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Overhaul plan worries CFC leaders

Feb. 3, 2013 - 11:10AM   |  
By SEAN REILLY   |   Comments

The Combined Federal Campaign stands to lose both charity participation and donations under a proposed revamp, CFC managers say.

Draft reforms proposed by the Office of Personnel Management would require charities to pay a yearly application fee to join the CFC campaign. The intent of that step, recommended last year by an advisory panel, is to end the practice of donors paying for most campaign overhead with money deducted from their pledges.

But the fee could lead many smaller charities to drop out, some CFC managers say. “I think it will change the CFC drastically,” said Gloria Peterson, resource development director for the East Alabama campaign.

The plan would also abolish the network of 184 local and state-based campaigns in favor of an unspecified smaller number of “regional coordinating committees” that could include Federal Executive Board members, area agency heads and employee union representatives. To Terri Belkin, campaign manager for the Gold Coast CFC in Southern California, the concern is that the face-to-face connection with donors would be lost.

“If you don’t have that personal touch, I can see donations going by the wayside,” she said.

OPM also wants all contributions to be electronic, with the goal of making the campaign more efficient by eliminating cash, check and money order contributions. Even though electronic giving saves about $14 per pledge, many people don’t have access to that option, said Scott Jackson, CEO of Global Impact, which ran the National Capital Area CFC during last year’s campaign.

“There will be issues that have to be addressed,” he said.

The proposed changes are outlined in a 53-page draft package of rules obtained late last month by Federal Times. Because the package is now under review by the Office of Management and Budget, OPM officials have declined to comment.

Budget office reviewers could demand revisions before clearing the plan for publication in the Federal Register; after that, the plan could undergo further changes in response to public feedback.

The proposed overhaul comes as the CFC — which bills itself as the world’s largest workplace charity drive — is imperiled by declining pledges and participation. Although full results for last fall’s campaign probably won’t be released for another several months, they are likely to be the lowest since 2006, based on numbers from individual campaigns surveyed by Federal Times.

Discussion of the campaign’s future is likely to dominate a three-day conference of CFC managers and volunteers scheduled for late this month in Atlanta. The conference, held annually with OPM’s approval, typically centers around training issues, but this year’s agenda devotes about a day to discussion of possible changes to the campaign.

Many of OPM’s proposed reforms mirror recommendations by the CFC-50 Commission, the advisory panel assembled to look at the campaign’s operations a half-century after its founding. But OPM went beyond the panel’s advice in proposing to eliminate the local federal coordinating committees and principal combined fund organizations that currently run individual campaigns.

Key details have yet to be fleshed out. OPM hasn’t said how many regional committees there would be or how it would set the charity application fee.

Such gaps are “disturbing,” said Marshall Strauss, CEO of the Workplace Giving Alliance, a group of a dozen national and local CFC federations. “Various elements of the program are being sketched out in the regulations and then the details for implementation are being left for down the road,” Strauss said.

But Strauss praised one part of OPM’s proposal, which he said could force nonprofit federations to be clearer about the fees they charge charities for marketing and back-office services. To recoup their costs, federations often deduct those fees from donors’ pledges before pledges get to their intended charities, according to a report released by the workplace alliance this month.

Many set the fees as a percentage of CFC pledges made to a given charity, often between 4 percent and 8 percent. A federation’s percentage cut could be higher if a federation charges a flat minimum fee. Those federation fees are in addition to the charges that charities pay out of their pledges to local CFC campaigns, which amount to 10 percent on average.

Although many federations “make a good-faith effort” to explain how fees are calculated, “it can be difficult to compare one price tag with another,” the report said. Under OPM’s plan, federations would likely have to bill charities directly, making comparison-shopping easier, Strauss said.

“I see that as good for the campaign and a good outcome for the charity.”

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