One of the biggest changes in the 2017 Combined Federal Campaign involved the application process. Most of the changes will help CFC charities.
Charities that are already part of the CFC will only have to do a full application once every three years. In the other two years, they submit a “verification application,” which is much simpler.
If your charity is new to the CFC, you must file a complete application your first year, then you won’t have to file another full application for three years.
For national charities, the biggest positive is that they will only have to document their services and benefits in 15 states once every three years, not every year. This was always the most difficult part of the CFC application (“Attachment A”). Similarly, local and international charities will only have to describe their services once every three years.
A “verification application” involves certifying several statements about your organization’s activities and management, as well as submitting your IRS 990 report and audit (if your budget exceeds $250,000). If your charity doesn’t file a 990 report, you can file a “pro forma” report that simply involves filling in and submitting certain sections of the 990 form.
Starting in 2017, you must apply online. You no longer must arrange to have your application delivered before 5 pm on deadline day. Now you have until 11:59 PM to finalize your online application. The 2019 deadline for all CFC charities (local and national) is January 31. If you are applying through a CFC federation such as EarthShare or United Way, your deadline will be earlier.
You start the application process by logging in with your Employer Identification Number. If your charity has ever been part of the CFC, you should be in the CFC’s database. You can log in as the “owner” or as an “editor,” allowing several people to work on your application. (When you go back to finish or edit your application, after you log in, you click on "View Details" of your application, then "Edit Application." You don't click on the first two "Edit" links you'll see.)
You will fill in basic information, such as your charity’s name and address and whether your service area is local, national or international. Your charity cannot have a post office box address (unless it is a domestic violence shelter). This includes UPS Store or MailBoxes’ addresses (they can tell). This is one way of ensuring that a charity is actually operating. To be eligible, a charity must have a dedicated phone line.
You then certify that your charity is a “health and welfare” organization. “Health and welfare” is broadly defined. An arts organization, for example, is assumed to have an impact on people’s welfare. If your charity is an IRS recognized 501(c)(3) organization, you can check this box.
The next step is the hardest: “Areas of Service." But you only have to document your services once every three years. If this is your year, here's our advice about describing your services.
You then indicate your exemption status. Your charity can be a separate entity. It can be a chapter or affiliate of another organization (such as a chapter of a national health charity) that does not have its own EIN number. Or it can be part of a group exemption – you are connected to another organization but you have your own EIN.
Nest you indicate the range of your annual revenue (this determines the “listing” fees you will pay), then upload your most recent 990 report. Your 990 must be for the fiscal year that ended 18 months prior to the beginning of the year for which you are applying. So if you're applying for the 2018 CFC, your 990 must be for a period that ended in June 2016 or later.
If you don’t file a 990 (perhaps because you’re a religious organization or because you’re so small you file instead a 990EZ form), you do a “pro forma” 990. You simply download the 990 form from the IRS website and fill in the sections that the CFC reviews. These sections are listed under "Step Instructions," which you'll find on the same webpage.
You no longer must submit your IRS determination letter unless your charity is not in the IRS’s Business Master File. If it isn’t, then you must submit an IRS affirmation letter. This will be rare, happening mainly if your charity is new or if there is an error in the master file. The application system will tell you if it found your charity in the Master File.
You then determine the percentage you spend on administration and fund-raising. The formula is simple and unchangeable: from your 990 report, you add your Management and General Expenses (Line 25, Column C) to your Fundraising Expenses (Line 25, Column D) and divide this sum by your Total Revenue (Line 12, Column A).
The next step is to list your “trustees” or board members (not “officers,” who are staff). You note the number of voting members of your board, which should be the same as the number of trustees/board members. The CFC says you can have more trustees than voting members, but not more voters than trustees (which would suggest that people besides trustees – perhaps staff members -- control the charity’s decisions).
Finally, you verify four statements about your organization, such as your charity "effectively uses the funds contributed for its announced purposes." The application must be electronically signed by the person who is authorized by the organization to sign off on applications or proposals. Then you pay the application fee, which can only be paid by credit card (it doesn’t matter whose card). The “listing fee” is not paid until your charity is accepted.
Here is the 2018 application completeness checklist. The checklist doesn't usually change from year to year.
The CFC will notify you in a month or two if you've been accepted. If not, the CFC's letter will explain the appeal process. If you are accepted, it will come with an invoice for paying your "listing fee." For more on the fees and other CFC changes that began in 2017, see our article on those changes.