year with funds released in September and January.
The foundation hopes to begin the first funding cycle in September 2005.
The Massachusetts Affordable Housing Alliance, a statewide nonprofit group that works to encourage local and state government and businesses to invest more money in affordable housing, was one of the organizations that has received funding from the MMBA in the past.
According to MAHA Executive Director Thomas Callahan, the alliance received a $750 donation from the MMBA last year. The funding helped support some of the homebuying and homeownership programs and classes that MAHA offers.
Past funding has come from conversations with the MMBA, Callahan said.
“We have a relationship with the MMBA,” he said.
Callahan said the mortgage industry is one in which people make a lot of money, but don’t always give back to the community. He said he applauds MMBA’s efforts.
“This is a good step,” said Callahan. “MMBA is recognizing that it and its members need to step to the plate.”
Callahan said the creation of the charitable foundation is a signal to others in the housing industry, such as Realtors, home inspectors and real estate attorneys, that philanthropy shouldn’t fall on the shoulders of just one part of the housing industry.
“There needs to be a broader base of funding for affordable housing organizations,” Callahan said.
Habitat for Humanity Greater Boston, a nonprofit dedicated to building affordable homes in partnership with low-income families, has been another past recipient of MMBA funding. Gerald Devlin, a member of Habitat’s board of directors and regional vice president of National City Mortgage in Waltham, said the MMBA has given “significant dollars” in the past.
Devlin said the foundation is a better channel for the MMBA’s efforts and the impact on nonprofit organizations can be substantial.
“It has an enormous impact in terms of us being able to run our nonprofit,” said Devlin. “It’s important to know we’ve got strong supporters out there.”
Devlin added that it is good to know there are others with the same agenda.
“[The foundation] is a commitment to affordable housing in Massachusetts,” said Devlin. “We both have the same mission.”
The MMBA also has offered its financial support to the “Don’t Borrow Trouble” and “Stop Mortgage Fraud” campaigns, sponsored by Massachusetts banks and mortgage companies, respectively. The association also backs “The Massachusetts Mortgage Solutions” program, through which MMBA members offer alternative funding sources to consumers who may have experienced problems with predatory lending.
In order to set up an official foundation, the officers spent time researching other similar foundations, creating a mission statement and filing the paperwork to become a nonprofit organization.
Donna Miller, treasurer of the foundation and vice president of Ashland-based RBMG Inc., said she hopes for a big kickoff in the foundation’s first year.
“My goal is to really get it off to a big start,” Miller said. “We’re very excited about it.”
Schreck said the amount of money raised will determine the foundation’s level of giving, but says it’s starting off strong.
“I think it’s a great initial start,” Schreck said.
Merkle said a public relations campaign is also in the works to notify various nonprofit organizations of MMBA’s efforts and the opportunities available.
“Because funding is so limited out there,” said Merkle, “any support [to a nonprofit] will make a difference.”
Miller said there was some discussion about which organizations would be eligible for grants and the decision was to keep the eligibility requirements broad.
“We wanted to keep the door open,” Miller said.
Callahan said MAHA is always looking for available funding and is interested in what the foundation could offer.
“We would want to learn more about it,” said Callahan.
A formal announcement will be made at the MMBA’s annual New England Mortgage Banking Conference in Providence later this month. The MMBA Web site will also have a link to the foundation in upcoming weeks.
