Charity Coalition Testifies Against Proposed CFC Changes

Group Predicts Dramatic Drop in Critically Needed Funds if New Rules Proposed by OPM are Implemented

(July 10, 2013) Washington, D.C.—Kalman Stein, President and CEO of EarthShare and representing a coalition of organizations made up of more than 3,000 charities supported by federal employees through the Combined FederalCampaign (CFC), testified today at a Congressional hearing. The hearing, entitled “The Combined Federal Campaign: Making Every Dollar Count,” was requested by the Oversight and Government Reform Sub-Committee on the Federal Workforce, US Postal Service & The Census. It dealt with changes proposed by the Office of Personnel Management (OPM) to CFC, the nation’s largest, most successful workplace giving program.

Members of this coalition, which has become known as the “Save the CFC” coalition, signed a joint response to OPM detailing their concerns with several aspects of the proposed changes that they feel will result in dramatic drops in giving. Coalition members include: America’s Charities, Christian Service Charities, Community Health Charities, EarthShare, Global Impact, Human Service Charities of America, Independent Sector, National Black United Fund, United Way, and YMCA of the USA.

Stein, a member of The CFC-50 Commission and Chairman of the CFC Foundation, noted, “While we see conceptual value in many of the proposed changes, there are three areas where we have grave concerns. First is the loss of giving options. Second is the decrease in volunteers and local infrastructure needed to have an effective workplace giving program. And third is the new fee OPM is proposing.”

The purpose of The CFC-50 Commission was to advise the OPM Director on how to strengthen the integrity, operation and effectiveness of the CFC to ensure its continued growth and success.

In his testimony Stein also applauded a number of positive rule changes suggested by OPM, including changing and extending the campaignsolicitation period, allowing new hires to participate immediately, creating a disaster relief program, the expansion of universal giving that allows for donating outside of duty stations, and centralizing the national distributions.

Stein has noted that it is important to remember The CFC-50 Commission proposed that any recommended changes go through a thorough process of vetting and testing including the input of federal employees on an ongoing basis. “There is no mention of this in OPM’s recommendations,” said Stein. He also stated the Commission spent a significant amount of time discussing how to grow the campaign and raise more funds. “There’s very little in OPM’srecommendations that address this critical aspect of the Commission’s work,” said Stein.

Finally, Stein emphasized the need for OPM to seriously and methodically consider the massive feedback it is receiving from charities, donors and other stakeholders about the proposed changes and do no harm. “Everyone associated with the CFC believes in making every dollar count. But if there are no dollars left to count—as we fear could happen if some aspects of the proposed changes are implemented as is—then thousands of charities and the millions of families and individuals they serve will suffer”.

Steve Delfin, President and CEO, America’s Charities, said the $257 million given by federal employees last year through the CFC represents just a portion of the impact those dollars have.

“Dollars donated by federal employees are ‘unrestricted.’ They are ‘keep the lights on’ dollars. They also help leverage many times that amount in other funds and resources and are the most sustaining gift a charity can receive.” Delfin went on to say that certain aspects of the proposed changes will endanger much of that if implemented. “This is not in sync with the Executive Order creating the CFC which clearly states that the campaign exists to lessen the burdens of government and of local communities.”

Three Big Concerns

The coalition takes issue with three changes in particular that they believe will decimate the campaign. First, and most concerning, is the recommendation by OPM to discontinue accepting cash and check contributions and the use of paper pledge forms in the campaign. In 2012, $54 million, or only 22%, was donated on-line, out of a total campaign of $257 million. The proposed rule by OPM will immediately move the campaign to an all e-system.

“While we endorse the expansion of online giving options for federal donors, we know from decades of fund raising experience working with donors that it is a critical mistake to eliminate traditional means of giving,” said Thomas G. Bognanno, President and CEO, Community Health Charities of America, a member of the coalition that represents more than 2,000 health charities across the country.

Bognanno went on to say that many members of the military, Postal Service employees, Park Services personnel, and others in similar settings and circumstances are frequently without access to computers or cell phones. “An all electronic campaign will cut off thousands of federal donors from the campaign and result in a dramatic drop in contributions,” Bognanno stressed.

The second area of concern has to do with how the campaign is managed and run by federal employee volunteers. The proposed rule change seeks to dismantle the local volunteer structure “on the ground” that currently exists in favor of regional contracted marketing organizations. “The most basic rule in fund raising is people give when they are asked and we all know that the campaign succeeds because it is a person to person request, not when someone gets an email,” according to Thomas Youngblood, President and CEO, Christian Service Charities, another member of the coalition.

In his testimony Stein pointed out that one of the reasons the CFC has been able to earn a place as the world’s largest workplace giving campaign is because of the years of support from volunteers in providing hands-on, peer-to-peer communication. “Good fundraising requires face-to-face, open communication at the local market level,” emphasized Stein. “These proposed changes appear to dismantle that.”

Finally, few details have been provided on the proposed upfront and non-refundable fees for charities to participate in the campaign, including the amount of the fees and how they will be assessed and adjusted each year. Currently, there are no upfront fees. Based on possible changes, a charity would have to pay the fee twice before knowing whether they will see any return on the investment due to the way the campaign cycle works.

“Coalition members are in favor of considering a flat fee that recognizes there are costs associated with running the campaign, while ensuring all charities receive the exact same benefit, which is exposure to federal employees for the purpose of soliciting donations. There is no rationale for percentage fees that require some charities to pay far more than others for that same benefit,” said Stein. He also pointed out in his testimony that flat fees should be first tested at the local level before changing the entire campaign. “Changing the financial structure of the campaign is more far reaching and potentially disruptive so it should be developed with an equally cautious approach that does not put donations at risk,” Stein emphasized.

America’s Charities Delfin summarized the coalition’s position by saying, “Like OPM and the federal employee, everyone on the charity side is committed to making every dollar count. But the proposed changes in the current state will likely result in a massive decline in giving making any cost savings irrelevant. Our goal is for these changes to be put on hold, so all stakeholders can join in a dialogue with OPM, and work to develop a more contemporary approach to the CFC built on transparency, communication and local federal employee engagement, with a focus on growing giving.”

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Adam Shapiro
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