Issue #149, Spring 2007


Fundraising

Workplace Giving: Everyday Philanthropy


By Nichole Brown

In 2004, federal employees donated $256 million through the Combined Federal Campaign (CFC)-the world's largest workplace fundraising campaign. The CFC allows federal civil, postal and military workers to donate money to participating nonprofits that provide health and human-service benefits in their communities. Employees who wish to participate choose among eligible charities, designating specific dollar amounts that are then deducted from their paychecks.

Workplace giving offers a well-established fundraising opportunity for community development corporations and other neighborhood and low-income community advocacy groups. Such groups as the National Low Income Housing Coalition (NLIHC), Coalition to End Homelessness, Human Investment Project and Venice Community Housing Project have reaped the rewards of participation.

Besides the federal campaign, a number of states and municipalities have workplace giving campaigns of their own. New Jersey has a statewide campaign, as well as northern and southern state campaigns and 19 county campaigns. State programs also exist in Arizona, California, Connecticut, Florida, Illinois, Michigan, Missouri, North Carolina, Pennsylvania and Washington. Many private-sector businesses, such as American Express, General Electric and AT&T, sponsor independent corporate campaigns, which operate much like the CFC.

CFC History
Government employees have donated money to charities through the workplace since the 1940s. In the early years, the campaigns were largely unregulated. Employees were continually asked to give to all manner of causes and were overwhelmed by the frequency of fundraising. Before the days of payroll deductions, the many individual solicitations often resulted in not much more than pocket change. The overall process was extremely disruptive to employees who were bombarded with frequent requests for money.

Federal guidelines were established in 1958 to limit the frequency with which charities could fundraise and to identify the kinds of groups that could solicit donations. Unscheduled requests were eliminated, and charities were restricted to an annual appeal. Eligibility standards and a screening process were put in place to vet organizations interested in participating. The new system was considered a major improvement, but employees were still inundated with too many requests from the individual groups.

In 1964, the Combined Federal Campaign was created to consolidate all fundraising drives. With one uniform campaign, employee donations increased and workers' attitude toward giving improved. According to the Office of Personnel Management, the reforms were responsible for the rise in federal employee giving from $12.9 million in 1964 to $82 million in 1979.

The level of charitable participation did not experience the same growth: There were 23 CFC charities in 1969, and 33 in 1979. But as the CFC system for giving became more streamlined and the definition of "human health and welfare charity" expanded to include public-advocacy and legal-defense groups, the number of CFC organizations ballooned to more than 20,000 worldwide-from neighborhood food pantries to emergency shelters to national and international relief organizations. Some charities-generally those with similar interests-joined "federated groups" to participate in collective fundraising efforts.

Making CFC Work
To qualify for CFC, either independently or through a federation, a nonprofit must be classified as a national or a local organization. To be considered national, a nonprofit must have provided services, benefits or assistance in 15 or more states or a foreign country over a three-year period. Local nonprofits must have a significant presence in a particular geographical area of their communities or states.

Nonprofits are required to adhere to certain fundraising and operations standards. For example, they must not receive more than 80 percent of their revenue from government sources nor can they be affiliated with lobbyists. Local groups must have their offices open for at least 15 hours a week. They must also go through an extensive review of their activities and financial practices and must reapply annually for inclusion in the next year's funding campaign. Applications are accepted between December and January for national organizations, and March and May for local groups. Annual campaigns are held during a six-week period, anytime between September 1 and December 15.

NLIHC, a D.C.-based policy advocacy group working to end the affordable-housing crisis in the United States, receives on average just under $5,000 a year from federal employees in the District of Columbia, according to its president, Sheila Crowley. It's not a huge sum, but for a nonprofit it's nothing to sneeze at-especially given the limited effort and expense required.

Once they are accepted into the campaign, nonprofits have to do very little to participate. They are listed in the official CFC brochure, which also includes a description of their services or programs. These brochures are made available to all employees who wish to donate. Nonprofits are encouraged to publicize their activities by distributing promotional materials in public areas of federal workplaces and by participating in annual campaign kick-off events.

When nonprofits join workplace giving campaigns, either in the public or the private sector, they can achieve two goals: The campaigns bring in much-needed donations and provide an opportunity to inform a broader public about the organizations' work. And while they may not have the big-money potential of some traditional institutional funding streams or the deep pockets of well-heeled philanthropists, workplace-giving campaigns are valuable sources of funding.