CFC Update – Looking Ahead to the 2018 Campaign

Valued Nonprofit Partners:

On April 20, we shared an update from Jim Starr, our President & CEO on the overall performance of the 2017 Combined Federal Campaign (CFC). Since then, we have been engaged in an ongoing, organization-wide advocacy effort on behalf of our member nonprofits participating in the CFC, to not only gain additional clarity on 2017 results, but to work in concert with campaign officials and ensure the campaign’s future growth and success. We recently met with leadership from the Office of Personnel Management (OPM), who administers the CFC, and would like to share some additional findings and clarification that we have received about the 2017 campaign.

As stated in prior messages, current pledges generated in the 2017 CFC show a decline from $167 million in 2016 to $101 million in 2017. Compared to a 6% decline between 2015 and 2016, this 40% drop between 2016 and 2017 is unprecedented. We are very disappointed in this result, but we know that in order for the campaign to grow, all stakeholders (including participating nonprofits) must focus on moving forward – the future of the campaign, and how we can work together collectively to ensure its success.

We have maintained that the steep decline in pledges is a reflection of growing pains that occurred with the implementation of new regulations that took effect on January 1, 2017. To recap: in order to ensure compliance with new standards, the CFC underwent a complete administrative overhaul for the 2017 campaign, to include a centralized giving process, a change in assignment of responsibilities, and the total consolidation of roughly 150 local campaigns into 36 campaign zones, each of which covers a larger geographical region, in many cases encompassing multiple states and/or U.S. territories. OPM has told us that they are projecting the CFC to bounce back from the 2017 decline, producing a higher overall pledge result over the next 2-3 years.

Further, OPM has confirmed 3 key reasons they feel the 2017 CFC saw a decline in pledges:

1. Extension of Charity Application Deadline and Subsequent Delay in Final Charity List
   • Charity Application Extensions: The new online application system for charities wishing to participate in the 2017 CFC was launched on December 27, 2016, with an initial deadline for charities to submit application materials in late January 2017.  This application deadline ended up being extended twice, resulting in a final deadline of March 17, 2017, roughly 6 weeks after the initial deadline. While the extension was meant to accommodate participating nonprofits, offering as much time as possible to gain clarification on the format and requirements of the new application, it pushed back all other administrative processes such as application review, submission of appeals and final eligibility determinations.
   • Natural Disasters: This was further complicated by the natural disasters that occurred in summer 2017 – hurricanes Harvey, Maria, and Irma called for a large-scale response from nonprofits assisting in disaster relief efforts, calling their attention away from the CFC and towards public assistance. As such, OPM extended the required time for charities to respond to their initial eligibility rulings, further pushing back adjudication of appeals and collection of listing information to achieve a final list of charities to which federal donors could pledge their gift in fall 2017.
2. Delayed Assignment and Placement of Outreach Coordinators (OCs)
   • Role of Outreach Coordinators: With the new rule, the responsibilities of campaign marketing, promotion, and other activities including events designed to encourage employee giving were reassigned to five Outreach Coordinators (OCs). Formerly, the organization and implementation of campaign events, as well as key marketing efforts were assigned to anywhere from 120-150 individual Principal Combined Fundraising Organizations (PCFOs), responsible for promoting the campaign in 150 local campaigns across the country, in U.S. territories and overseas. OPM has stated that various complications stemmed from the delay of OC assignment and placement, to include insufficient time to plan, implement and achieve intended results, such as timely communication and coordination of charity fairs.
   • Charity Event Impact: America’s Charities saw this delay translate to a large shift in the timing of events, with the bulk of CFC events occurring in November and December rather than during the traditional timeframe of September-October. This proved problematic considering the lion’s share of events occurred so close to when employees were taking leave and out of the office around Thanksgiving, Christmas, and other holidays.
3. Delayed Pledge System and Charity Search Readiness
   • Online Giving Platform: The 2017 CFC launched on October 2, 2017, however the new online giving platform for the 2017 CFC was not ready until mid-October.
   • Charity Search: Even after the online giving platform was ready, the charity list was still not finalized, and there were a number of issues that had to be resolved with the online search function, such as allowing employees to search for charity names containing special characters like apostrophes (‘), dashes (-), and ampersands (&). We know that donors are frustrated when they cannot find the nonprofit they wish to donate to, and OPM has stated they are certain some of the flaws with the charity search function was a primary contributor to the pledge decrease in 2017.

Overall, there are a number of factors that contributed to the pledge decline in the 2017 CFC, all of which can be attributed either directly or indirectly to growing pains associated with implementing new technology and new administrative processes. However, shifting focus to the future – we know this campaign is ripe for opportunity for growth for the following reasons:

• New Processes are Now Final and In Place – The CFC was founded in 1961 and has undergone many changes throughout its 57 years, but arguably none of these changes have been as large in scale as those implemented for 2017, which was a pivotal year with the execution of new regulations. While we know the campaign will continue to adapt to changes moving forward, we have been assured that the same issues experienced at time of initial rollout in 2017 will not be repeated.
• Improved Communication Surrounding Retiree Giving – Despite the fact that retirees were not able to give through payroll deduction until mid-December, we saw pledges from retirees still account for roughly half a million dollars pledged in the 2017 CFC. This is very promising and is an area for potential growth. OPM has assured us they are working to standardize and improve retiree communication moving forward, and that efforts to encourage retiree giving will increase starting with the 2018 campaign to ensure greater retiree participation.
• Efforts to Increase Number of Participating Charities and Employee Participation Rate – These are already being put in place; in 2016, 19,000 charities were listed as a giving option in the CFC, and in 2017, 8,300 were listed. This decrease was due to multiple factors, one being charities opting to no longer participate due to the implementation of upfront fees.  This was actually an intended result since nearly 65% of the campaign’s prior nonprofit participants did not receive any pledges in the campaign. However, we have learned of another complicating factor, which is that many local federations chose to discontinue applying to the CFC on behalf of their member nonprofits. This accounted for a large number of former campaign participants being left without a “home”, with little time to learn how to apply to the CFC independently or to become a member charity elsewhere. Overall, less charities participated in the campaign than initially projected. OPM is already working with Outreach Coordinators, making an effort to get more nonprofits and employees to participate in the campaign moving forward.

THE BOTTOM LINE LOOKING AHEAD: We believe that we have already seen the worst and that the CFC will recover from its recent decline, but we know it will take time and it will require effort.

The time has come to shift focus towards the future of the CFC – ways that we can all work together to take action and help the CFC maintain its status as one of the most successful workplace giving campaigns in the world.  We’ve seen how overtly critical public perception can lead to self-fulfilling prophecy with the death of the Florida State Employees’ Charitable Campaign (FSECC), which at its peak generated nearly $5 million a year for nonprofits across the state.

At the end of the day, the CFC is still an extremely valuable source of revenue for over 8,000 charities nationwide, with major potential for growth, both in overall federal employee and retiree participation and pledges generated for nonprofits.

Starting right now, there are a number of ways that nonprofits can work to increase awareness and encourage giving through the CFC:

1. If you haven’t already, we encourage you to review some of the tips we presented at our annual Membership Assembly to engage and retain federal donors.
2. This June, our President & CEO will advocate on your behalf at a CFC Focus Group in Washington, DC, and we will continue to keep you apprised on developments as they progress. In the meantime, we will continue our advocacy efforts and work in partnership with campaign officials and other stakeholders on best practices to give this campaign what it deserves – a fighting chance.   

Should you have any questions, please contact us at ClientSolutions@charities.org. 

Thank you for all you do to make our world a better place.