CFC 50 Commission Meeting San Antonio, Texas March 2, 2012

2. CFC 50 Commission MeetingSan Antonio, TexasMarch 2, 2012

3. GOLD STANDARD OF WORKPLACE GIVING ACCOUNTABILITY • Determine the transparency needs of donors and charities • What, if any, federal (or other) regulatory restrictions are there on CFC’s ability to share information publicly? • Determine what criteria are used to inform decisions on whether or not to include a charity in the CFC (eligibility) • Evaluate audit requirement for smaller local charities • Improve the governance structures of federations • Change the annual application requirement to one that is less frequent but with required supplemental submissions • LOCAL CAMPAIGN STRUCTURE • Develop required training for LFCC members • Improve the process for releasing donor information to participating charities • Establish a pre-emptive voluntary fundraising disaster relief program • Extend solicitation period to January 15 • Reduce costs by “Going Green" CFC Commission Preliminary Recommendations

4. ENHANCING THE DONOR EXPERIENCE • Allow new hires to make CFC pledges immediately • Clarify and explain the costs and benefits of the CFC to donors • Increase access to federal retirees, contractors, National Guardsmen and Reservists by removing solicitation prohibition and offer credit/debit and/or allotment contributions (retirees only) • STREAMLINED CAMPAIGN INFRASTRUCTURE • Increase effectiveness of payroll office reporting • Create one national CFC website that include one online giving system for payroll allotments and credit/debit cards, lists all national and local charities, with one search function • Create a 'universal giving' structure to permit donors to contribute to organizations participating in other campaign regions • Increase the value proposition of the campaign for donors • Create a national CFC Receipts and Distribution Center to process contributions CFC Commission Preliminary Recommendations

5. Determine the transparency needs of donors and charities • Solicit feedback from federal employees—both participants and non-participants in CFC to obtain data on how to increase participation, enhance their donor experience, and determine their needs for transparency and other requirements. Determine the transparency needs of donors and charities with surveys or focus groups. Focus areas could include: • Awareness and Perception of CFC • Motivators to participate in CFC • Barriers/de-motivators to participate • What aspects of transparency are most/least important to the respondent • What steps could OPM and agencies take to improve participation • For participants, likes/dislikes about the “CFC experience” from initial solicitation through donation • What types of accountability information do donors want from charities to help inform their donation decisions? • Reactions to efforts being considered by the CFC as result of CFC 50 Commission recommendations. • Critical question as indicator of support for CFC: Would you recommend participation in the CFC to a fellow federal employee? If not, why not. Gold Standard of Workplace Giving

6. Determine the transparency needs of donors and charities • Various data collection methods could be used to obtain information. • Regardless of the approach, an ongoing working should be organized by OPM (with wide federal department representation) to oversee periodic surveying and focus groups and other forms of feedback. • Working group would be charged with taking the feedback received and making modifications to CFC efforts going forward. • Performance goals based on the data should also be considered (e.g. increasing participation rates by a certain amount each year and strategies for doing so). • Sample Survey • The strengths and challenges of two key approaches, sample surveys and focus groups, are discussed below. • Strengths: • Results can be generalized to a larger population • Can cover a broad range of topics • . Gold Standard of Workplace Giving

7. Determine the transparency needs of donors and charities • Strengths (continued): • A simple random sample generalizable to the federal workforce would be relatively doable; however, if we want to project results to specific demographic or other groups, this would require a stratified sample which could get unwieldy from a survey management and analysis perspective. • The survey instrument—a questionnaire with multiple choice, check all that apply, scaled response questions (e.g. likert scale: ex. strongly disagree to strongly agree, etc). would be relatively easy to develop. Screener questions could be used to distinguish people who have participated in CFC from those who haven’t, with separate lines of inquiry for each. • Overall, very efficient and cost-effective way to obtain data from large numbers of people, especially on a cost-per respondent basis. • Data capture and analysis is relatively efficient. Gold Standard of Workplace Giving

8. Determine the transparency needs of donors and charities • Challenges: • Contact strategy could be a challenge. • No centralized list of current email or postal addresses for federal employees; would need to be obtained agency by agency. Possible workarounds could include limiting the survey to certain federal agencies (a few federal agencies account for a large share of total federal employees). Alternatively, if we wanted to limit the survey only to survey participants, we could use contact information available from CFC, although this would preclude obtaining information from the population of greatest interest—non-participants. • Time consuming from start to finish. For example, proper quality control to ensure potential respondents understand the survey questions, have same set of assumptions, etc. would require pretests and expert review. • Follow-up with non-respondents and other QA procedures would add time at the back end. Gold Standard of Workplace Giving

9. Determine the transparency needs of donors and charities • Focus Groups • Strengths: • Elicits deeply held perceptions • Versatile • Can be organized more quickly compared to surveys • Challenges: • Results can’t be generalized • Expensive to conduct on a per participant basis • Labor intensive; many sessions would be needed to capture the diversity of federal employees. • Data capture and analysis is very labor-intensive • Additional Options: • Use administrative records (e.g. match a sample of records of CFC donors with OPM data from the central personnel data file) to obtain demographic profile of CFC participants. This would help shed light on population groups where additional outreach could be needed. • If not already part of the process, include a small number of feedback questions on the paper donation forms or on the CFC website. Gold Standard of Workplace Giving

10. Determine what criteria are used to include a charity in the CFC • There are charities that exist solely for their ability to raise funds through the CFC, or have questionable fundraising, or management practices, or are controversial in nature. • There are charities that use alternate trade names (“doing business as”) in an effort to increase fundraising that are misleading to the true mission and services of the charity. • Recommendation • The CFC can substantially expand the availability of information regarding participating charities and in so doing significantly strengthen the ability of donors to assess groups before they pledge. • As PCFOs and donors rapidly move toward web based search and pledging, the on-line world offers the CFC the opportunity to provide far more information about individual charities. • On-line searches allow donors to dig into the background of charities through a web based system Gold Standard of Workplace Giving

11. Determine what criteria are used to include a charity in the CFC • Recommendation (continued) • Some examples that would flow from the ability of donors to dig into the background of charities through a web based system: • Information is now becoming available that can show how much of an organization’s revenue is derived from the CFC. This information could be placed on a CFC website, available to donors who would like to learn more about groups they might support. In this manner, donors can decide whether they wish to support groups that have little or no non-CFC support. • Information can be made available that will tell donors how often individual charities have employed DBAs. The CFC can provide the DBAs or just a summary of the number of DBAs that have been used over the last five or 10 years. Gold Standard of Workplace Giving

12. Determine what criteria are used to include a charity in the CFC • Recommendation (continued) • Organizations are required to describe their work on the second page of the Form 990. These descriptions can be made available to donors who can then compare what is presented by groups in the CFC directory (or website) to what is stated in the 990. •  A web based approach to the sharing of information might also allow the CFC to involve third party reviewers of charities. • Providing links to such outside parties may be an easy way to draw on their expertise. • OPM could consider capping the CFC funds that one CFC charity can transfer to another CFC charity. This cap would be all the more appropriate if the two groups are related. The purpose of such a restriction would be to make it harder for groups to create for themselves multiple CFC identities – when only one group is actually delivering programming or services. • OPM could consider publishing in the CFC catalog the number of years a CFC charity has been in operation. • OPM consider creating a further study group to identify other approaches that might be used to resist the creation of such splinter groups Gold Standard of Workplace Giving

13. Evaluate audit requirements for smaller local charities • Audited financial statements for smaller local charities are disproportionately burdensome. • Recommendation • OPM could consider the following two options: • Option 1 – Consider revising the audit policy, creating three tiers: • For groups with revenue less than $100,000, there would be no change from current CFC rules – i.e. no audit or review. • For groups with revenue at or above $100,000 and below $250,000, the CFC would require that applicants provide a review of their most recently completed fiscal year. • For groups with revenue at or above $250,000, the CFC would require that applicants provide a copy of their most recent GAAS GAAP audit. • Option 2 – OPM should determine the dollar thresholds based on parallel common practice at the state government level. Gold Standard of Workplace Giving

14. Improve the governance structure of federations • Recommendation • Current CFC regulations and guidance should be strengthened. Areas could include but are not limited to the following: • Limit administrative fees charged by federations. There should be a limit to the additional fees (e.g. 5%) that can be charged by federations to their member charities. There should be full disclosure to potential donors of the total fees that will be deducted from donations.  • Establish clear requirements as to the timing of distributions by federations to their members (e.g. within 30 days of receipt or at minimum quarterly).  • Require federations maintain proper evidence of disbursement of CFC funds. Federation often make large distributions which includes monies from many different charity drives.  Records do not clearly identify CFC funds nor reconcile as receipts are commingled with other charity drives. • Strengthen regulations and guidance on potential conflicts of interest where federation members serve on the federation’s board and make eligibility decisions or federations reviewing/certifying their members’ eligibility. Gold Standard of Workplace Giving

15. Change frequency of annual application requirement • Recommendation • OPM could consider the following two options: • Option 1 – Change to a three year paper or soft copy submission (short term): • Requires charities submit a full package in year 1 (independents/federations)  • Intervening two years, submit following: • Mini application; similar to filling out front page of current application • Attachment A, update (national/international update current year) • Attachment C, update current auditor’s opinion page • Attachment D, pro forma Form 990 (Pgs 1, 7, 9, 10 & 12) • Attachment E, update 25-word statement • When to file submission is based on: • Based upon block of 5-digit codes published in annual OPM calendar. • Local campaigns sort their lists by 5-digit codes and notify agencies. • Agency submitting for the first time, submit full application; and submit by 5-digit code block subsequently (in some cases, agency may have to submit back-to-back applications) Gold Standard of Workplace Giving

16. Change frequency of annual application requirement • Recommendation • Option 1 – Change to a three year submission (continued) • How to submit (full app or mini): • No change. Independents directly; Federations screen members and submit according to current rules. • Paper, or campaign with resources may implement soft-copy submission • Pros: • Saves resources and time • Less burdensome on charities and reviewers • A faster, more efficient process may improve speed in which notifications sent • Cons: • Initial confusion about when to submit • Reviewer organization may incur printing cost for soft-copy submission • Possible uneven distribution of agencies in the blocks of codes Gold Standard of Workplace Giving

17. Change frequency of annual application requirement • Recommendation • Option 2 – Online application process (long term): • Use marketplace competition and ingenuity (through OPM issued RFP) to create an online application process available to campaigns on a sliding-cost scale. • Basic outline of the system • PCFO (or OPM) is the Administrator • Provide access to agencies thru log-in and password • Agencies update files and records annually during the application window using softcopy input in PDF, Word, Excel, etc. • Reviewers access the system thru password from Administrator, review and comment on agency application. • Notifications made thru the system’s communications module. • Purchase of system • OPM purchase and Administer (i.e., accesses, etc) similar to current validation process. • Alternatively, OPM gives its approval to “winning” Gold Standard of Workplace Giving

18. Change frequency of annual application requirement • Recommendation • Option 2 – Online application process (continued) • Pros: • Completely automated and web-based system • Sliding scale cost benefits large and small CFCs • Culture and process change at OPM (ie., OPM currently does not “endorse” anything) • Saves resources and time • In long run, much less burdensome on charities and reviewers • Process will speed review process and notification process to agencies • Efficiency can eliminate the “federation” structure; or alternatively can improve their screening responsibilities as well. • Multi-year or single-year submission cycle not an issue. A fully-automated system is flexible and nimble. • Cons: • A definite learning curve moving from paper to online • Cost, even on a sliding scale, may be prohibitive to some campaign campaigns Gold Standard of Workplace Giving

19. Develop required training for LFCCs • Training directly impacts the performance of the LFCC. • Adequate and uniform training materials should be available – and easily accessible – to the LFCC. • Training materials on OPM’s CFC website should be current and accurate. • The extent and type of training required by the LFCC should be specified – currently, the requirement is that the LFCC “should develop an understanding of campaign regulations and procedures.” 5 CFR 950.104. • LFCC’s requirement, if any, to train its employees, volunteers, and keyworkers should be specified. Local Campaign Structure

20. Improve process to release donor information to charities • Recommendation • Review and revise pledge form to better educate donors on the benefits of releasing data • Whether the release of information is opt-in or opt-out, the pledge form should include language giving donors confidence that sharing of their information will be limited. For example, revise title of section D to include, “Share my information with the selected charity(ies) in the following ways.” • Advise the donor that the charities are limited in their use of donor information and are prohibited from selling or leasing their information. • Survey charities a year following the edits to the pledge form to see if the number of donors releasing information has increased. • Determine if current regulations require campaigns to wait until the campaign season closes before providing charities with donor information. If not, explore how charities can be provided donor information once the information hits the system – especially for online donations? • Review and update regulations to require donor information be released “x” days after close of solicitation period Local Campaign Structure

21. Improve process to release donor information to charities • Recommendation (continued) • Establish a uniform process by which PCFOs are to notify charities of donor information • Poll charities to see what type of communication they have with a federal donor after receiving his/her donor information. • Do they send a “thank you for your donation” letter? • Do they provide additional information about the charity? • Do they inform them of other charitable events their organization is holding through out the year? The expectation is that charities that send their donor a “thank you” letter or some other communication during the year will result in a donor’s repeat participation in the CFC the following year. Local Campaign Structure

22. Establish a pre-emptive voluntary disaster relief program • Recommendation • Establishing relationships with known NGOs for immediate relief (e.g. Red Cross) • Once an emergency disaster relief effort is launched, a predetermined organization or group of organizations is identified as authorized to accept donations. • Pro: • Donations flow immediately to where they are needed by those organizations guaranteed to provide relief. • Con: • Immediate cadre of organizations could be limited, others could be added as relief efforts are identified however the bulk of funds in these cases are pledged within the first 72 hours. Local Campaign Structure

23. Establish a pre-emptive voluntary disaster relief program • Recommendation (continued) • Establishing a CFC, 5 digit Disaster Relief code as an option from the National listing. • This could be open during the campaign as an option for all in the event of a disaster as a fund waiting for disbursement or it could be opened and only utilized during a disaster relief effort for distribution to organizations providing immediate disaster relief. • Pro: • Easily recognizable way to donate in either situation and for campaigns to track results • Con: • Determinations on what organizations get funds and in what proportion may be contested • Donations made in year 1 and not disbursed until out years may have tax and audit rule implications Local Campaign Structure

24. Local Campaign Structure • Reduce costs by “going green” • Ensure all PCFOs have online access for donor giving. • Standardized training for all PCFOs for online giving. • Set a goal for increased online giving (e.g. increase donor participation in online giving by 20% in the first year). • Design and utilize smartphone apps that help donors find out information about participating charities. • Compare savings with FEHB’s efforts to go green.

25. Enhancing the Donor Experience • Increase access to federal retirees – Survey by NARFE

26. Enhancing the Donor Experience • Increase access to federal retirees – Survey by NARFE

27. Enhancing the Donor Experience • Increase access to federal retirees – Survey by NARFE

28. Enhancing the Donor Experience • Increase access to federal retirees – Survey by NARFE

29. FLOWCHART – RETIREE AUTOMATIC CONTRIBUTIONS CFC Notification Enhancing the Donor Experience Monthly Pay Statement, 1099, etc. RETIREE Retirement Services Online Screen with CFC Link Billing Online Pledge Form & Charity List Voluntary Allotment System Credit Card Company Credit Card Payment Option Monthly Allotment Data Data OPM Annuity Payment File U.S. Treasury Dept. PCFOs or Super-PCFO $ $ PAYOUT TO CHARITIES TRACKING DATABASE

30. Streamlined Campaign Infrastructure • Increase effectiveness of payroll office reporting • Possible improvements: • Being able to log in and download or view reports. • Central place to do download and view reports for all payroll providers. • Receive report as an e-mail attachment in excel (better) or pdf. • Receive report as the e-mail (like GSA does now). • Receiving paper copies of the reports would be an improvement (though more costly and less “green”). • Receive summary reports (still preferably electronically), but provide access to reports if further details are needed.

31. Streamlined Campaign Infrastructure • Increase effectiveness of payroll office reporting

32. Streamlined Campaign Infrastructure • Create a national CFC website that includes an online giving system for payroll allotments and credit/debit cards, lists all national and local charities, and search functionality • CFC site would be be the logical home to host online giving options and an internal portal to serve charity applications, internal memos, with potential to support communication when routing universal gifts to the correct charity. • CFC donors will benefit from the ability to view a map and click on a particular area, or the area they wish to target their gift. Though it has some redundancy with search boxes and the ability to click on a map, this approach serves the needs of a broad audience of donors. • Majority of local campaigns are using off the shelf webpage systems already with varying degrees of quality. They are figuring out local level authoring already. An OPM run content management system can give everyone the same playing field, with some loss of individuality, but that may be worth it to improve accountability and branding. • (mockup on next slide)

34. Streamlined Campaign Infrastructure • Create “universal giving” structure that allows donors to contribute to organizations participating in other regions • (sample flow chart next slide)

35. Streamlined Campaign Infrastructure

36. Streamlined Campaign Infrastructure • Increase the value proposition of the campaign for donors • Current method: Costs recovered from donations only •  All donations are charged an equal % by the local campaign before sending net to charities. • The % amount is set annually by each campaign based on the total budget. • Pros: • Easy to administer. • All charities receive the same net % of donations. • Cons: • Results in larger CFC donors, and their charities, paying more for the same service. • Participating charities that raise nothing pay nothing; their participation costs have to be underwritten by the other charities and their donors. • Requires PCFOs to finance the CFC budgets and recover costs from donations later.

37. Streamlined Campaign Infrastructure • Option A: Costs recovered by charity fees only • Application fees: Unaffiliated and new federated charities require application reviews that increase costs and are charged an application fee. • Listing fees: All participating charities receive the same benefit of being presented to federal employees. The campaign divides the remaining budget by the number of listed charities to determine the listing fee. • Pros: • 100% of donations collected go to recipient charities (new value proposition) • Allows the CFC to compete with any other method of donating. • All donors and participating charities pay equally for the same benefit. • Eliminates the need for PCFO lines of credit. • Some charities may choose not to apply to as many CFC's. • Cons: • Requires estimating the number of charities to set the fee. • Requires charities to finance the CFC budgets up front and recover costs from donations later. • Upfront fees will increase the overhead rates of the participating charities. • Will shift net contributions to larger charities from smaller charities. • Some charities may choose not to apply.

38. Streamlined Campaign Infrastructure • Option B: Costs recovered from donations + fees • Campaigns charge a 5% maximum fee on donations and charge application and listing fees to recover remaining budget. • Pros: • 95% of donations collected go to recipient charities. • Allows the CFC to compete with other methods of donating. • All donors and participating charities pay a minimum amount. • Moderates the shift in contributions from smaller to larger charities. • Cost of financing the campaign is shared by donors and charities. • Cons: • Requires estimating the number of charities to set the fee. • Upfront fees will increase the overhead rates of the participating charities. • Some charities may choose not to apply.

39. Streamlined Campaign Infrastructure • Create a national CFC receipts and distribution center to process contributions • (Sample flow chart next slides)

43. Public Testimony • PRESENTORS • Renee Acosta, President, Global Impact • Million Dollar PCFO Roundtable  •  Barbara Barfield, PCFO, CFC of the Pikes Peak Region •  Charles Carey, PCFO, SoCal CFC •  Demetrius Stevenson, PCFO, Greater Los Angeles Area CFC