Charity Town Hall Meeting Proposed CFC Regulations April 2013

To educate charity stakeholders on proposed changes to Combined Federal Campaign (CFC) regulations that may affect charities throughout the country. Meeting Purpose

2011 – CFC 50 Commission Formed Purpose: Study the CFC and make recommendations for: –Improving Accountability –Increasing Transparency & Accountability –Making the CFC More Affordable Background

July 2012 – Delivered report with 24 recommendations in the following areas Donor participation CFC Infrastructure Standards of accountability & transparency Background

April – Proposed Regulations issued for public comment Reported intention of proposed regulation changes – Strengthen the integrity of the campaign – Streamline the operations – Increase effectiveness of the program Background

Donor Participation Current Regulations  Current federal employees can be solicited only from Sept 1 – Dec 15  Retirees and federal contract employees can give only through check or cash  Campaign solicitation timeframe Oct 1 – Jan 15  Retirees and federal contract employees can give through credit card  New employees can pledge within 30 days of hiring outside campaign

Donor Participation Current Regulations  Employees may pledge by paper or online systems  Currently paper pledges account for well over half of the CFC pledges  Some areas report upwards to 12% of donations made by cash or credit card or through fundraising events , &  Pledges can be made only electronically  Prohibits fundraising at events and activities

Donor Participation Current Regulations  Donors may give to any national or international charity but only to local charities in their CFC area  Donors may give to any CFC charity – national, international or local  Donors must designate to a charity on the online charity list  Undesignated pledges are prohibited

CFC Infrastructure Current Regulations  184 independent geographical zones of varying size  Each CFC area is overseen by a committee of federal employees (“LFCC”)  LFCCs become the Regional Coordinating Committee (RCC) with unspecified larger geographic zones  Each RCC may hire marketing support – though not required

CFC Infrastructure Current Regulations  LFCC hires a staff (“PCFO”) 1) Print catalog 2) Promote campaign through kick-offs, charity fairs, etc 3) Process pledges & distributions 4) Provides training 5) Field questions from federal workers & charities  Abolish PCFOs  Creates Central Campaign Administrators (CCA)  Admissions & pledging on centralized website  Local charity applications (national, international & local) online and reviewed by OPM and RCCs  Charities can still apply through federations

Transparency Current Regulations  Each CFC area is financed by PCFO which pays for staff, paper catalog, marketing, account, audit  PCFO fronts cost and gets repaid using first donations  National average cost 10%  Fund CFC costs by charging charities up-front, non-refundable application fee to pay for CCA and RCC expenses  No details about fee structure except annually determined by OPM based on proposed campaign budget

Transparency Current Regulations  Annual eligibility for charities  All local CFC charities with revenue of $100,000+ must have audit  All national and international charities, regardless of size, must have an audit  Audits will be required (national or local) with revenues $250,000+  Only financial reviews are required for charities with revenues between $100,000-$250,000  Abbreviated applications in 2 of every 3 years

Unknown Implementation Dates Number of RCC If RCC will hire marketing agencies and, if so, how many across the country Plan, if any, to make up for lost donors due to elimination of paper pledges How federal employees without computer access will pledge

Unknown How CCA will plan for and respond to calls/questions/concerns from federal employees and charities How much online pledging & charity application system will cost How charity application fees will be determined & what the fees will be How lenient OPM and RCC will be regarding charity application errors/correction opportunities

Unknown How RCC and OPM will review charity applications – over 20,000 estimated national, international and local charities currently in campaign including federation member applications. It is unclear if federation member applications will also be reviewed by RCC How RCC and CCA will support the hundreds of hours to support charities during application period

Affect on Charities Observers’ estimates Range from 100s to 1000s dollars for each charity’s application fee Application fees for 2 years before knowing results of first year designations Some PCFOs report 60%-80% of charity applications have errors which may affect eligibility

Affect on Charities Elimination of Paper Pledges Fewer giving methods for donors means fewer donors Cash & check donations can account for 12% or more of total pledges More than half of pledges currently are through paper pledges. Will people still give? If less money is raised, then charities will drop out and the charities remaining will have to cover more of the expense burden

Possible Outcomes Using the Following Estimate ….. Gov’t sets nationwide CFC budget at $10M Charge to charities is the same Application fee = $425 Using the Following Estimate ….. Gov’t sets nationwide CFC budget at $15M Charge to charities is the same Application fee = $638

“X” PCFO Charity Drop-Out Due to Not Making Enough to cover fee in Pledges in Previous Year “X” charities received less than the estimated fee of $425 last year. “X” charities received less than the estimated fee of $638 last year.

“X” PCFO If local charities want to make at least $750 through CFC, then “X” additional charities would drop If local charities want to make at least $1,000 through CFC, then “X” additional charities would drop

“X” PCFO “X” local charities received designations out of a total of “X” local charities in the campaign Best Case Scenario …. “X%” of total local charities in the campaign would apply, based on 2012 results

Call to Action Goal: 1,000 comments by June 1 st  Engage your clients and board in the process and education efforts Legislative face-to-face visits

Questions ????

Thank you!