Charity Choices

A Resource for Donors

Big Changes in the Federal Charity Drive Start This Year

For the Combined Federal Campaign, 2017 is the year of change -- major changes first proposed in 2013 and finalized in 2014 will finally be implemented.  These include:

  • A new, simplified online application process.
  • New, upfront fees for CFC charities.
  • A new way to process donations. 
  • A new way to run the campaign.
  • And, possibly this year, two million new donors. 

And if all that wasn’t enough, there is a new administration that will be impacting many if not most of the CFC’s donors. 

Over the next few weeks, we’ll be writing about all these changes and what they could mean for your charity.

The most immediate change involves the application process.

For the first time, you must apply online.  You must pay an upfront application fee.  You must submit your application by Feb. 28, whether you’re a national/international or local charity.  (The deadline had been Jan. 31, but the CFC office delayed it a month as it works to inform and train CFC charities.)

The new application process is meant to simplify the process for charities and lower the cost of reviewing thousands of applications.  There is clearly a learning curve as charities go through the process for the first time and as the CFC fixes the inevitable bugs, hence the delay in the application deadline.

But the new system will definitely be simpler this year for most CFC charities -- only one in three will have to do a full application.  The new rules require a full application once every three years, not every year, a big change.  In the other two years, charities will only have to submit “pro-forma” applications. 

How will you know?  You learn by logging onto the CFC application page.  The system will tell you.  Charities that must do a full application this year were chosen randomly.  All charities that were not in the 2016 CFC will have to submit a full application. 

The CFC office has been offering in person and online trainings about the new application process and the CFC’s other changes.  We were at the first training and will be reporting on what CFC staff said.

A new way to pay for the CFC

In the past, the CFC's costs were covered by a percentage deducted from each charity's CFC donations.  The more you raised the more you paid.  Now the costs will be paid by fees paid by all CFC charities.  The fees depend on whether your charity is local or national/international, a federation member or independent, and your total revenue (not on how much you raise in the CFC).

There is a fee for applying to the CFC and, if accepted, a fee for being listed in the CFC catalogs and website.  Charities only pay the non-refundable application fee up front.  The listing fee is payable after your charity has been accepted. 

It’s possible a third, “distribution” fee will be charged, "assessed against pledges received," according to the CFC's memo on the new fees.  That fee appears to depend on how much money is collected from the first two fees and how much the CFC’s costs go down because of the big changes in how campaigns are run and donations are processed.The CFC's memo says the the changes "will enable donors to save millions in costs...."

APPLICATION FEES (Paid when you submit an application)

            Nat’l/Int’l Federation -- $1575

            Nat’l/Int’l Federation Member Org. -- $400

            Nat’l/Int’l Unaffiliated Org. -- $570

            Local Federation -- $630

            Local Federation Member Org. -- $255

            Local Unaffiliated Org. -- $340

LISTING FEES (Paid after you've been accepted)

            Tier I Nat’l/Int’l Org. -- $2,270

            Tier II Nat’l/Int’l Org. -- $555

            Tier III Nat’l/Int’l Org. -- $370

            Tier I Local Org. -- $635

            Tier II Local Org. -- $135

            Tier III Local Org. -- $20

Most CFC charities will be in Tier 1 – total revenue over $1 million a year.  Tier 2 organizations have revenue between $250,000 and $1 million.  Tier 3 organizations raise less than $250,000. 

The lower fees are meant to allow very small charities to be part of the CFC.  Initially it wasn’t clear that there would be tiered fees.  However, the $340 upfront application fee will probably be too much for many small local charities.

“Unaffiliated” charities pay more than charities in a federation.  However, federation charities have to pay a separate fee to support their federations’ services (such as reviewing and passing judgment on their charities’ applications).

Why this new fee system?  The CFC memo says that paying fees upfront will "increase transparency [for donors] and predictability [for charities]." It will also allow the CFC to tell donors that no part of their donations will pay for running the CFC. CFC staff believe this will cause more people to give through the CFC. 

A new way to process the donations

In the past, the local charities that ran the local CFC campaigns (at one time there were more than 300 campaigns) also collected the money and disbursed it to CFC federations or individual charities.  Starting this year, a Central Campaign Administrator will collect and process the money.  The hope is that this centralized process will greatly lower the CFC’s costs.  It will also give charities the chance to see how much money has been pledged to them. 

A relatively new nonprofit organization called Give Back Foundation has been in charge of developing this payment processing system, as well as creating an engaging “portal” for employees to give to the CFC.

A new way to run the campaigns

In the past, local campaigns were run by local CFC “federations,” in most cases local United Ways.  This all changes this year.  There will now be “Outreach Coordinators” who will manage the campaigns.  And there will be many fewer campaigns.  In 2015 there were 137.  This year there will be 37 regions.

This change from local charities running local CFC campaigns to regional “outreach coordinators” was probably the most controversial change when it was proposed in 2013.  More than 90% of CFC charities opposed it, saying that charity campaigns need to be run by local charities that understand how to raise money locally and that are on the ground, directly reaching out to potential donors.

The CFC didn’t relent on this change, and this year will be the first test for this new approach.  But many CFC charities and federations are glad this change is finally happening after local CFCs have been run for three years by the organizations that are being phased out.  Some think this is one reason the CFC has gone down so much during the past three years. 

The new CFC will rely heavily on "drastically expanding access" to its new online donation portal.  The Give Back Foundation's Stephen Paletta, which is developing this portal, says it will do much more than simply give employees a way to make an online pledge.  "It will make people feel special about who they are.  They'll talk about it to their colleagues and friends.  That's how you get people to participate." The CFC thinks this and other changes will increase the number of donors this year.  The CFC has lost more than a half million donors during the past five years.

A new influx of potential CFC donors

One way to counter the decline in CFC donors is to solicit many more potential donors.  That is what the CFC plans to do, the result of an Executive Order signed by President Obama on Oct. 13, 2016.  That order authorizes federal retirees to participate in the CFC, with donations being deducted from their monthly annuity payments.  This will open up the CFC to two million potential donors, many of whom gave through the CFC for years when they were federal employees or members of the military.  The Executive Order also allows the CFC to allow federal employees to volunteer for CFC charities as a way of making a CFC donation. Their contributions of time will be "monetized" and included in the CFC's overall giving total.

Anthony Decristofaro, who ran the DC CFC for many years and is now Volunteer Campaign Manager for the Department of Defense, says the Executive Order's changes "amount to a 'game changer' for the CFC and its stakeholders." 

The CFC can start soliciting retirees in September.  Whether the CFC will be ready to do so by then is uncertain.