Plan to Change Federal Government’s Charity Drive Draws Criticism

Government efforts to significantly change several key rules that govern the charity drive for federal workers are drawing mixed reviews, especially as officials seek to eliminate a restriction on the overhead expenses of charities.

The Combined Federal Campaign raises a significant sum: Last year it took in $268.5-million.

The U.S. Office of Personnel Management, which oversees the drive, said its proposals would streamline eligibility requirements and accountability standards “to reduce the burden” on charities and to simplify the administrative process that determines whether charities qualify for the campaign.

“At the time when the CFC was established in the 1960s, OPM filled a regulatory void by setting standards for evaluating the fiscal accountability and governance of charitable organizations,” the Office of Personnel Management said. “Today, this role is better served by the industry, its oversight organizations, and the Internal Revenue Service.”

The government added: “The changes proposed will put more responsibility on the donor to perform research on charitable organizations and to utilize industry oversight groups.”

However, a joint statement submitted to the government by managers of 10 Combined Federal Campaigns — that together raised 35 percent of all the money donated in last year’s drive — said that some of the proposed changes would “weaken some of the core historic strengths of the CFC program rather than bolstering accountability,” at a time when a smaller share of federal workers are making gifts to it.

The government plans to eliminate a requirement that nonprofit organizations soliciting money in the federal drive limit their overhead expenses to a specific percentage.

Federal rules currently say that these charities can spend no more than 25 percent of their total revenue on administrative and fund-raising expenses, unless the nonprofit groups can explain why their expenses are reasonable and submit formal plans to reduce them.

The Office of Personnel Management said removing the threshold was appropriate “because federal employees participating in the CFC should be knowledgeable donors and may consult a variety of publicly available reports and publications, many on the Internet, to learn about the administrative and fund-raising status of charities they are considering for their donations.”

Also, the government said, the annual brochure of eligible charities provided to federal donors will continue to state the overhead costs of each organization.

The joint statement from the managers of 10 Combined Federal Campaigns — including those of the Combined Federal Campaign of the National Capital Area, in Washington — urged the government to hold off on making the proposed change, which the statement said would “weaken the accountability which has long been a benchmark separating the CFC from other campaigns.”

Selling Contributor Lists

The Office of Personnel Management also proposes to drop a requirement that charities certify that their fund-raising practices prohibit the sale or lease of Combined Federal Campaign contributor lists, which is a rule that comes into play when federal donors authorize the release of their contact information to charities.

“OPM believes that once a donor authorizes the release of his or her contact information, the use of this information, including whether it may be sold or be subject to other commercial activity, is an issue between the donor and the charitable organization and not one that OPM can track or enforce,” the government said.

In their joint statement, the 10 Combined Federal Campaign managers said they opposed the proposal because it “would weaken assurances to potential contributors that their name and personal data will not be shared. Even if such certification is hard to police, CFC should not lower this threshold.”

Another rule that the Office of Personnel Management proposed to change requires local charities — those that work in fewer than 15 states — to undergo audits if their annual revenues are $100,000 or more.

The government’s proposal would raise the threshold to revenues of $250,000 or more in order, the government said, to “reduce unnecessary administrative burdens and expenses to otherwise financially accountable organizations with smaller budgets.”

A letter submitted to the government by Earth Share of Missouri, a federation of 34 local and statewide charities, praised the idea.

“A number of our organizations have sat out of the CFC for a few years because the organizations cannot justify the expense of an audit solely for CFC applications when none of their other funders require or request an audit,” the organization said.

The Office of Personnel Management’s proposed rules were published in the June 29 edition of the Federal Register and are available at http://www.gpoaccess. gov/fr.