1. Using Pledge Data to Anticipate Possible Impacts of Regulatory Changes in the CFC Workplace Giving Alliance, Salem, MA February 26, 2013 Atlanta

2. Campaigns that have made our project possible 001115212407540655773901 004116214409542656794921 005117218427543670811923 006140220432545672830924 007141225451551674832925 051142230452571682838926 052162248454580709839927 072163249458605712846928 073164257466606728847931 092180283481615729851940 095185351500626742853941 096191371501639746854943 100193373503642748857944 105194374521644754870971 106197376524651760896975 109210391528654770897990 772898995 THANK YOU!

3. Data  98 PCFOs (including NCA) reported for all three years: 2009, 2010 and 2011  These 98 represented just over 2/3 of the total campaign in dollars  2009:69.57%  2010:69.87%  2011:70.47%  Totals reported were extrapolated up to 100%, which introduces some degree of error, especially for lower-earning charities

4. Three “Takes”  Connecting number of PCFOs to donor participation  Pledge volatility  Cascading drop in number of charities in CFC

5. Correlation between decline in number of PCFOs and decline in donor participation

6. Compare Reduction in # of Local Campaigns to Participation Rate

7. Volatility in the pledge results

8. Volatility (Natl/Intl Charities) 2009-10 Greater than + or - 50.0%46322% Greater than + or - 25.0%102048% Between + and - 25%110152% Went down110552% Went up101648% Totals2121100% 2010-11 Over + or - 50.0%44420% Over + or - 25.0%107348% Between + and - 25%118552% Went down139162% Went up86738% Totals2258100%

9. Cascade The Charity Perspective

10. Assumptions  Overall Campaign cost will come down from current budgeted $29 million  We use $20 million  Half to be paid by national charities; half by locals  Fee to be flat, charged in advance, non-refundable  Data reflects 2009, 2010, and 2011 pledges  Many charities will know and be guided by their prior CFC results  Charities will be looking for a positive net

11. Flat fee cascade First PassSecond PassThird PassFourth PassEquilibriumLost/Remain Budget$10,000,000 2011 Charities25362085199419621954 Proposed fee $3,943 $4,796 $5,015 $5,097 $5,118 Charities Falling Below Fee 451+ 91+ 32+ 8+ 058223% Charities remaining2085199419621954 77%

12. Assume:flat fee at $5,000  Number of remaining natl/intl charities:1954  Fee per charity:$5,000  Earned for natl/intl share of CFC budget:$9.77 Million

13. Cascade if charities consider volatility First PassSecond PassThird PassFourth PassEquilibriumLost/Remain Budget$10,000,000 2011 Charities25361964183117931780 Proposed fee $3,943 $5,092 $5,461 $5,577 $5,618 Charities falling below fee in 2009, 10 or 11 572+133 + 38+ 13+ 075630% Charities remaining1964183117931780 70%

14. Assume:flat fee at $5,000 charities take volatility into account  Number of remaining natl/intl charities:1780  Fee per charity:$5,000  Earned for natl/intl share of CFC budget:$8.9 Million

15. Cascade if charities expect margin of gain First PassSecond PassThird PassFourth PassFifth PassEquilibriumLost/Remain Budget $10,000,000 2011 Charities253617501603156515541548 Proposed fee $3,943 $5,714 $6,238 $6,390 $6,435 $6,460 Desired Margin of Gain $2,000 Drop-out Level$5,943$7,714$8,238$8,390$8,435$8,460 Charities falling below desired margin of gain in 2009/10/11 786+ 147+ 38+ 11+ 6+ 399139% Charities remaining175016031565155415481545 61%

16. Assume: flat fee at $5,000 charities take volatility into account charities want a margin of gain of $2000  Number of remaining natl/intl charities:1545  Fee per charity:$5,000  Earned for natl/intl share of CFC budget:$7.73 Million

17. Other factors that may increase drop-out rate  Up-front, non-refundable fee likely to come as a shock  Above figures reflect pledges, not actual receipts, and do not include federation charges  Charities may have to pay TWO annual fees in advance before they learn how well they may do under the new system.  In subsequent years, charities remaining in the campaign may “re-sort” with at least some of the continuing groups dropping below the fee