It's a hard time to be a charity

— -- Every year for the last decade, the Child and Family Network Centers, a small, Virginia-based non-profit, submitted a fundraising request to the Freddie Mac Foundation.

And every year, the charitable arm of the mortgage-finance giant contributed thousands of dollars that helped the non-profit provide education and support to hundreds of needy children.

But this year's $350,000 request went to the foundation in early September — days before the federal government took over Freddie Mac and mortgage sibling Fannie Mae amid rising losses. Now, both firms' charitable grants, questioned by some as politically motivated, are on hold pending a Federal Housing Finance Agency review.

"We are in deep trouble if we don't hear something soon," says Barbara Fox Mason, the non-profit's executive director. "That's the money we count on to carry us through to the holidays," when other contributions arrive.

FHFA Director James Lockhart wrote on Oct. 2 "it is envisioned" that Fannie and Freddie "will continue to make charitable contributions." Corinne Russell, an FHFA spokeswoman, said Friday no final funding decisions have been made.

"If it doesn't come through at all, we'll have to cut families," says Mason.

The economic crisis threatening the nation with the worst recession in decades has set off tremors among non-profits and charities large and small that rely on donations from Wall Street, industry and average Americans.

The potential impact is just now taking shape, because 2009 grants from many philanthropic foundations are still being set and the end-of-year holiday giving season is opening. Although it's difficult to draw broad conclusions from reports by individual charities, many non-profits say they are feeling an economic pinch.

"This is the worst fundraising environment I've ever worked in," says Jeffrey Towers, chief development officer for the American Red Cross, which won promises of $100 million from Congress this month after 2008's hurricanes, tornadoes and floods depleted the group's disaster-relief reserves.

The Red Cross is suffering as much as a 30% drop in responses and contributions from new donors, and corporate donations are "coming in at lower amounts" at the halfway point of a campaign to raise $100 million by Dec. 31, Towers says.

Across the nation, philanthropic organizations report similar omens, some tied directly to this fall's credit crisis and plunge of financial markets.