At least three nonprofit organizations can thank the Stuttering Foundation of America (SFA) for challenging the Office of Combined Federal Campaign Operations (OCFCO). As a result of SFA’s victory in court this past summer, the Roger L. Von Amelunxen Foundation in Ozone Park, N.Y., Chicago-based National Black United Front Education Fund, and The Impact Movement in Orlando, Fla. all were eventually accepted into the 2007 Combined Federal Campaign (CFC).
Last year, the federal employee workplace giving program raised $271 million for the enrolled charities. There’s no telling how many charities will be able to tap into revenue because of the court decision.
OCFCO had denied the Stuttering Foundation entry into the 2007 campaign, along with the other groups, despite having been in the previous year’s CFC. In an attempt to clarify CFC regulations, revisions in November 2006 explicitly stated that an organization must be classified as a public charity by the Internal Revenue Service (IRS). The Stuttering Foundation unsuccessfully appealed its initial denial in March and filed suit by July. A judge ruled in August that the revisions to CFC requirements were not a mere clarification of existing rules but a new requirement not consistent under the 1984 regulations.
Jane Fraser, president of the Memphis, Tenn.-based foundation, described the litigation with the OCFCO as a win-win situation. Not only did the organization get back into the Combined Federal Campaign for 2007, the lawsuit raised awareness and understanding of private operating foundations and what they do.
“It was very distressing to us that we had to spend” any money on litigation rather than on helping people who stutter, said Fraser, declining to provide a figure or estimate of legal fees. Because of the impact of her actions on CFC regulations and the charities in the system, Fraser is the 2007 NPT Executive Of The Year.
Though SFA was the only one of the charities to pay legal fees, Fraser said the president of the Roger L. Von Amelunxen Foundation, Karen Donnelly, “gave us a substantial personal contribution just for standing on principle.”
The Von Amelunxen Foundation, which supports families of border patrol agents killed in the line of duty, was initially rejected because its financial statements were presented on a cash-basis format. The CFC requires financial statements be presented on an accrual basis. The foundation received a record $344,000 in last year’s CFC.
“Hopefully everyone’s been educated on what private operating foundations are, that they do wonderful work, but just have a problem with having an endowment,” Fraser said.
Operating foundations operate just like a nonprofit and meet rigid requirements, Fraser said, yet there are only about 5,000 of them in the U.S., among the nearly 2 million nonprofits. They may be classified as private foundations and file the corresponding Form 990 PF, but private operating foundations are not bound by the requirement to distribute 5 percent of the assets each year, a figure SFA expects to surpass this year.
With an operating budget of $1.2 million last year, the foundation’s pocketbook would not have been hampered that much had it not received the $40,000 raised in the previous year’s CFC.
Fraser took issue not with the potential monetary loss but with the impression that not being in the CFC might leave with people. “People automatically think you’ve done something wrong” when denied application into the CFC listing. “That concerns us the most,” Fraser said. “When you say it’s because we’re a private operating foundation, their eyes glaze over.”
Since joining the CFC in 1992, the foundation has raised more than $310,000 through the campaign, most of it as a member of the Health and Medical Research Charities of America, which it joined in 1993.
“It’s going to be a really interesting year for us to see how we do as an independent,” said Fraser, who already has applied to get back into the federation for the next campaign.
The CFC campaign solicits federal employees from September to mid-December. Results of the campaign generally are not known until February or March, Fraser said, but the organization already has written to donors to remind them of the group’s new CFC number.
“What we’re hoping is to serve the purpose and educate anyone about private operating foundations,” Fraser said, as well as the Hoyer-Hatfield Act.
The Hoyer-Hatfield Act of 1987 stipulates that the eligibility and public accountability standards remain similar and consistent to those that were in effect in 1984, so a nonprofit cannot be excluded unless it no longer meets the qualifications. “The obvious reason for that act is if you’re on the far left, should you shut out charities on the far right, or vice versa, or anywhere in between? The answer is no. That’s the great part about being American. The field is supposed to be open, whether you believe one way, you can’t be shut out,” Fraser said.
The foundation’s endowment can be a drawback in a way because it provides 50 percent of the charity’s annual expenditures, Fraser said, although at the same time donors know their money is going toward program expenses rather than overhead. “It’s just a technicality then that we don’t qualify as a public charity,” Fraser said. Another reason SFA would not qualify is that one donor cannot exceed 2 percent of a charity’s contributions.
Fraser’s own personal gifts to SFA far exceed that level, having contributed some $87,000 of the organization’s $450,000 total public support (almost 20 percent), according to the organization’s most recent Form 990. As SFA president, Fraser’s salary was about $64,000.
“That’s what you want to see: if someone’s committed to a charity, working with you and for you,” Fraser said. “I’m not talking about ordinary employees, but if members of the board expect them to some way really contribute,” Fraser said. “It sets the tone, it sets an example.”
Jane Fraser might have gotten that trait from her father, Malcolm Fraser, who started the foundation (then known as the Speech Foundation of America) in December 1947 with a $2,500 donation of his own. To put that in perspective, in 1947 dollars a new Ford automobile cost $1,000. “It wouldn’t be so extraordinary except that we had one car for the family,” Fraser said. “He was not Bill Gates, he was living a very modest life. It represented a huge commitment. He wasÉjust starting his family. It’s not like we were all grown up.”
Fraser said her father was giving very substantial donations to the organization when he was still alive, sometimes more than $100,000 annually. The charity also receives annual support from Genuine Parts Company, a majority owner of NAPA Auto Parts, where her father worked for many years. He started the foundation with a cash contribution but over the years routinely donated stock. The foundation still has more than 50 percent of its endowment in shares of Genuine Parts Company.
Fraser has been president of SFA since 1982 and has been involved with the charity for many years. She was just a teenager when she attended one of the Stuttering Foundation of America’s early conferences in 1957, gathering scientists from around the nation in Delray Beach, Fla.
A graduate of Bryn Mawr College, Fraser earned a degree in Russian and linguistics before moving to France to work as an interpreter. When her father turned 80, she realized she should come back to run the foundation, otherwise it might dissolve, something she couldn’t bear to see after all her father’s work.
Malcolm Fraser’s overriding goal was to develop basic guidelines that people could follow to help them with their speech. Eventually, SFA developed a 32-page booklet of guidelines that adults who stutter could follow. “He wanted to help people who stutter, not necessarily out 50 years, but tomorrow. He always tried to focus on that.”
Fraser said those who are helped by SFA usually become long-time donors, not just one time but for many years.
Education, research and training
SFA’s largest expenditure is in the creation, publication and shipping of educational material. While trying to stay focused on the basics of helping parents deal with a 2-year-old who stutters, for instance, SFA also has been funding scientific research to address stuttering as well as treatment programs.
A pool of almost 1,000 therapists have been trained by SFA to give effective therapy in schools, Fraser said, which is the only place they can get therapy for free.
SFA also has become involved in treatment programs, supporting direct treatment at the Palin Centre in London, Fraser said. “I think they have the best treatment in the whole world,” she said, adding that one person they sent for training returned to run the department at Children’s Hospital of Philadelphia.
Fraser is hoping to establish a hands-on treatment program in the U.S. “Early intervention, we now know, can prevent the problem.” NPT