The Combined Federal Campaign’s new application and listing fees are leading many long-time CFC charities to evaluate whether it makes sense to be part of the CFC this year. But deciding to drop out is a deceptively difficult decision for many charities. Charities need to look at more than how much they raise in the CFC vs. how much they will have to pay in fees.
The fees themselves are the easy part of this decision. For most national CFC charities (with budgets over $1 million), the minimum cost to participate this year will be $2,840 ($570 application fee plus $2,270 listing fee). If your budget is less than $1 million (and more than $250,000), your minimum cost will be $1,125 ($570 application fee plus $555 listing fee).
For local charities, the minimum cost will be $975 (budget of $1 million or more), $475 (budget of $250,000 to $1 million) or $360 (under $250,000).
A third, “distribution” fee could also be charged, if the other two fees appear inadequate to cover the CFC’s costs. Importantly, this fee will be based on how much you raise in the CFC, and it will be a much lower percentage than in the past. Thus, if you’re only raising enough to be on the edge, this fee should not amount to much for your charity. But it does add uncertainty.
These are the minimum costs to participate as an independent organization. If you’ve been part of a CFC federation, then your minimum cost will be higher, because it includes the fee to your federation.
But you don’t have to be part of a federation to participate in the CFC. Indeed, other CFC changes will make it easier to participate as an independent charity.
If you raise less than your minimum cost, dropping out makes sense. If you raise a little more than these minimums, then it becomes a harder decision. There are many factors, not all of which are obvious.
There will be a lot less competition in the 2017 CFC. Half or more of the CFC’s current charities may drop out this year. We looked at one page from the Workplace Giving Alliance’s report on 2015 CFC donations to individual charities. Of these 50 charities, more than half (27) raised less than $5,000. Of these 27, three fourths were part of a federation. This means they pay an additional fee. As a result of many charities dropping out of the CFC, a lot of CFC donations will be redirected to the charities that stay.
There could be two million more potential CFC donors. Thanks to last fall’s executive order on the CFC, two million retirees will now be able to deduct donations to charities through the CFC, perhaps starting as early as this coming fall’s campaign. Many retirees have a long history of giving through the CFC.
The new fees are not the only big change in the CFC this year:
- Charities will no longer have a percentage deducted from their CFC gifts. If you raise $5,000, this will save you about $500.
- All donations will be processed and distributed centrally, with independent charities getting just one check rather than many (from individual CFCs). This means much less accounting for independent charities
- It will be much easier to apply to the CFC this year for most charities. You file a full application only once every three years. There is a 67% chance your charity will not need to file a full application this year. You won’t have to spend the time to document your services in 15 states to qualify as a national organization. To find out, simply log into the CFC website and input your CFC number. If you don’t have to file a full application this year, it’s a very easy process, mainly involving a lot of affirmations, plus submitting your 990 tax form.
- The campaigns will no longer be run by the people who knew they were being fired for the last three years – mainly the local United Ways. This is one reason many believe the CFC has kept going down despite no more shutdowns and sequesters. The new marketing people (and the CFC’s managers who made all these changes) will be very motivated to raise more money.
You can re-apply up until Friday, March 17 at 6 PM West Coast time. This is where you apply.