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OPM helps keep CFC costs low

Dec. 13, 2009 - 06:00AM   |  
By MARK LAMBERT   |   Comments

In response to the Dec. 7 article titled "Small CFC campaigns plagued by excessive operating costs," please be reassured that the Office of Personnel Management does monitor the costs to administer each of the local campaigns to ensure that as much money as possible goes to the designated charities, rather than toward operating costs.

As the article mentioned, the national average to run the Combined Federal Campaign is very low, at 10.5 percent of the amounts donated, and that figure compares favorably to private-sector campaigns similar to CFC, which averaged 14 percent last year. OPM is very proud of the efficiency and effectiveness demonstrated by our local campaigns and will continue to support them in keeping administrative costs as low as possible.

One significant way to exercise OPM's oversight responsibility is through audits of campaign operating costs. First and foremost, audits assure the donor that his contribution is being handled in accordance with his desires i.e., that money is being accurately received, processed and paid out to the charities designated.

In addition, audits inform OPM of whether a campaign is complying with regulations and guidance and whether there might be a risk of fraud, waste or abuse at the local campaign. As mentioned in the article, for smaller campaigns the audit cost may represent a higher percentage of their costs based on the amounts raised. However, in setting audit requirements, OPM does consider the size of the campaign. Larger campaigns are subject to more detailed audits than smaller ones. Moreover, OPM does not believe that removing the audit as an annual requirement is in the best interest of its donors or the charities that participate in the CFC.

Additionally, there are several ways that local campaigns can reduce administrative costs. Campaigns can and should shop around for an auditor. Regional and local audit firms or certified public accountants may be less costly than national audit firms. Campaigns should check with neighboring campaigns to see what they are paying for audits and, if less, contact that auditor to negotiate an audit for the same price. Local campaigns should ask about whether the auditor will perform the audit pro bono or for a reduced price, as many are looking for tax deductions.

OPM also encourages local campaigns to look at their costs and find ways to collaborate with other campaigns to the extent possible to lower costs. Coordinating with a neighboring campaign to order materials in bulk can cost much less than ordering materials individually.

The article mentioned that OPM requires "campaigns to print new pledge forms each year, meaning last year's overstock gets trashed." However, this is simply not true. The requirements are for the donor to annually elect to participate in the CFC by designating to which charity he wants his money to go to or to make an undesignated contribution to be shared among all charities receiving contributions. Traditionally, this is done manually by completing a printed pledge form. However, campaigns are encouraged to implement online listings and contribution methods, which can greatly reduce the need to print not only pledge forms, but also the charity lists for distribution to donors. Additionally, donors may contribute by payroll deduction, which is another way campaigns can reduce administrative costs.

As a last resort, if a campaign is not generating enough contributions to keep its administrative costs at a low percentage, OPM can always consider merging that campaign with another more efficient campaign. Sometimes, this is the best option for meeting our goal of keeping costs as low as possible.

The bottom line for all of our local campaigns is to raise as much money as possible for distribution to the participating charities. OPM will continue to do everything possible to work with all of the campaigns to assist with meeting this goal, while maintaining transparency and accountability to our donors.

Mark Lambert is director of the Combined Federal Campaign at the Office of Personnel Management.

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