News and analysis
April 16, 2014

United Way Plans to Ask Congress to Strike New Rules to Govern Federal Charity Drive

Idit Knaan for The Chronicle

United Way Worldwide may ask Congress to overturn new rules announced this month to modernize the government’s annual charity drive, saying the changes will hasten the continuing decline in donations from federal workers.

The most-recent campaign produced nearly $210-million for the nation’s charities, a sharp drop from the high of $283-million in 2009.

The most controversial changes to the Combined Federal Campaign, set to start in 2016, will ban federal workers from making their charitable contributions in cash; charge nonrefundable application and other fees to nonprofit organizations that raise money in the drive; continue to consolidate the 163 local drives that make up the campaign; and centralize distribution of the money raised under the federal Office of Personnel Management.

Those changes were opposed by nearly all of the hundreds of individuals and organizations that formally commented on the proposals last year.

Federal officials say the changes will reduce expenses and eliminate redundant, paper-heavy functions.

“We are very disappointed that OPM decided to go forward with these rules despite overwhelming opposition,” said Steve Taylor, senior vice president for United Way Worldwide, whose local affiliates manage many of the drives.

He added, “We are likely to ask Congress to overturn the rules.”

The fees that charities will have to pay to apply and participate in the fundraising appeal could force small charities out of the campaign, Mr. Taylor said.

Phased-In Changes

Since the proposed changes in the campaign’s rules were first announced a year ago, critics have warned that the changes could exacerbate the campaign’s steady decline.

While the proposal to ban cash gifts would begin in 2016, the federal government said it would not try to take other steps to go electronic, such as eliminating paper pledge forms, until 2020.

Keith Willingham, director of the Combined Federal Campaign, said the long transition away from paper pledge forms should provide plenty of time for employees and offices to adjust. Cash gifts, however, need to be eliminated sooner.

“Cash is a high-risk exchange,” Mr. Willingham said. “What we have offered to do in place of that is debit cards and checks.”

Shift in Disbursements

Other changes could offset any decline in giving related to the new rules, according to Mr. Willingham.

Federal employees will be educated about the campaign when they are hired, and the new system will allow workers to give to local charities anywhere in the nation, not just in the region where they work.

Katherine Archuleta, director of the Office of Personnel Management, wrote in a blog post about the rules that the “transition to online giving” will result in a “more cost-effective and more convenient” campaign in which federal workers’ donations “will go directly to the charities they want to help.”

Now, most donations are distributed by local United Way chapters. Under the new centralized system that function will shift to the Office of Personnel Management.

Mr. Taylor said the United Way’s opposition is not a result of the loss of its authority in channeling donations to charities. He said the Combined Federal Campaign accounts for only $150-million of the $2.75-billion that the United Way processes through all of the workplace-giving programs it manages.

“This is not about this United Way. This is about how the rules are going to reduce giving through the CFC,” he said. “Charities like United Way are the experts on charitable giving, and OPM is not.”

Send an e-mail to Doug Donovan.