CFC Changes Pushed Off A Year

July 22, 2015       Mark Hrywna      

New regulations for the Combined Federal Campaign (CFC) originally scheduled to take effect in January will be pushed back a year.

“The modernization of the CFC is reliant on an aggressive timeline for development of the tools needed to implement reform, including streamlined campaign administration and oversight as well as the development of new online applications and systems,” according to statement by the Office of Personnel Management (OPM). “The new effective date for the CFC regulations will ensure that the tools needed to put these reforms in place – including the pivotal online charity application and donor pledging systems – are thoroughly tested and fully operational before being made available to charities and donors.”

Federal employees participating in the workplace giving campaign contributed $193 million during 2014. It’s the fifth consecutive year that CFC contributions declined, down 7 percent from $209 million. Contributions are down almost $100 million — about one-third — from a record $282.6 million in 2009.

“We’re glad that they’ve finally come to the reality that the changes they’re proposing are not going to be easy to implement and if done poorly will have disastrous effects,” said Stephen Delfin, president and CEO of America’s Charities in Chantilly, Va. “It seems to me to be the perfect time to stop and revisit everything they’re doing, because they’ve gotten away from original mission of CFC-50, which was to revitalize the campaign,” he said.

New regulations came out of recommendations from the CFC-50 Commission in July 2012. Some changes were made after nearly 1,400 comments were received during the public comment period, which ended in June 2013. The new rules proposals were finalized in April 2014.

Though modest changes were made to the original proposals, United Way and others are “still just as concerned as we’ve ever have been,” said Steve Taylor, United Way Worldwide’s senior vice president of public policy. Since the rulemaking process ended, United Way has been focusing efforts on Congressional oversight committees to fix the changes as well as “to try to revitalize the CFC overall,” he said. “The delay is welcome because we’re hoping it will provide a little more time to try to repair the damage we think is going to be done.” Most organizations involved in CFCs, whether running a campaign or an individual charity, plan at least three years in advance, according to Taylor, so the new rules already have people planning.

The new regulations eliminate some 20 to 30 percent of funds raised because they won’t allow donations made without using technology, according to Delfin. New rules eliminate accepting cash and he believes checks eventually will be eliminated checks too. “It’s exactly the wrong strategy to take,” he said.

“We know they’ve changed the rules of engagement and simply want to make it more efficient, not revitalize campaign. It was already pretty efficient, outliers could be dealt with in very easy terms,” Delfin said, due to consolidating and regionalizing Principal Combined Fund Organizations (PCFO), centralizing that process. Historically, those PCFOs have been local United Ways, receiving and distributing funds.

“Funds are transferred electronically now, there are lots of ways technology can help with that. Long-term, that’s a good idea. The major role is how United Way promoted and marketed the campaign. Now, how that’s going to occur is unknown,” Delfin.

A drop of $100 million “isn’t just lack of employee engagement and morale but something inherently wrong,” Delfin said. He’s under the impression that OPM is more interested in simply applying technology and lessening the burden on OPM to manage the campaign. “Overreliance on technology from a cost perspective might make sense but from a fundraising perspective, it makes zero sense,” Delfin said.

Each of the approximately 160 CFCs has a federal employee board that has a Local Federal Coordinating Committee (LFCC) which contracts with a PCFO to run the campaign. In many cases, that’s a local United Way, which runs about half of the CFCs. The new rules separate the fundraising and process aspects of the CFC.

OPM hasn’t been able to find an organization that can fill the new centralized processing role envisioned under the new rules. Rather than having local CFCs mange local campaigns, there were to be several entities that OPM would contract with directly. A central processing agent has yet to be hired, which was expected by April after the contracting opprtunity was posted in December. Only one entity responded to OPM’s Request For Proposals (RFP), according to people familiar with the situation. An OPM spokesperson said the office could not comment on the ongoing procurement process.