Solicitation of Federal Civilian and Uniformed Service Personnel for Contributions to Private Voluntary Organizations, 21581-21595 [2014-08574]

Agencies

• Office of Personnel Management

[Federal Register Volume 79, Number 74 (Thursday, April 17, 2014)]
[Rules and Regulations]
[Pages 21581-21595]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2014-08574]



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Federal Register / Vol. 79, No. 74 / Thursday, April 17, 2014 / Rules 
and Regulations

[[Page 21581]]



OFFICE OF PERSONNEL MANAGEMENT

5 CFR Part 950

RIN 3206-AM68


Solicitation of Federal Civilian and Uniformed Service Personnel 
for Contributions to Private Voluntary Organizations

AGENCY: Office of Personnel Management.

ACTION: Final rule.

-----------------------------------------------------------------------

SUMMARY: The Office of Personnel Management (OPM) is issuing final 
regulations concerning the Combined Federal Campaign (CFC). These final 
regulations are being issued in order to strengthen the integrity, 
streamline the operations and increase the effectiveness of the program 
to ensure its continued growth and success. They were designed in 
response to the recommendations of the CFC-50 Commission in the Federal 
Advisory Committee Report on the Combined Federal Campaign, issued in 
July, 2012. As such, we expect these regulations will improve donor 
participation, CFC infrastructure, and standards of transparency and 
accountability.

DATES: Effective January 1, 2016.

FOR FURTHER INFORMATION CONTACT: Mary Capule by telephone at (202) 606-
2564; by FAX at (202) 606-5056; or by email at cfc@opm.gov.

SUPPLEMENTARY INFORMATION: These regulations are effective for the 2016 
campaign period. Regarding funds contributed to the CFC during the 2014 
campaign year, LFCCs and PCFOs will continue to operate, disburse 
funds, and submit to compliance requirements in accordance with 
regulations in 5 CFR part 950 as amended at 71 FR 67284, Nov. 20, 2006. 
OPM is issuing final regulations concerning the administration of the 
CFC. These final regulations present a balanced approach to the current 
and anticipated future needs of the CFC. They also improve upon the 
tradition of accountability in the program by providing Federal donors 
with assurances that the CFC maximizes efficiency and that campaign 
costs are reduced; a greater portion of donors' contributions are 
passed to the intended recipient charities; that contributions through 
the CFC are distributed according to donors' wishes; and that CFC 
participating charities are fiscally accountable. OPM encourages 
stakeholders and non-profit sector institutions with an oversight 
mission to collaborate to ensure that all charities are fully 
accountable to the public they serve. OPM will continue to emphasize 
the importance of providing complete, accurate, and timely financial 
data to donors, regulators and the public, and will support donors by 
providing them with information to evaluate the charities of their 
choice. Over the first three campaign periods affected by these rules, 
OPM will continue to review the impact of the rules and engage with 
stakeholders to ensure that the rules are having the intended effect on 
the CFC.
    In 2011, the CFC celebrated its 50th anniversary. In connection 
with this landmark anniversary, OPM announced the formation of the CFC-
50 Commission. The Commission, formed under the Federal Advisory 
Committee Act, was asked to study ways to streamline and improve the 
program; improve accountability, increase transparency and 
accessibility and make it more affordable. More about the Commission 
and its recommendations are available at https://www.opm.gov/combined-federal-campaign/cfc-50-commission.
    The Commission delivered its report to the OPM Director on July 20, 
2012. The report contained 24 recommendations for improvement in the 
following areas: donor participation, CFC infrastructure, and standards 
of accountability and transparency. With these recommendations, the 
proposed regulations were issued to improve the CFC, based on OPM's 
experience administering the program and its considered judgment, and 
facilitate modernization of the CFC. The proposed regulations are 
available at https://www.federalregister.gov/articles/2013/04/08/2013-08017/solicitation-of-federal-civilian-and-uniformed-service-personnel-for-contributions-to-private.
    On April 8, 2013 (78 FR 20820), OPM issued comprehensive proposed 
regulations to revise the procedures governing the solicitation of 
Federal civilian and uniformed services personnel at the workplace for 
contributions to private non-profit organizations. That workplace 
solicitation is known as the CFC, administered by OPM under the 
authority of Executive Order 12353 (March 23, 1982) as amended by 
Executive Order 12353 (March 23, 1982), 47 FR 12785 (Mar. 25, 1982), as 
amended by Executive Order 12404 (February 10, 1983), 48 FR 6685 (Feb. 
15, 1983).
    In this final rule, OPM addresses the comments received on the 
proposed rules set forth at 5 CFR part 950. The 60 day public comment 
period ended June 7, 2013. A total of 1,382 comments were received from 
participating CFC organizations, Principal Combined Fund Organizations, 
members of Local Federal Coordinating Committees, individuals, and 
Federal government agencies. As a result of these comments, OPM has 
made a number of changes to improve these final rules.

Provisions To Improve Donor Participation, CFC Infrastructure, and 
Standards of Accountability and Transparency

    In the view of the CFC-50 Commission (herein ``the Commission''), 
the existing CFC regulations hinder or otherwise prevent charitable 
workplace giving in certain circumstances, such as among newly hired 
federal employees and in times of disaster relief. Additionally, the 
Commission determined that there exist in current regulations 
opportunities for improvement to CFC infrastructure, such as local 
governance structure, streamlining campaign administration, and 
administrative cost recovery. Finally, the Commission identified areas 
in current regulations where standards of accountability and 
transparency could be improved, both by relieving the burdens on 
charities' application requirements (such as application frequency and 
audit requirements) and by improving the transparency of distribution 
processes (such as by strengthening oversight of federations

[[Page 21582]]

and improving payroll deduction disbursement and reporting).
    The proposed regulations include the addition of three (3) 
provisions intended to improve donor participation; revision of six (6) 
regulations regarding CFC infrastructure intended to improve efficiency 
and reduce campaign costs; and four (4) revisions aimed at improving 
standards of accountability and transparency.
    The proposed regulations being adopted by OPM in this final rule 
are summarized as follows:
    (1) Campaign Solicitation Period. Under current regulations, the 
CFC solicitation period runs from September 1 to December 15. OPM 
proposed to change its regulation at Sec.  950.102(a) to shift the 
campaign solicitation period by one month, so that it would begin on 
October 1 and end on January 15. The proposed regulation was in line 
with the Commission recommendation to ``Change the campaign 
solicitation end date from December 15 to January 15.'' OPM noted that 
the proposed change would allow the many employees who take leave 
during the month of December to contribute through the campaign when 
they return in the month of January. It would also enable employees to 
consider the impact of future pay and other benefits (which often take 
effect the first full pay period in January) before making donations. 
OPM received 139 comments that addressed the proposed change in 
solicitation period with 76 comments (54.7%) being in support. The 51 
comments (36.7%) made in opposition to the proposed change raised a 
number of concerns, the most numerous of which were: having charitable 
contributions fall into two different tax years; having a fixed 
campaign end date against the variable nature of the pay calendar; and 
having to kickoff the campaign in less desirable weather. OPM carefully 
considered these comments and revised its proposal to accommodate how 
pay periods fall in the calendar from year to year and to allow for 
easy correction in the case that the original recommendation proves 
untrue and the change has little effect. This final rule stipulates 
that the Director will annually set the dates for the campaign period, 
but that it shall start no earlier than September 1 and end no later 
than January 15.
    (2) Immediate Eligibility. Under current regulations, new employees 
may not begin participating in the CFC until the next scheduled 
campaign solicitation period begins. OPM proposed to amend its 
regulation at Sec.  950.102 to allow new employees to make CFC pledges 
immediately upon entering Federal service. Under OPM's proposal, new 
employees would be provided information on the CFC at orientation and 
be able to make pledges within 30 days of being hired if hired outside 
of the solicitation period. This will enable those employees who wish 
to make an immediate contribution to do so. The proposed regulation was 
in line with the Commission recommendation to ``Allow new employees to 
make CFC pledges immediately upon entering Federal service rather than 
waiting until the campaign.'' OPM received 142 comments regarding 
immediate eligibility, of which 94 comments (66.2%) were in favor. The 
remaining 48 comments were either neutral or were opposed citing 
skepticism that--under the CFC's current infrastructure--immediate 
eligibility could be made to work effectively. OPM, however, takes the 
position cited by the Commission that ``Federal employees should be 
allowed to begin their careers with charitable giving to those in 
need.'' Additionally, OPM points out that added improvements in the 
proposed regulations and enacted through this final rule would 
facilitate a successful process of immediate eligibility.
    (3) Disaster Relief Program. Under current regulations, the OPM 
Director is authorized to allow special solicitations to respond to 
disasters. There is no standing mechanism in place, but rather each 
disaster requires a new authorization from the Director for a special 
solicitation period. OPM proposed to create a permanent structure to 
streamline and facilitate solicitations tied to disaster relief. 
Accordingly, OPM proposed to amend its regulations at Sec.  950.102 to 
provide for the creation of a Disaster Relief Program that would be 
available to donors within hours after a disaster. OPM received 72 
comments that addressed the creation of a disaster relief program with 
51 comments (70.8%) being in support. The remaining 21 comments were 
either neutral or were opposed, like with immediate eligibility, citing 
skepticism that--under the CFC's current infrastructure--a disaster 
relief program could be made to work effectively. Again, OPM points out 
that added improvements in the proposed regulations and enacted through 
this final rule would facilitate a successful disaster relief program.
    (4) Local Governance Structure. Currently, the CFC is managed 
locally through Local Federal Coordinating Committees (LFCC). The 
number of LFCC representatives, the level of engagement, and knowledge 
of CFC rules and regulations vary greatly among the 163 campaign 
regions in the U.S. and overseas. In some areas, campaigns have 
difficulty identifying Federal employees who can dedicate the time to 
fulfill the LFCC's oversight responsibilities, including the selection 
of a Principal Combined fund Organization (PCFO), review and approval 
of reimbursable campaign expenses, review of local charity 
applications, and oversight of the PCFO's CFC functions. OPM proposed 
to modify its regulations at Sec.  950.103 to change the LFCC to a 
Regional Coordinating Committee (RCC) structure. At a minimum, the RCCs 
would have been comprised of representatives of Federal inter-agency 
organizations, such as Federal Executive Boards, or personnel assigned 
to the military installation(s) and/or Federal agency(ies) identified 
as the lead agency(ies) in that region. Under the proposed change, the 
responsibilities of the RCC would have been similar to those of the 
LFCC with the exception of the selection and oversight of a PCFO. OPM 
believed, at the time of the proposed change, that the reduction in 
responsibilities, in addition to having larger campaign zones from 
which to select member of the RCC, would attract more individuals to 
serve in this important leadership role. The proposed change is in line 
with the Commission's recommendations to ``Improve the governance of 
the CFC program at the local level'' by (1) consolidating campaigns 
into local areas more likely to attract federal employees capable and 
willing to complete ``annual or periodic training which may require 
certification (as recommended by the Commission); and (2) reducing the 
workload of these personnel. The proposed change, however, appears to 
have been interpreted as a deliberate attempt to regionalize the CFC 
instead of merely removing ineffective campaigns and reducing the 
LFCC's workload in the campaigns that remained. OPM received 643 
comments regarding local governance structure, of which 615 comments 
(95.7%) were opposed. The overwhelmingly prevalent reason for opposing 
the change was a perceived removal of LFCCs and, in turn, the ``local 
touch'' in the CFC. OPM points out that nothing in the proposed 
regulation diminishes local management of the campaign or face-to-face 
solicitation by federal employees. A sizable portion of the comments 
received in opposition suggested that OPM continue to weed out 
ineffective, non-compliant, and costly campaigns through mergers as it 
has in recent

[[Page 21583]]

years. Between 2006 and 2013, the number of local campaign areas has 
been reduced from 277 to 163. To this point concerns that the reduction 
of local campaign areas diminishes ``local touch'', thereby resulting 
in declining participation rates (as expressed in some of the public 
comment) appear to be unfounded. An analysis of participation in the 
merged campaigns indicates there is no correlation between 
participation rate and whether a campaign has merged. On average, 
between 2007 and 2012, campaigns saw a -2.1% change in participation 
over their pre-merger campaign year while campaigns that did not merge 
realized a -1.7% change in participation. This small difference is 
understandable when one considers that ``non-surviving'' campaigns tend 
to have significantly lower participation rates. For instance, in the 
same years, the average participation rate for campaigns that were 
merged out of existence at some point during that time period was 19.8% 
compared to the national average of 24.4%. At any rate, two-year post-
merger participation rate saw a -3.1% change versus the two-year change 
in the national average of -3.2%. Nonetheless, OPM considered the 
comments and its own analyses and submits this final rule which merely 
amends Sec.  950.103 to remove from the LFCC's responsibilities the 
selection of a PCFO. The title Local Federal Coordinating Committee 
(LFCC) is maintained.
    (5) Electronic Donations. OPM proposed to modify Sec.  950.102 to 
eliminate the use of cash, check and money order contributions. 
Instead, OPM had intended to require all donations to be made by 
electronic means. By moving to an exclusively electronic donation 
system, OPM expected to increase the efficiency of the administration 
of the CFC by eliminating burdensome paperwork, saving resources, and 
removing the possibility of the mishandling of cash. The proposed 
change was made in accordance with the Commission's recommendation to 
``Accelerate efforts to `go green' by reducing paper processes within 
the CFC as much as possible.'' Additionally, the proposed change is a 
direct response to the Commission's recommendation to ``Monitor overall 
campaign costs to seek continued efficiencies.'' OPM's analysis of 2012 
campaign costs indicates that costs associated with ``one-time'' cash/
check gifts account for 3.1% of campaign costs while contributing 7.4% 
to total contributions. Furthermore, it is estimated that half of these 
contributions are received through fundraising events. Costs associated 
with all paper pledge form contributions account for 9.3% of total 
campaign costs, with a single paper pledge costing $3.51. By way of 
comparison, electronic giving methods account for 1.3% of campaign 
costs with a single electronic pledge costing less than half that of a 
paper pledge at $1.45. Despite this, OPM received 867 comments on 
electronic giving (making it the second most commented upon proposed 
regulation change) of which 839 comments (96.8%) expressed opposition. 
Two points tended to be the basis for opposition: (1) That electronic 
giving methods are under-utilized (public comment cited figures between 
16% and 25% of all pledges are currently being made electronically) and 
that electronic giving implementation rates have been weak; and (2) 
that the removal of a giving method is contrary to typical nonprofit 
fundraising practices which are aimed at offering donors a wide array 
of giving methods. OPM responds to the first of these by pointing out 
that slow implementation is the cause of under-utilization and that 
proper analysis of electronic giving utilization requires segregation 
of Federal employees that are not offered an electronic giving method. 
In other words, OPM's analysis indicates that only 74.1% of all Federal 
employees were offered an electronic giving option in 2012 and, of 
those that contributed, one third gave electronically. However, OPM 
concedes the second point and acknowledges that removing a giving 
option could hinder the campaign. Therefore, this final rule removes 
only cash as a giving method.
    (6) Training and Oversight. OPM proposed to modify Sec.  950.104 to 
provide for additional training and oversight of the LFCC. The training 
would be conducted by OPM staff and would focus on oversight 
responsibilities, charity eligibility requirements, and how to select 
an organization to market the campaign and review/approve its 
reimbursable marketing expenses. The proposed regulation was made in 
line with the Commission's recommendation to ``Improve the governance 
of the CFC program at the local level'' in which the Commission 
specifically suggested ``[requiring] all LFCC members to participate in 
annual or periodic training.'' OPM received 64 comments on training and 
oversight, making it the least commented upon proposed regulation. Of 
those, 34 comments (53.1%) supported expanded training opportunities. 
Those that opposed assumed OPM has a lack of personnel and budgetary 
resources to offer such training; however, OPM points out that much of 
the training has already been developed and is frequently presented by 
its current staff. Furthermore, much of the training and certification 
processes can be presented in a web-based format. These points mean 
that training costs to OPM will be minimal. Therefore, this final rule 
adopts the proposed change without revision.
    (7) Elimination of Paper Processes. OPM proposed to modify Sec.  
950.104 to eliminate printing and distributing the Charity List in an 
effort to reduce paper processes. Rather, this list will be made 
available exclusively through electronic means. This change was meant 
to reduce overhead costs and increase efficiency in the administration 
of the CFC program. This proposed change is in line with the 
Commission's recommendation to ``Accelerate efforts to `go green', 
reducing paper processes within the CFC as much as possible'' and to 
``Monitor overall campaign costs to seek continued efficiencies.'' OPM 
received 245 comments pertaining to the elimination of paper processes, 
of which 225 comments (91.8%) were opposed. Most of these comments 
cited the fact that many federal employees do not have workplace access 
to the internet. Still others commented that OPM didn't address paper 
processes such as charity applications and audit guides. OPM 
acknowledges that not all employees have access to the internet and 
points out that other paper processes were not included in the proposed 
regulations as they do not require regulatory changes. With this in 
mind, OPM enacts this final rule which retains the current requirements 
pertaining to the contents and format of pledge forms and charity lists 
as well as the information that must be contained within an individual 
charity listing remain in effect for both printed and electronic pledge 
forms and charity lists.
    (8) Streamlining Campaign Administration. Under current 
regulations, many campaign administration functions are performed by a 
number of Principal Combined Fund Organizations (PCFOs) supporting 
local campaigns throughout the country. OPM continues to believe that a 
centralized approach will benefit from economies of scale and 
ultimately reduce overhead costs. Accordingly, OPM proposed to modify 
its regulations at Sec.  950.105 to eliminate the PCFOs. In their 
place, OPM proposed to consolidate responsibilities for back office 
functions and establish one or more Central Campaign Administrators 
(CCA). The CCA would either perform these functions itself or would set 
up

[[Page 21584]]

regional receipt and disbursement centers. OPM further proposed that 
the LFCC may engage a ``marketing firm'' to continue outreach to 
Federal, Postal and military personnel, functions currently coordinated 
by the PCFOs. This recommendation parallels the Commission's 
recommendation to ``Consolidate PCFO back office functions into 
regional receipt and disbursement centers or a national center''. The 
Commission, likewise, noted, ``with concern, the cost of the CFC is 
driven up significantly by having numerous PCFOs engaged in similar 
back-office functions like processing receipt and distribution of 
contributions.'' OPM received 245 comments pertaining to streamlining 
campaign administration of which 205 comments (83.7%) were opposed. The 
primary reason cited for opposition was, again, a perceived loss of 
``local touch''. However, OPM notes that the response in opposition to 
this proposed regulation change (accounting for 14.8% of all submitted 
comments) was not as great as it was to proposed changes to local 
governance structure (which accounted for 44.5% of all submitted 
comments). This reasonable conclusion is that there is far less of a 
fear that the elimination of PCFOs will reduce the ``local touch'' of 
the CFC. Additionally, OPM points out that the elimination of the role 
of PCFOs does not necessarily mean that the organizations that 
currently serve in this capacity will no longer have a place within the 
CFC. OPM recognizes that these organizations contribute added value in 
the form of marketing fundraising efforts. OPM acknowledges that its 
reference to a ``marketing firm'' in the proposed regulation was 
mistaken by many as a for-profit marketing agency. OPM, therefore, 
takes special care in this Final Rule to define an ``Outreach 
Coordinator'' as ``an individual or an entity hired by the Local 
Federal Coordinating Committee to conduct marketing activities, arrange 
for events such as Charity Fairs, and other such efforts to educate 
charities and donors regarding the program.'' In this way, OPM hopes to 
maintain the skill sets of the best among the current PCFOs in a role 
that actually focuses on their ability to provide ``local touch'' in 
promoting the campaign while removing from those organizations' 
responsibilities all redundant ``back room'' operations which would be 
shifted to the CCA(s). Finally, some comment expressed opposition to 
OPM's requirement that the CCA be recognized by the IRS as a 501(c)(3) 
organization; however, OPM is maintaining this requirement as funds 
passed from donors to the CCA may not be tax-deductible if the CCA does 
not hold 501(c)(3) status. Other than the addition of the definition of 
the Outreach Coordinator, this final rule adopts the proposed change 
without revision.
    (9) Administrative Costs. Currently, the overhead administrative 
costs of much of the CFC program are paid out of donor contributions 
through the campaign. OPM maintains that more transparency with respect 
to administrative overhead would be beneficial to the program, to the 
donors, and to the charitable organizations that receive donations 
through the CFC. Accordingly, OPM proposed that the cost of the 
campaign previously outlined in Sec.  950.106 instead be recovered 
through application fees paid by the charitable organizations that 
apply for participation in the CFC. This section also proposed how the 
fees will be collected and the permissible uses of the fees. 
Additionally, upfront application fees would require that charities 
properly adjust for campaign costs in their own accounting, something 
that the current process of cost deduction does not reflect. The 
proposed regulation stemmed directly from the Commission's 
recommendation to ``Increase the value proposition for donors by 
shifting the burden of CFC costs from donors to participating 
charities,'' more specifically ``The Commission recommends that OPM 
move toward a system through which CFC costs are paid by participating 
charities.'' The Commission continues: ``If all costs can be handled in 
this manner, the CFC will be able to assure donors that 100 percent of 
their donations reach the benefiting organizations. Even if only a 
portion of the costs are paid by charities, the CFC will still be able 
to assure donors that a very high portion of the money donated 
ultimately reaches the beneficiaries.'' Moreover, testimony presented 
to the Commission by a major national federation supported the 
recommended application fee, taking its rationale a step further: ``In 
addition to defraying costs, an application fee would discourage those 
charities who receive no benefit from the campaign from applying, 
thereby reducing administrative costs.'' It is in the spirit of these 
recommendations that OPM proposed to restructure CFC cost recovery. 
However, the issue of administrative costs was the most hotly contested 
topic in the public comment, receiving 966 comments (the most of any 
proposed regulation) of which 911 comments (94.3%) expressed concern 
over proposed regulation. Interestingly, some of the concern came from 
the very Commission and testimony that had originally supported the 
recommendation. A vast majority of the concern stemmed from not knowing 
the precise amount of the annual application fee. Many comments went so 
far as to agree to an application fee in principle, but opposed the 
change as long as a precise amount was not made part of the regulation. 
Additionally, much concern was raised over the possibly exorbitant 
amount of the application fee based on current national campaign costs; 
however, these concerns did not take into account the cost avoidance to 
be realized by enacting the other proposed regulations, nor did they 
appear to consider that upfront application fees would reduce cost 
deductions from distributions. OPM concedes too many comments expressed 
that the fee would present a ``barrier to entry'' for many charities; 
however, as mentioned in the testimony before the Commission, the 
economics of the campaign support a reasonable barrier to entry for 
charities that receive no benefit yet contribute to the cost of the 
CFC. For example, of the 23,895 national, international, and local 
charities that participated in the 2012 CFC, 20% received no 
contributions from federal employees. However, there are costs 
associated to the review of the applications and the printing of their 
information in the CFC Charity Lists. These costs are ultimately borne 
solely by those charities that received designations. Finally, several 
voice their concerns over the nonrefundable nature of the application; 
OPM dismisses these concerns in deference to the generally accepted 
concept of an application fee. Therefore, this final rule enacts a 
nonrefundable application/listing fee intended to cover the fixed costs 
of the campaign. The amount of the fee will be determined by the 
Director of OPM and announced prior to the application period. In no 
case will the application fee exceed an amount equivalent to the 
previous campaign period's budgeted costs divided by the number of 
participating charities, nor will it be greater than 125% of the 
previous year's application fee (except in the first year of this final 
rule). For example, if the previous campaign period realized fixed 
costs of $6 million with 25,000 listed charities, the application/
listing fee would not exceed $240. However, if the previous campaign 
period's application fee was $190, then the application/listing would 
not exceed $237.50. All expenses not covered through the

[[Page 21585]]

collection of application fees will be deducted from distributions.
    (10) Streamlined Application Process. Believing there were 
efficiencies to be gained in its charity application process, OPM 
proposed to modify the regulations at Sec.  950.201 to reduce the 
burden on charities that have previously been admitted to participate 
in the program. Thus, these charities would be required to produce a 
more limited specified set of documents, via a reduced application 
form, to be admitted for the subsequent two years. OPM believes this 
approach will provide sufficient information to evaluate the charity's 
continuing eligibility while reducing unnecessary administrative 
burdens on the charity. This proposed regulation was in line with the 
Commission's recommendation to ``Streamline the charity application 
process to reduce costs for participating charities.'' Though OPM 
received only 124 comments, the 96 comments (77.4%) received in favor 
of the proposed regulation made it the most amenable of the proposed 
changes. This final rule enacts the proposed change without revision.
    (11) Audit of Small Charities. OPM proposed to modify its 
regulations at Sec.  950.203 to waive the audit requirement for 
national organizations reporting less than $100,000 in annual revenue 
to the IRS. In addition, OPM proposed that an organization with annual 
revenue of at least $100,000 but less than $250,000 not be required to 
undergo an audit, but have their statements reviewed by an independent 
certified public accounting firm. This would remove a disproportionate 
burden on small charities. This proposed regulation parallels the 
Commission's recommendation to ``Consider a tiered process for 
application requirements to reduce for small local charities the 
disproportionate burden of obtaining annual audited financial 
statements.'' Although OPM received only 48 comments pertaining to the 
audit of small charities, 20 comments (27.8%) were opposed, most of 
them on the grounds that the proposed change constitute a lowering of 
accountability standards. OPM recognizes this concern; however, it is 
pointed out that smaller charities pose the smallest of accountability 
threats. This final rule, therefore, sets for the proposed change 
without revision.
    (12) Oversight of Federations. OPM proposed to strengthen its 
regulations regarding federations to increase accountability and 
transparency. OPM proposed changes to Sec.  950.301 to specify that 
federations provide a copy of each member organization's application, 
require dates upon which disbursements must be made to members, add 
additional reporting requirements, and prohibit deductions of dues/fees 
from the disbursement of CFC contributions. Additionally, invoicing 
member organizations for federations' services rendered would require 
that charities properly adjust for campaign costs in their own 
accounting, something that the current process of federation fee 
deduction does not reflect. The proposed changes were in accordance 
with the Commission's recommendations to ``Strengthen CFC regulations 
regarding federations to increase transparency and accountability'' in 
which the Commission specifically cited federations' governance 
structures and potential conflicts of interest; administrative fees 
charged to federation members; lack of timeliness in the disbursement 
of funds to federation members; and need for improved record keeping. 
Although the proposed change attracted a somewhat limited response of 
only 201 comments (14.5% of all the 1,382 comments submitted), the 178 
comments in opposition (88.7% of those pertaining to oversight of 
federations, most of which appear to be a form letter) tended to assume 
that the proposed changed prevented federations from charging their 
member organizations fees for services rendered. However, OPM points 
out that this is not the case and, instead, federations may invoice 
their members separately from CFC distributions, thereby making 
transparent the cost to organizations. While several federations 
commented that the proposed regulation amounts to ``overreach and 
interference with the relationship between a federation and its member 
organizations . . . above and beyond the CFC in its scope,'' OPM's 
position is to assure that maximum transparency exists for CFC donors 
and participating charities. This final rule is enacted without 
revision.
    (13) Payroll Deduction Disbursements. OPM proposed to standardize 
and improve how payroll offices provide donor pledge reports to 
campaigns. OPM proposed changes to former Sec.  950.901 (Sec.  950.801 
in the proposed regulations) to require payroll offices to either 
distribute funds to the charities directly or, if funds are transmitted 
to the CCA, provide more detailed reports. Currently, Federal payroll 
office disbursement reports vary in format and level of detail, which 
adds to the administrative costs of the campaign administrators 
responsible for ensuring the accuracy of disbursements to designated 
charities. The proposed change was in line with the Commission 
recommendation to ``Standardize and improve how payroll offices provide 
donor pledge reports to campaigns.'' OPM received 113 comments of which 
77 comments (68.1%) were in opposition, specifically with the idea of 
payroll offices disbursing campaign contributions directly to 
charities. While most comments convey a favorable opinion of OPM's 
proposal to standardize payroll office reporting, the primary complaint 
rests with some payroll offices' current challenges in correctly 
disbursing funds to PCFOs. OPM recognizes this concern and enacts this 
final rule to require payment to CCA(s), not directly to designated 
charities.

Other Areas of Public Comment

    (14) Commission Recommendations Not Requiring Regulatory Change. 
Much comment was received concerning Commission recommendations that 
were not considered in the proposed regulatory changes. These include 
implementation of survey systems; establishment of universal giving; 
and several other points regarding oversight and cost reduction. These 
recommendations are currently being evaluated, though outside the 
purview of the proposed regulation changes.
    (15) Provisions on Discrimination. OPM received a number of 
comments regarding a perceived change in policy on discrimination. As 
stated in the proposed regulation changes, Sec.  950.110 was merely 
updated to meet current legal standard and, therefore, was not being 
considered for change. Some public comment challenged the basis for the 
update, claiming they are ``not aware of any `current' legal standards' 
that require'' the update to the regulation; however, OPM interprets 
federal law which bars discrimination ``on the basis of conduct which 
does not adversely affect the performance of the employee'' (5 U.S.C. 
Sec.  2302(b)(10)) in a way that justifies the update. Furthermore, 
some public comment reflected a perception that the discrimination 
policy was binding on CFC-participating charities. OPM suggests this is 
the result of a misreading of the regulations as the regulation clearly 
states ``Nothing herein denies eligibility to any organization, which 
is otherwise eligible under this part to participate in the CFC, merely 
because such organization is organized by, on behalf of, or to serve 
persons of a particular race, ethnicity, color, religion, sex, gender 
identity, national origin, age, disability, sexual

[[Page 21586]]

orientation, or genetic background.'' OPM's policy is only with regard 
to the execution of the campaign in the federal workplace (i.e., the 
Central Campaign Administrator); and to Family Support and Youth 
Activities (FSYA) located on military installations in the United 
States and Family Support and Youth Programs (FSYP) as discussed in 
Sec.  950.202.
    (16) Native American Organizations Formed Under IRC Sec.  7871. A 
few comments were received regarding the eligibility of organizations 
established under Internal Revenue Code (IRC) Sec.  7871. OPM 
recognizes that such organizations enjoy the same benefits as 501(c)(3) 
organizations in that contributions made to them are tax-deductible to 
the donor. However, because these organizations are allowed to apply 
for recognition by the IRS under IRC Sec.  501(c)(3) without losing any 
benefits afforded to them under IRC Sec.  7871, this final rule will 
continue to require these organizations to secure determination letters 
from the IRS that they are recognized as 501(c)(3) organizations. This 
determination is in holding with rules that currently apply to other 
organizations that are ``tax-deductible'' without holding 501(c)(3) 
status.

Regulatory Flexibility Act

    I certify that this regulation will not have a significant economic 
impact on a substantial number of small entities. Charitable 
organizations applying to the CFC have an existing, independent 
obligation to comply with the eligibility and public accountability 
standards contained in current CFC regulations. Streamlining these 
standards will be less burdensome.

Executive Orders 12866 and 13563, Regulatory Review

    This rule has been reviewed by the Office of Management and Budget 
in accordance with Executive Orders 12866 and 13563.

List of Subjects in 5 CFR Part 950

    Administrative practice and procedures, Charitable contributions, 
Government employees, Military personnel, Nonprofit organizations and 
Reporting and recordkeeping requirements.

U.S. Office of Personnel Management.
Katherine Archuleta,
Director.

    For the reasons discussed in the preamble, the Office of Personnel 
Management amends 5 CFR part 950 as set forth below.

0
1. Revise part 950 to read as follows:

PART 950--SOLICITATION OF FEDERAL CIVILIAN AND UNIFORMED SERVICE 
PERSONNEL FOR CONTRIBUTIONS TO PRIVATE VOLUNTARY ORGANIZATIONS

Subpart A--General Provisions
Sec.
950.101 Definitions.
950.102 Scope of the Combined Federal Campaign.
950.103 Establishing Local Federal Coordinating Committees.
950.104 Local Federal Coordinating Committee responsibilities.
950.105 Federal Agency Head responsibilities.
950.106 Central Campaign Administrator (CCA).
950.107 Campaign expense recovery.
950.108 Preventing coercive activity.
950.109 Avoidance of conflict of interest.
950.110 CCA Prohibited discrimination.
Subpart B--Eligibility Provisions
950.201 Charity eligibility.
950.202 Charity eligibility requirements.
950.203 Public accountability standards.
950.204 Eligibility decisions and appeals.
Subpart C--Federations
950.301 Federation eligibility.
950.302 Responsibilities of federations.
Subpart D--Campaign Information
950.401 Campaign and publicity information.
950.402 Pledge form.
Subpart E--Miscellaneous Provisions
950.501 Release of contributor information.
950.502 Solicitation methods.
950.503 Sanctions and penalties.
950.504 Records retention.
950.505 Sanctions compliance certification.
Subpart F--CFC Timetable
950.601 Campaign schedule.
Subpart G--Payroll Withholding
950.701 Payroll allotment.
Subpart H--Accounting and Distribution
950.801 Accounting and distribution.

    Authority:  E.O. 12353 (March 23, 1982), 47 FR 12785 (March 25, 
1982), 3 CFR, 1982 Comp., p. 139; E.O. 12404 (February 10, 1983), 48 
FR 6685 (February 15, 1983); Pub. L. 100-202, and Pub. L. 102-393 (5 
U.S.C. 1101 Note).

Subpart A--General Provisions


Sec.  950.101  Definitions.

    As used in this part:
    Administrative Expenses means the overhead costs of the 
participating organization based on information from the Internal 
Revenue Service Form 990.
    Application Fee means a non-refundable fee paid by a charitable 
organization in each campaign period for which it seeks to participate.
    Campaign Expenses means the cost of the administration of the 
campaign by the Central Campaign Administrator and any Outreach 
Coordinators.
    Central Campaign Administrator means the organization(s) 
responsible for developing and maintaining the CFC Web site and charity 
application module, and to which OPM may assign responsibility for 
making distributions to charities.
    Charity List means the official list of charities approved by OPM 
for inclusion in the CFC.
    Combined Federal Campaign or Campaign or CFC means the charitable 
fundraising program established and administered by the Director of the 
Office of Personnel Management (OPM) pursuant to Executive Order No. 
12353, as amended by Executive Order No. 12404, and all subsidiary 
units of such program.
    Director means the Director of the Office of Personnel Management 
or his/her designee.
    Distribution fee means amount assessed against pledges received 
should the application and listing fees not cover all the costs of the 
campaign.
    Employee means any person employed by the Government of the United 
States or any branch, unit, or instrumentality thereof, including 
persons in the civil service, uniformed service, foreign service, and 
the postal service.
    Family Support and Youth Activities (FSYA) means an organization on 
a domestic military base recognized by the Department of Defense as 
providing programs for military families on the base.
    Family Support and Youth Programs (FSYP) means an organization on a 
non- domestic military base recognized by the Department of Defense as 
providing programs for military families on the base.
    Federation or Federated Group means a group of voluntary charitable 
human health and welfare organizations created to supply common 
fundraising, administrative, and management services to its constituent 
members.
    Independent Organization means a charitable organization that is 
not a member of a federation for the purposes of the Combined Federal 
Campaign.
    International General Designation Option means an option available 
to donors under which his or her gift is distributed to all of the 
international organizations listed in the International Section of the 
Charity List in the same proportion as all of the international 
organizations received designations in the local CFC. This option will 
have the code IIIII.
    International Organization means a charitable organization that 
provides

[[Page 21587]]

services either exclusively or in a substantial preponderance to 
persons in areas outside of the United States.
    Listing Fee means a non-refundable annual fee charged only to 
charitable organizations approved for participation.
    Local Federal Coordinating Committee means the group of Federal 
officials designated by the Director to oversee the CFC in a zone and 
to assist the Director with the charity application reviews.
    Organization or Charitable Organization means a non-profit, 
philanthropic, human health and welfare organization.
    Outreach Coordinator means an individual or an entity hired by the 
Local Federal Coordinating Committee to conduct marketing activities, 
arrange for events such as Charity Fairs, and educate charities and 
donors regarding the program.
    Services means the real services, benefits, assistance or program 
activities provided by charitable organizations. These may include, but 
are not limited to, medical research and assistance, education, 
financial assistance, mentoring, conservation efforts, spiritual 
development, the arts, and advocacy.
    Solicitation means any action requesting a monetary donation, 
either by payroll deduction or credit card, on behalf of charitable 
organizations.


Sec.  950.102  Scope of the Combined Federal Campaign.

    (a) The CFC is the only authorized solicitation of employees in the 
Federal workplace on behalf of charitable organizations. A campaign may 
be conducted only during the period running from September 1 through 
January 15, as determined by the Director. It must be conducted at 
every Federal agency in accordance with the regulations in this part. 
No other monetary solicitation on behalf of charitable organizations 
may be conducted in the Federal workplace, except as follows:
    (1) Federal agencies must provide information about the CFC to new 
employees at orientation. New employees may make pledges within 30 days 
of entry on duty, if outside of the campaign period.
    (2) The Director may grant permission for solicitations of Federal 
employees, outside the CFC, in support of victims in cases of 
emergencies and disasters. Emergencies and disasters are defined as any 
hurricane, tornado storm, flood, high water, wind-driven water, tidal 
wave, tsunami, earthquake, volcanic eruption, landslide, mudslide, 
snowstorm, drought, fire, explosion, or other catastrophe in any part 
of the world. Any special solicitations will be managed through a 
Disaster Relief Program developed by OPM.
    (b) The regulations in this part do not apply to the collection of 
gifts-in-kind, such as food, clothing and toys, or to the solicitation 
of Federal employees outside of the Federal workplace as defined by the 
applicable Agency Head consistent with General Services Administration 
regulations and any other applicable laws or regulations.
    (c) The Director may exercise general supervision over all 
operations of the CFC, and take all necessary steps to ensure the 
achievement of campaign objectives, including but not limited to the 
following:
    (1) Any disputes relating to the interpretation or implementation 
of this part may be submitted to the Director for resolution. The 
decisions of the Director are final for administrative purposes.
    (2) The Director may audit, investigate, and report on the 
administration of any campaign, the organization that administers the 
campaign, and any national, international and local federation, 
federation member or independent organization that participates in the 
campaign for compliance with these regulations. The Director may 
resolve any issues reported and assess sanctions or penalties, as 
warranted under Sec.  950.503.
    (d) Current Federal civilian and active duty military employees may 
make contributions using payroll deduction or by electronic means, 
including credit/debit cards and e-checks, as approved by the Director. 
Contractor personnel, credit union employees and other persons present 
on Federal premises, as well as retired Federal employees, may make 
single contributions to the CFC by electronic means, including credit 
cards, as approved by the Director. For the first five campaign periods 
after implementation of these regulations, LFCCs will be permitted to 
still provide donors the option of using non-electronic pledging based 
on guidance issued by OPM.
    (e) Heads of departments or agencies may establish policies and 
procedures applicable to solicitations conducted by organizations 
composed of civilian employees or members of the uniformed services 
among their own members for organizational support or for the benefit 
of welfare funds for their members. Such solicitations are not subject 
to these regulations, and therefore do not require permission of the 
Director.


Sec.  950.103  Establishing Local Federal Coordinating Committees.

    (a) The Director, in his or her sole discretion, will establish, 
maintain, and, from time to time, revise an official list of campaign 
zones.
    (b) For each campaign zone, the Director will establish a Local 
Federal Coordinating Committee (LFCC) for the purpose of governing the 
campaign for that zone. It will be the responsibility of the Federal 
Executive Board or lead agency (as identified by the Director) in the 
zone to ensure an active and diverse membership, with a minimum of 
three members. The LFCC shall consist of the following:
    (1) Members to be drawn from local Federal inter-agency 
organizations, such as Federal Executive Boards, or from personnel 
assigned to the military installation and/or agency identified as the 
lead agency in that zone;
    (2) Representation from local Federal Agencies located within the 
zone, representing a cross-section of agencies with regard to personnel 
types and locations; and
    (3) If approved by the Director, representatives of employee unions 
and other employee groups.
    (c) The members of each LFCC must select a Chair and a Vice Chair. 
The Chair and Vice Chair positions will be rotated among the LFCC 
members. The term of the Chair and Vice Chair may not exceed three 
consecutive years. Any LFCC Chair or Vice Chair is subject to removal 
by the Director, in his sole and unreviewable discretion.
    (d) The LFCC will ensure that, to the extent reasonably possible, 
every employee is given the opportunity to participate in the CFC.


Sec.  950.104  Local Federal Coordinating Committee responsibilities.

    (a) The LFCC is to serve as the central source of information 
regarding the CFC among Federal employees in their zone. All members of 
the LFCC must develop an understanding of campaign regulations and 
procedures.
    (b) The responsibilities of the LFCC members include, but are not 
limited to, the following:
    (1) Attend required LFCC training and obtain certification in LFCC 
operations;
    (2) Maintain minutes of LFCC meetings and respond promptly to any 
request for information from the Director;
    (3) Name a LFCC Chair and Vice Chair and notify the Director when 
there is a change in either position;
    (4) Assist in determining the eligibility of organizations that 
apply to participate in the campaign as required and assigned by OPM;

[[Page 21588]]

    (5) Provide training to employees in the methods of non-coercive 
solicitation;
    (6) Provide instructions to employees regarding the process for 
making donations and designating the charitable organizations to 
receive their donations.
    (7) Take appropriate measures to protect potential donors from 
coercion to participate in the campaign.
    (8) Bring any allegations of potential donor coercion to the 
attention of the employee's agency and provide a mechanism to review 
employee complaints of undue coercion in Federal fundraising. Federal 
agencies shall provide procedures and assign responsibility for the 
investigation of such complaints. The agency official responsible for 
conducting the campaign is responsible for informing employees of the 
proper channels for pursuing such complaints.
    (9) Notify the Director of issues concerning the campaign that the 
LFCC cannot resolve by applying these regulations. The LFCC must abide 
by the Director's decisions on all matters concerning the campaign.
    (10) Review, approve and provide authorization to the Central 
Campaign Administrator for payments to the outreach coordinator in an 
efficient and effective manner as outlined in the agreement between OPM 
and the Central Campaign Administrator.
    (11) Conduct an effective and efficient campaign in a fair and 
even-handed manner aimed at collecting the greatest amount of 
charitable contributions possible. LFCC's should afford federated 
groups and agencies with representatives in the campaign area adequate 
opportunity to offer suggestions relating to the operation of the 
campaign.
    (c) The LFCC may hire an Outreach Coordinator to provide local 
operation marketing support to their campaign, including developing 
marketing plans and materials, employee training, campaign event and 
activity support, and the printing and distribution of CFC Charity 
Lists and pledge forms as permitted in 5 CFR Sec.  950.102(d).
    (d) Monitor the work of the Outreach Coordinator, ensuring 
compliance with these regulations, as well as performance as outlined 
in agreement with the LFCC.


Sec.  950.105  Federal Agency Head responsibilities.

    (a) The agency head at each Federal installation within a campaign 
area should:
    (1) Become familiar with all CFC regulations.
    (2) Cooperate with the members of the LFCC in organizing and 
conducting the campaign.
    (3) Initiate official campaigns within their offices or 
installations and provide support for the campaign.
    (4) Assure the campaign is conducted in accordance with these 
regulations.
    (5) Appoint an employee to oversee the Agency campaign.
    (6) Establish a network of employees in support of the Agency's 
campaign.
    (b) Agency heads may not discontinue solicitation of Federal 
employees during the campaign solicitation period within their 
organization without the written approval of the Director.


Sec.  950.106  Central Campaign Administrator (CCA).

    (a) OPM may contract with one or more organizations classified by 
the Internal Revenue Service as 501(c)(3) organizations, to perform the 
centralized fiscal and administrative functions of the CFC. One 
organization will be responsible for developing and maintaining a 
centralized Web site for the CFC that will include an online 
application function for charities applying to participate in the CFC 
and an online pledging function for Federal donor use. All 
organizations will be responsible for disbursing funds received from 
the Federal payroll offices or service providers. If OPM contracts with 
more than one organization, the disbursement responsibilities will be 
divided between them based on Federal Shared Service Centers and 
Federal payroll offices. For example, if OPM contracts with four 
organizations, one would handle all agencies that use the National 
Finance Center as their Shared Service Center regardless of the 
location of the donor or the agency. Only non-CFC participating 
organizations may be selected as CCAs.
    (b) In the event that there is no qualified CCA, no workplace 
solicitation of any Federal employee may be authorized and CFC payroll 
allotments would not be accepted or honored.


Sec.  950.107  Campaign expense recovery.

    (a) The costs of outreach approved by the LFCC, training and 
traveling for the LFCC, and CCA will be recovered through application/
listing fees and/or distribution fees paid by charitable organizations 
. The fee structure will be determined annually by the Director based 
on estimated costs of administering the central campaign and local 
marketing efforts. This structure will be announced no later than 
October 31 of the year preceding the campaign. Any excess funds from 
applications fees over expenses will be rolled over to the following 
campaign and be considered when setting the rates. Marketing expenses 
will not exceed a percentage of receipts as determined by the Director. 
No expenses for food or entertainment may be reimbursed to the Outreach 
Coordinator. Only travel-related food expenses may be reimbursed to the 
LFCC in accordance with the Federal Travel Regulations.
    (b) Charity application fees are due at the time of the filing of 
the application or the application deadline, whichever occurs last. A 
charity that has not paid the full application fee at that time may not 
participate in the CFC that campaign year.
    (c) An additional listing fee will be applied to all charities 
approved for participation. These charities will not be listed in paper 
or electronic Charity Lists, and CFC contributions will not be 
processed on their behalf, if they do not submit the listing fee prior 
to the annual date set by OPM.
    (d) The distribution fee will be assessed against pledges received 
should the application and listing fees not cover all the costs of the 
campaign.


Sec.  950.108  Preventing coercive activity.

    True voluntary giving is fundamental to Federal fundraising 
activities. Actions that do not allow free choices or create the 
appearance that employees do not have a free choice to give or not to 
give, or to publicize their gifts or to keep them confidential, are 
contrary to Federal fundraising policy. Activities contrary to the non-
coercive intent of Federal fundraising policy are not permitted in 
campaigns. They include, but are not limited to:
    (a) Solicitation of employees by their supervisor or by any 
individual in their supervisory chain of command. This does not 
prohibit the head of an agency to perform the usual activities 
associated with the campaign kick-off and to demonstrate his or her 
support of the CFC in employee newsletters or other routine 
communications with the Federal employees.
    (b) Supervisory inquiries about whether an employee chose to 
participate or not to participate or the amount of an employee's 
donation. Supervisors may be given nothing more than summary 
information about the major units that they supervise.
    (c) Setting of 100 percent participation goals.
    (d) Establishing personal dollar goals and quotas.
    (e) Developing and using lists of non-contributors.
    (f) Providing and using contributor lists for purposes other than 
the routine

[[Page 21589]]

collection and forwarding of contributions and allotments, and as 
allowed under Sec.  950.501.
    (g) Using as a factor in a supervisor's performance appraisal the 
results of the solicitation in the supervisor's unit or organization.


Sec.  950.109  Avoidance of conflict of interest.

    Any Federal employee who serves on the LFCC, or as a Federal agency 
fundraising program employee, shall not serve in any official capacity 
or participate in any decisions where, because of membership on the 
board or other affiliation with a charitable organization, there could 
be or appear to be a conflict of interest under any statute, 
regulation, Executive order, or applicable agency standards of conduct.


Sec.  950.110  CCA Prohibited discrimination.

    Discrimination for or against any individual or group on account of 
race, ethnicity, color, religion, sex (including pregnancy and gender 
identity), national origin, age, disability, sexual orientation, 
genetic information, or any other non-merit-based factor is prohibited 
in all aspects of the management and the execution of the CFC. Nothing 
herein denies eligibility to any organization, which is otherwise 
eligible under this part to participate in the CFC, merely because such 
organization is organized by, on behalf of, or to serve persons of a 
particular race, ethnicity, color, religion, sex, gender identity, 
national origin, age, disability, sexual orientation, or genetic 
background.

Subpart B--Eligibility Provisions


Sec.  950.201  Charity eligibility.

    (a) The Director shall annually:
    (1) Determine the timetable and other procedures regarding 
application for inclusion in the Charity List; and
    (2) Determine which organizations among those that apply qualify to 
be included in the National/International, International and Local 
parts of the Charity List. In order to determine whether an 
organization may participate in the campaign, the Director may request 
evidence of corrective action regarding any prior violation of 
regulation or directive, sanction, or penalty, as appropriate. The 
Director retains the ultimate authority to decide whether the 
organization has demonstrated, to the Director's satisfaction, that the 
organization has taken appropriate corrective action. Failure to 
demonstrate satisfactory corrective action or to respond to the 
Director's request for information within 10 business days of the date 
of the request may result in a determination that the organization will 
not be included in the Charity List.
    (b) The Charity List will include each organization's CFC code and 
other information as determined by OPM.
    (c) A charity must submit the full application the initial year it 
applies to participate in the CFC. In lieu of a full application, a 
charity may submit a verification application for the two years 
immediately following its submission of a full application.
    (1) A verification application consists of certification of all 
applicable statements required by Sec. Sec.  950.202 and 950.203, and 
submission of an IRS Form 990 or pro forma IRS Form 990, as defined in 
Sec.  950.203(a)(3).
    (2) An organization that did not apply or was not approved for 
participation in the preceding campaign must submit a full application.


Sec.  950.202  Charity eligibility requirements.

    (a) The requirements for an organization to be listed in the 
Charity List shall include the following:
    (1) Certification that it provides or conducts real services, 
benefits, assistance, or program activities (hereafter listed as 
``services''), in 15 or more different states or one or more foreign 
countries over the 3 calendar year period immediately preceding January 
1 of the campaign application year. A schedule listing a detailed 
description of the services in each state (minimum 15) or foreign 
countries (minimum 1), including the year of service and documenting 
the location and date and year of each service, and the number of 
beneficiaries of each such service must be included with the CFC 
application. The schedule must make a clear showing of national or 
international presence. Broad descriptions of services and identical 
repetitive narratives will not be accepted in the sole discretion of 
OPM if they do not allow OPM to adequately determine that real services 
were provided or to accurately determine the individuals or entities 
who benefited. It must be clear in the documentation submitted that the 
organization provided at least one human health and welfare service in 
the calendar year prior to the year for which the organization is 
applying. Publications or other documents in lieu of a schedule 
detailing this information are not acceptable.
    (i) Local charitable organizations are not required to have 
provided services in 15 states or a foreign country over the prior 3 
years. The schedule for local organizations is only required to 
document services in their local area. Local organizations must also 
certify that the Organization Address submitted with the application is 
the primary location where the organization's services are rendered 
and/or its records are maintained.
    (ii) This requirement cannot be met solely by the provision of 
services via telephone, unless the service is emergency in nature such 
as a suicide prevention hotline. The requirement is also not met solely 
by disseminating information and publications via the U.S. Postal 
Service or the Internet, unless it meets the criteria for web- based 
services as described in Sec.  950.202(a)(1)(iii), or a combination 
thereof.
    (iii) Real services for web-based service organizations may be 
considered if the organization provides service logs or other records 
indicating the geographic distribution of users in each state. The 
organization must demonstrate the scope of services received by users 
over the three-year period immediately preceding the start of the 
campaign year involved. Reports that reflect only the number of hits or 
visits to a Web site are not sufficient to establish the provision of 
real services. In addition, two of the three following types of 
information must be provided to demonstrate the provision of real 
services, benefits, assistance, or program activities:
    (A) Evidence that recipients, including members of the general 
public, dues paying members or affiliate organizations, have registered 
for use of the Web site;
    (B) Summary reports that document customer feedback, through 
service satisfaction or utilization surveys, demonstration of two-way 
communications, such as an online class, or other mechanisms; and
    (C) Documented evidence that recipients of web-based services paid 
a fee for the service.
    (iv) Providing listings of affiliated groups does not demonstrate 
provision of real services by the applicant. Location of residence of 
organization members or location of residence of visitors to a facility 
does not substantiate provision of services. Schedules that describe 
activities conducted by an entity other than the applicant, such as a 
chapter or a support group, must include information documenting the 
applicant's role in the delivery of the service. Details may include 
items such as whether the chapter is funded by the applicant or how the 
applicant assisted in the delivery of the service. Applications that 
fail to include a description of how

[[Page 21590]]

the applicant itself provides service may result in a denial.
    (v) Organizations that provide student scholarships or fellowships 
must indicate the state in which the recipient resides, not the state 
of the school or place of fellowship. Mere dissemination of information 
does not demonstrate acceptable provision of real services.
    (vi) While it is not expected that an organization maintain an 
office in each state or foreign country, a clear showing must be made 
of the actual services, benefits, assistance or activities provided in 
each state or foreign country. Organizations that provide services in 
one location may only count the state in which the services are 
provided toward their eligibility to participate on the national 
charity list. However, an organization may have beneficiaries from 
several states and want service to those beneficiaries considered 
toward the 15-state requirement to participate on the national Charity 
List. If an organization can document that the services are subsidized 
or were provided free-of-charge, and list the value of those services 
to each of the beneficiaries, then the service to the beneficiary may 
be considered a service in the state of the beneficiary's residence, 
similar to a financial grant or scholarship. For example, a medical 
institution providing free housing to family members of the patient 
during the length of the patient's stay must list the location of the 
medical institution, the city/state of residence of each beneficiary, 
the dates of service, and the value of the housing provided to each 
beneficiary's family members.
    (vii) An organization's role in providing information to the media, 
such as authorship of an article for a newspaper, magazine, or journal, 
or serving as an interviewee or reference for a television news 
program, or the authorship of a book, does not in itself constitute a 
real service for CFC purposes. Likewise, the production and/or 
distribution of information, such as a report based on research, 
surveys conducted by the applicant organization, or publication of a 
policy position paper, does not, in itself, constitute an eligible 
service. With regard to media-related activities, research, and 
reports, the applicant must describe the manner in which beneficiaries 
requested or used the document or information in order to establish the 
provision of a real services, benefit, assistance, or program activity.
    (viii) De minimis services, benefits, assistance, or other program 
activities in any state or foreign country will not be accepted as a 
basis for qualification as a national or international organization. 
Factors that OPM will consider in determining whether an organization's 
services, benefits, assistance or other program activities are de 
minimis include, but are not limited to: nature and extent of the 
service, benefit, assistance or activity; frequency, continuity, and 
duration; value of financial assistance awarded to individuals or 
entities; impact on, or benefit to, beneficiaries; and number of 
beneficiaries.
    (2) Certification that it is an organization recognized by the 
Internal Revenue Service as tax exempt under 26 U.S.C. 501(c)(3) to 
which contributions are deductible under 26 U.S.C. 170(c)(2). The CFC 
will verify that each applicant's name and Employer Identification 
Number appears in the IRS Business Master File (BMF). If the 
organization does not appear in the BMF, one of the following must 
accompany the application:
    (i) An affirmation letter from the IRS, dated on or after January 1 
of the campaign year to which the organization is applying, that 
verifies the organization's current 501(c)(3) tax-exempt status.
    (ii) A local affiliate of a national organization that is not 
separately incorporated must submit a certification from the Chief 
Executive Officer (CEO) or CEO equivalent of the national organization 
stating that it operates as a bonafide chapter or affiliate in good 
standing of the national organization and is covered by the national 
organization's 26 U.S.C. 501(c)(3) tax exemption. The letter must be 
signed and dated on or after October 1 of the calendar year preceding 
the campaign year for which the organization is applying.
    (iii) For central organizations that are churches, the CFC will 
accept a copy of its most recently published listing (such as a church 
directory) of section 501(c)(3) organizations that are included in the 
group exemption held by the central organization. A subordinate may 
alternatively obtain a letter from the central organization affirming 
the subordinate's status as an organization exempt under section 
501(c)(3) of the Internal Revenue Code that is included in the group 
exemption held by the central organization.
    (iv) Family Support and Youth Activities (FSYA) located on military 
installations in the United States and Family Support and Youth 
Programs (FSYP) located on military installations overseas must provide 
a copy of certification by the commander of a military installation, as 
outlined in paragraphs (a)(3) and (4) of this section, to demonstrate 
tax-exempt status.
    (3) Family support and youth activities or programs certified by 
the commander of a military installation as meeting the eligibility 
criteria contained in paragraphs (a)(3) and (4) of this section may 
appear on the list of local organizations and be supported from CFC 
funds. Family support and youth activities may participate in the CFC 
as a member of a federation at the discretion of the certifying 
commander.
    (4) A family support and youth activity or program must:
    (i) Be a nonprofit, tax-exempt organization that provides family 
service programs or youth activity programs to personnel in the Command 
and be a Non-Appropriated Fund Instrumentality that supports the 
installation MWR/FSYA/FSYP program. The activity must not receive a 
majority of its financial support from appropriated funds.
    (ii) Have a high degree of integrity and responsibility in the 
conduct of their affairs. Contributions received must be used 
effectively for the announced purposes of the organization.
    (iii) Be directed by the base Non-Appropriated Fund Council or an 
active voluntary board of directors which serves without compensation 
and holds regular meetings.
    (iv) Conduct its fiscal operations in accordance with a detailed 
annual budget, prepared and approved at the beginning of the fiscal 
year. Any significant variations from the approved budget must have 
prior authorization from the Non-Appropriated Fund Council or the 
directors. The family support and youth activities must have accounting 
procedures acceptable to an installation auditor and the inspector 
general.
    (v) Have a policy and practice of nondiscrimination on the basis of 
race, color, religion, sex, sexual orientation, gender identity or 
national origin applicable to persons served by the organization.
    (vi) Prepare an annual report which includes a full description of 
the organization's activities and accomplishments. These reports must 
be made available to the public upon request.


Sec.  950.203  Public accountability standards.

    (a) To ensure organizations wishing to solicit donations from 
Federal employees in the workplace are portraying accurately their 
programs and benefits, each organization seeking eligibility must meet 
annually applicable standards and certification requirements. Each 
organization, other

[[Page 21591]]

than FSYA or FSYP, wishing to participate must:
    (1) Certify that the organization is a human health and welfare 
organization providing services, benefits, or assistance to, or 
conducting activities affecting, human health and welfare. The 
organization's application must provide documentation describing the 
health and human welfare benefits provided by the organization within 
the previous calendar year;
    (2) Subject to the exceptions listed in this section, certify that 
it accounts for its funds on an accrual basis in accordance with United 
States or International generally accepted accounting principles and 
that an audit of its fiscal operations is completed annually by an 
independent certified public accountant in accordance with generally 
accepted auditing standards. A copy of the organization's most recent 
annual audited financial statements must be included with the 
application. The statements must include all statements required for 
voluntary health and welfare organizations by the United States 
Financial Accounting Standards Board or the International Accounting 
Standards Board. The audited financial statements must cover the fiscal 
period ending not more than 18 months prior to the January of the year 
of the campaign for which the organization is applying. For example, 
the audited financial statements included in the 2014 application must 
cover the fiscal period ending on or after June 30, 2012.
    (i) An organization with annual revenue of less than $100,000 
reported on its IRS Form 990 or pro forma IRS Form 990 submitted to the 
CFC is not required to undergo an audit, submit audited financial 
statements, or to account for its funds on an accrual basis in 
accordance with generally accepted accounting principles. Rather, the 
organization must certify that it has controls in place to ensure that 
funds are properly accounted for and that it can provide accurate and 
timely financial information to interested parties.
    (ii) An organization with annual revenue of at least $100,000 but 
less than $250,000 is not required to undergo an audit. The 
organization must certify that its financial statements are reviewed by 
an independent certified public accountant on an annual basis or are 
audited by an independent public accountant on an annual basis. A copy 
of the reviewed or audited financial statements must be included with 
the application.
    (3) Certify that it prepares and submits to the IRS a complete copy 
of the organization's IRS Form 990 or that it is not required to 
prepare and submit an IRS Form 990 to the IRS. Provide a completed copy 
of the organization's IRS Form 990 submitted to the IRS covering a 
fiscal period ending not more than 18 months prior to the January of 
the year of the campaign for which the organization is applying, 
including signature, and all supplemental schedules, with the 
application, or if not required to file an IRS Form 990, provide a pro 
forma IRS Form 990. Pro forma IRS Form 990 instructions will be posted 
on the OPM Web site and included in the application instructions. IRS 
Forms 990EZ, 990PF, and comparable forms are not acceptable 
substitutes. The IRS Form 990 and audited financial statements, if 
required, must cover the same fiscal period.
    (4) Provide a computation of the organization's percentage of total 
support and revenue spent on administrative and fundraising. This 
percentage shall be computed from information on the IRS Form 990 
submitted pursuant to paragraph (a)(3) of this section.
    (5) Certify that the organization is directed by an active and 
responsible governing body whose members have no material conflict of 
interest and, a majority of which serve without compensation.
    (6) Certify that the organization's fundraising practices prohibit 
the sale or lease of its CFC contributor lists.
    (7) Certify that its publicity and promotional activities are based 
upon its actual program and operations, are truthful and non-deceptive, 
and make no exaggerated or misleading claims.
    (8) Certify that contributions are effectively used for the 
announced purposes of the charitable organization.
    (9) Provide a statement that the certifying official is authorized 
by the organization to certify and affirm all statements required for 
inclusion on the Charity List.
    (b) The Director shall review these applications for accuracy, 
completeness, and compliance with these regulations. Failure to supply 
any of this information may be judged a failure to comply with the 
requirements of public accountability, and the charitable organization 
may be ruled ineligible for inclusion on the Charity List.
    (c) The Director may request such additional information as the 
Director deems necessary to complete these reviews. An organization 
that fails to comply with such requests within 10 calendar days from 
the date of receipt of the request may be judged ineligible.
    (d) The required certifications and documentation must have been 
completed and submitted prior to the application filing deadline.
    (e) The Director may waive any of these standards and 
certifications upon a showing of extenuating circumstances.


Sec.  950.204  Eligibility decisions and appeals.

    (a) Organizations applying for participation in the CFC will be 
notified of the eligibility decision electronically via the email 
address(es) listed in the charity application.
    (b) Organizations that apply and are denied eligibility for 
inclusion on the Charity List may appeal the decision by submitting a 
request for reconsideration. This request must be received within 10 
business days from the date the decision to deny eligibility was sent 
via email and shall be limited to those facts justifying the reversal 
of the original decision.
    (c) All appeals must:
    (1) Be in writing;
    (2) Be received by the Director within 10 business days of the date 
the decision to deny the application was sent via email;
    (3) Include a statement explaining the reason(s) why eligibility 
should be granted; and
    (4) Include a copy of the communication from OPM disapproving the 
original application and supporting information to justify the reversal 
of the original decision.
    (d) Applications or appeals of an adverse eligibility determination 
must be submitted in a timely manner as indicated above.
    (e) Appeals may not be used to supplement applications with 
documents that did not exist or were not set forth in final form prior 
to the application deadline. For example, audited financial statements 
that were not prepared or were in draft form at the time of the 
deadline cannot be used to document eligibility. Similarly, charities 
that had applied for, but had not obtained, 501(c)(3) status from the 
IRS by the CFC application deadline are not eligible to participate for 
that campaign year.
    (f) The Director's decision is final for administrative purposes.

Subpart C--Federations


Sec.  950.301  Federation eligibility.

    (a) The Director may recognize federations that conform to the 
requirements set by the Director and are eligible to receive 
designations. In order to determine whether the Director will recognize 
a federation, the Director may request evidence of corrective action 
regarding any prior violation of regulation or directive, sanction, or

[[Page 21592]]

penalty, as appropriate. The Director retains the ultimate authority to 
decide whether the federation has demonstrated, to the Director's 
satisfaction, that the federation has taken appropriate corrective 
action. Failure to demonstrate satisfactory corrective action or to 
respond to the Director's request for information within 10 business 
days of the date of the request may result in a determination that the 
federation will not be included in the Charity List. The Director also 
reserves the authority to place a moratorium on the recognition of 
federations from time to time.
    (b) By applying for inclusion in the CFC, federations consent to 
allow the Director complete access to its and its members' CFC books 
and records and to respond to requests for information by the Director.
    (c) An organization may apply to the Director for inclusion as a 
federation to participate in the CFC if the applicant has, as members 
of the proposed federation, 15 or more charitable organizations, in 
addition to the federation itself, that meet the eligibility criteria 
of Sec. Sec.  950.202 and 950.203. The federation must submit the 
applications of all its proposed member organizations annually.
    (d) After an organization has been granted federation status, it 
may certify that its member organizations meet all eligibility criteria 
of Sec.  950.202 and Sec.  950.203 to be included on the Charity List. 
Federation status in a prior campaign is not a guarantee of federation 
status in a subsequent campaign. Failure to meet minimum federation 
eligibility requirements shall not be deemed to be a withdrawal of 
federation status subject to a hearing on the record.
    (e) An applicant for federation status must annually certify and/or 
demonstrate:
    (1) That all member organizations seeking participation in the CFC 
are qualified for inclusion on the National/International or 
International or Local part of the Charity List. Applicants must 
provide a complete list of those member organizations it certified in 
addition to each organization's complete application.
    (2) That it meets the eligibility requirements and public 
accountability standards contained in Sec.  950.202 and Sec.  950.203. 
The federation can demonstrate that it has met the eligibility 
requirement in Sec.  950.202(a) either through its own services, 
benefits, assistance or program activities or through its 15 members' 
activities.
    (i) The federation must complete the certification set forth at 
Sec.  950.203(a)(2) without regard to the amount of revenue reported on 
its IRS Form 990 and must provide a copy of its audited financial 
statements. The audited financial statements provided must verify that 
the federation is honoring designations made to each member 
organization by distributing a proportionate share of receipts based on 
donor designations to each member. The audit requirement is waived for 
newly created federations operating for less than two years from the 
date of its IRS tax-exemption letter to the closing date of the CFC 
application period.
    (ii) The federation must provide a listing of its board of 
directors, beginning and ending dates of each member's current term of 
office, and the board's meeting dates and locations for the calendar 
year prior to the year of the campaign for which the organization is 
applying.
    (3) That it does not employ in its CFC operations the services of 
private consultants, consulting firms, advertising agencies or similar 
business organizations to perform its policy-making or decision-making 
functions in the CFC. It may, however, contract with entities or 
individuals such as banks, accountants, lawyers, and other vendors of 
goods and/or services to assist in accomplishing its administrative 
tasks.
    (f) The Director will notify a federation if it is determined that 
the federation does not meet the eligibility requirements of this 
section. A federation may appeal an adverse eligibility decision in 
accordance with Sec.  950.204.
    (g) The Director may waive any eligibility criteria for federation 
status if it is determined that such a waiver will be in the best 
interest of the CFC.
    (h) Two organizations--American Red Cross and United Service 
Organization--are exempt from the 15- member requirement of paragraph 
(c) of this section.


Sec.  950.302  Responsibilities of federations.

    (a) Federations must ensure that only those member organizations 
that comply with all eligibility requirements included in these 
regulations are certified for participation in the CFC.
    (b) The Director may elect to review, accept or reject the 
certifications of the eligibility of the members of federations. If the 
Director requests information supporting a certification of 
eligibility, that information shall be furnished promptly. Failure to 
furnish such information within 10 business days of the receipt of the 
request constitutes grounds for the denial of national eligibility of 
that member.
    (c) Each federation, as fiscal agent for its member organizations, 
must ensure that Federal employee designations are honored in that each 
member organization receives its proportionate share of receipts based 
on the results of each individual campaign. The proportionate share of 
receipts is determined by donor designations to the individual member 
organization as compared to total campaign designations.
    (d) Federations must disburse CFC funds to each member organization 
without any further deductions. Membership dues, fees, or other charges 
to member organizations must be assessed outside of the CFC 
disbursement process.
    (e) Federations must disburse CFC funds to member organizations on 
a quarterly basis, at a minimum. The disbursements must be made within 
the months of June, September, December, and March.
    (f) Disbursements to federation members that include funds from a 
non- CFC campaign must include a report that clearly identifies the 
amount of CFC funds.

Subpart D--Campaign Information


Sec.  950.401  Campaign and publicity information.

    (a) The specific campaign marketing and publicity information will 
be developed locally, except as specified in the regulations in this 
subpart. All information must be reviewed and approved by the LFCC for 
compliance with these regulations and will be developed and supplied by 
the LFCC or contracted agent.
    (b) During the CFC solicitation period, a participating CFC 
organization may distribute bona fide educational information 
describing its services or programs. The organization must be granted 
permission by the Federal agency installation head, or designee to 
distribute the material. CFC Coordinators, Keyworkers, other employees 
or members of the LFCC, are not authorized to grant permission for the 
distribution of such information. If one organization is granted 
permission to distribute educational information, then the Federal 
agency installation head must allow any other requesting CFC 
organization to distribute educational information.
    (c) Organizations and federations are encouraged to publicize their 
activities outside Federal facilities and to broadcast messages aimed 
at Federal employees in an attempt to solicit their contributions 
through the media and other outlets.

[[Page 21593]]

    (d) Agency Heads are further authorized to permit the distribution 
by organizations of promotional information to Federal personnel in 
public areas of Federal workplaces in connection with the CFC, provided 
that the manner of distribution accords equal treatment to all 
charitable organizations furnishing such information for local use, and 
further provided that no such distribution shall utilize Federal 
personnel on official duty or interfere with Federal government 
activities. LFCC members and other campaign personnel are to be 
particularly aware of the prohibition of assisting any charitable 
organization or federated group in distributing any type of literature, 
especially during the campaign. Nothing in this section shall be 
construed to require a LFCC to distribute or arrange for the 
distribution of any material other than LFCC approved marketing 
materials.
    (e) The Campaign Charity List and pledge form are the official 
sources of CFC information and shall be made available in electronic 
format to all potential contributors. The Charity List and pledging 
system must inform employees of their right to make a choice to 
contribute or not to contribute.
    (f) Campaign marketing materials must be comprised of a simple and 
attractive design that is donor focused and has fundraising appeal and 
essential working information. The design must focus on the CFC without 
undue use of charitable organization symbols and logos or other 
distractions that compete for the donor's attention.
    (g) The following applies specifically to the campaign Charity 
List:
    (1) OPM will provide the approved Charity List as well as general 
campaign information. This will include:
    (i) An explanation of the payroll deduction privilege.
    (ii) A description and explanation of other electronic pledging, to 
include credit cards.
    (iii) A statement that the donor may only designate charitable 
organizations or federations that are listed in the Charity List and 
that write-ins are prohibited.
    (iv) Instructions as to how an employee may obtain more specific 
information about the programs and the finances of the organizations 
participating in the campaign.
    (v) A description of employees' rights to pursue complaints of 
undue pressure or coercion in Federal fundraising activities.
    (2) The Charity List will consist of National/International, 
International, and Local organizations. The order of these 
organizations will be rotated annually in accordance with OPM 
instructions. The order of listing of the federated and independent 
organizations will be determined by a random selection process. The 
order of organizations within each federation will be determined by the 
federation. The order within the National/International, International 
and Local independent groups will be alphabetical. Absent specific 
instructions from OPM to the contrary, each participating organization 
and federated group listing must include a description, not to exceed 
256 characters, of its services and programs, plus a Web site address 
and telephone number for the Federal donor to obtain further 
information about the group's services, benefits, and administrative 
expenses. Each listing will include the organization's administration 
and fundraising percentage as calculated pursuant to Sec.  
950.203(a)(4). Neither the percentage of administrative and fundraising 
expenses, nor the Web site address or telephone number count toward the 
256 character description.
    (3) Each federation and charitable organization will be assigned a 
code in a manner determined by the Director. At the beginning of each 
federated group's listing will be the federation's name, code number, 
256 character description, percentage of administrative and fundraising 
expenses, Web site address and telephone number. Each organization will 
be identified as National/International, International and Local, 
respectively.
    (h) Listing of national and local affiliate. Listing of a national 
organization, as well as its local affiliate organization, is 
permitted. Each national or local organization must individually meet 
all of the eligibility criteria and submit independent documentation as 
required in Sec.  950.202 and Sec.  950.203 to be included in the 
Charity List. However, a local affiliate of a national organization 
that is not separately incorporated, in lieu of its own 26 U.S.C. 
501(c)(3) tax exemption letter and, to the extent required by Sec.  
950.203(a)(2), audited financial statements, may submit the national 
organization's 26 U.S.C. 501(c)(3) tax exemption letter and audited 
financial statements, but must provide its own pro forma IRS Form 990, 
as defined in Sec.  950.203(a)(3), for CFC purposes. The local 
affiliate must submit a certification from the Chief Executive Officer 
(CEO) or CEO equivalent of the national organization stating that it 
operates as a bonafide chapter or affiliate in good standing of the 
national organization and is covered by the national organization's 26 
U.S.C. 501(c)(3) tax exemption, IRS Form 990 and audited financial 
statements.
    (i) Listing local offices. Listing of a local organization, as well 
as its satellite offices, is permitted, as long as there is no more 
than one location within a county or parish. Each office must 
individually meet all of the eligibility criteria and submit 
independent documentation as required in Sec.  950.202 and Sec.  
950.203 to be included in the Charity List. However, a satellite office 
that is not separately incorporated, in lieu of its own 26 U.S.C. 
501(c)(3) tax exemption letter and, to the extent required by Sec.  
950.203(a)(2), audited financial statements, may submit the local 
organization's 26 U.S.C. 501(c)(3) tax exemption letter and audited 
financial statements, but must provide its own pro forma IRS Form 990, 
as defined in Sec.  950.203(a)(3), for CFC purposes. The satellite 
office must submit a certification from the Chief Executive Officer 
(CEO) or CEO equivalent of the local organization stating that it 
operates as a bonafide office in good standing and is covered by the 
local organization's 26 U.S.C. 501(c)(3) tax exemption, IRS Form 990 
and audited financial statements.
    (j) Multiple listing prohibited. Except as provided in paragraphs 
(h) and (i) of this section, once an organization is deemed eligible, 
it is entitled to only one listing in the Charity List, regardless of 
the number of federations to which that organization belongs.


Sec.  950.402  Pledge form.

    (a) The Director will provide guidance with regard to the data 
required for electronic pledge processing.
    (b) An employee may not make a designation to an organization not 
listed in the Charity List. All pledges must be designated to specific 
CFC participating organization(s). No undesignated pledges will be 
allowed.

Subpart E--Miscellaneous Provisions


Sec.  950.501  Release of contributor information.

    (a) The pledge form, designed pursuant to Sec.  950.402, must allow 
a contributor to indicate if the contributor will allow his or her 
name, contribution amount, and home contact information to be forwarded 
to the charitable organization or organizations designated.
    (b) The pledge form shall permit a contributor to specify which 
information, if any, he or she wishes released to organizations 
receiving his or her donations.
    (c) It is the responsibility of the CCA to forward the contributor 
information

[[Page 21594]]

for those who have indicated that they wish this information to be 
released to the recipient organization directly, if the organization is 
independent, and to the organization's federation if the organization 
is a member of a federation. The contributor information must be 
forwarded as soon as practicable after the completion of the campaign, 
but in no case later than a date to be determined by OPM. The date will 
be part of the annual timetable issued by the Director under Sec.  
950.601(b). The federation is responsible for ensuring the information 
is released to the appropriate member organization. The CCA may not 
sell or make any other use of this information. Federations may not 
retain donor information for their own use unless the donor made a 
direct designation to the federation itself. This policy also prohibits 
the sharing of donor information, even free of charge.


Sec.  950.502  Solicitation methods.

    (a) Employee solicitations shall be conducted during duty hours 
using methods that permit true voluntary giving and shall reserve to 
the individual the option of disclosing any gift or keeping it 
confidential. Campaign kick-offs, victory events, awards, and other 
non-solicitation events to build support for the CFC are encouraged.
    (b) Special CFC events are permitted during the campaign if 
approved by the appropriate agency head or government official, 
consistent with agency ethics regulations. No costs for food or 
entertainment at a special event may be charged to the CFC. CFC special 
events must be undertaken in the spirit of generating interest in the 
CFC and be open to all individuals without regard to whether an 
individual participates in the CFC. If prizes are offered, they must be 
modest in nature and value. Examples of appropriate prizes may include 
opportunities for lunch with agency officials, agency parking spaces 
for a specific time period, and gifts of minimal financial value. Any 
special CFC event and associated prize or gift must be approved in 
advance by the Agency's ethics official to ensure that the special 
event is consistent with Office of Government Ethics regulations and 
its own regulations and policy. No funds may be raised or collected at 
these events.


Sec.  950.503  Sanctions and penalties.

    (a)(1) The Director may impose sanctions or penalties on a 
federation, charitable organization or Outreach Coordinator for 
violating these regulations, other applicable provisions of law, or any 
directive or instruction from the Director. The Director will determine 
the appropriate sanction and/or penalty, up to and including expulsion 
from the CFC. In determining the appropriate sanction and/or penalty, 
the Director will consider previous violations, harm to Federal 
employee confidence in the CFC, and any other relevant factors. A 
federation, charitable organization or Outreach Coordinator will be 
notified in writing of the Director's intent to sanction and/or 
penalize and will have 10 business days from the date of receipt of the 
notice to submit a written response. The Director's final decision will 
be communicated in writing to the federation, charitable organization 
or marketing organization.
    (2) The Director may withdraw federation status with respect to a 
National/International, International or Local federation that makes a 
false certification or fails to comply with any directive of the 
Director, or to respond in a timely fashion to a request by the 
Director for information or cooperation, including with respect to an 
investigation or in the settlement of disbursements. As stated in Sec.  
950.301(d), failure to meet minimum federation eligibility requirements 
shall not be deemed to be a withdrawal of federation status subject to 
a hearing on the record. Eligibility decisions shall follow the 
procedures in Sec.  950.301(f). A federation will be notified in 
writing of the Director's intent to withdraw federation status for a 
period of up to one campaign and will have 10 business days from the 
date of receipt of the notice to submit a written response. On receipt 
of the response, or in the absence of a timely response, the Director 
or representative shall set a date, time, and place for a hearing. The 
federation shall be notified at least 10 business days in advance of 
the hearing. A hearing shall be conducted by a hearing officer 
designated by the Director unless it is waived in writing by the 
federation. After the hearing is held, or after the Director's receipt 
of the federation's written waiver of the hearing, the Director shall 
make a final decision on the record, taking into consideration the 
recommendation submitted by the hearing officer. The Director's final 
decision will be communicated in writing to the federation.
    (3) A federation, charitable organization or Outreach Coordinator 
sanctioned or penalized under any provision of these regulations must 
demonstrate to the satisfaction of the Director that it has taken 
corrective action to resolve the reason for sanction and/or penalty and 
has implemented reasonable and appropriate controls to ensure that the 
situation will not occur again prior to being allowed to participate in 
subsequent CFCs.
    (b) At the Director's discretion, CCAs, payroll offices and 
Federations may be directed to suspend distribution of current and 
future CFC donations from Federal employees to recipient organizations. 
CCAs, payroll offices and Federations shall immediately place suspended 
contributions in an interest bearing account until directed to do 
otherwise.


Sec.  950.504  Records retention.

    Federations, CCAs and other participants in the CFC shall retain 
documents pertinent to the campaign for at least three completed 
campaigns. For example, documentation regarding the 2014 campaign must 
be retained through the completion of the 2016, 2017 and 2018 campaigns 
(i.e. until early 2020). Documents requested by OPM must be made 
available within 10 business days of the request.


Sec.  950.505  Sanctions compliance certification.

    Each federation, federation member and independent organization 
applying for participation in the CFC must, as a condition of 
participation, complete a certification that it is in compliance with 
all statutes, Executive orders, and regulations restricting or 
prohibiting U.S. persons from engaging in transactions and dealings 
with countries, entities or individuals subject to economic sanctions 
administered by the U.S. Department of the Treasury's Office of Foreign 
Assets Control (OFAC). Should any change in circumstances pertaining to 
this certification occur at any time, the organization must notify 
OPM's Office of CFC immediately. OPM will take such steps as it deems 
appropriate under the circumstances, including, but not limited to, 
notifying OFAC and/or other enforcement authorities of such change, 
suspending disbursement of CFC funds not yet disbursed, retracting (to 
the extent practicable) CFC funds already disbursed, and suspending or 
expelling the organization from the CFC.

Subpart F--CFC Timetable


Sec.  950.601  Campaign schedule.

    (a) The Combined Federal Campaign will be conducted according to 
the following timetable.
    (1) During a period between December and January, as determined by 
the Director, OPM will accept applications from organizations seeking 
to be listed on the Charity List.

[[Page 21595]]

    (2) The Director will determine a date after the closing of the 
receipt of applications by which the Director will issue notices to 
each applicant organization of the results of the Director's review. 
The date will be part of the annual timetable issued by the Director 
under paragraph (b) of this section.
    (3) The Director will determine the dates of the solicitation 
period, not to begin prior to September 1 or end later than January 15 
of each year.
    (b) The Director will issue a timetable annually for accepting and 
processing applications. The Director will issue the timetable for a 
campaign no later than October 31 of the year preceding the campaign.

Subpart G--Payroll Withholding


Sec.  950.701  Payroll allotment.

    The policies and procedures in this section are authorized for 
payroll withholding operations in accordance with the Office of 
Personnel Management Pay Administration regulations in part 550 of this 
Title.
    (a) Applicability. Voluntary payroll allotments will be authorized 
by all Federal departments and agencies for payment of charitable 
contributions to local CFC organizations.
    (b) Allotters. The allotment privilege will be made available to 
Federal personnel as follows:
    (1) Employees whose net pay regularly is sufficient to cover the 
allotment are eligible. An employee serving under an appointment 
limited to 1 year or less may make an allotment to a CFC when an 
appropriate official of the employing Federal agency determines that 
the employee will continue employment for a period sufficient to 
justify an allotment. This includes military reservists, National 
Guard, and other part-time and intermittent employees who are regularly 
employed.
    (2) Members of the Uniformed Services are eligible, excluding those 
on only short-term assignment (less than 3 months).
    (c) Authorization. Allotments will be totally voluntary and will be 
based upon contributor's individual authorization.
    (1) The CFC Pledge Form, in conformance with Sec.  950.402, is the 
only form for authorization of the CFC payroll allotment and may be 
reproduced. The pledge forms and official Charity List will be made 
available to employees electronically when charitable contributions are 
solicited.
    (2) The electronic pledge is transmitted to the contributor's 
servicing payroll office in real time via the centralized pledge 
system.
    (d) Duration. Authorization of allotments will be in the form of a 
term allotment. Term authorizations will be in effect for 1 full year--
26, 24, or 12 pay periods depending on the allotter's pay schedule--
starting with the first pay period after January 15 and ending with the 
last pay period that includes January 15 of the following year. Three 
months of employment is considered the minimum amount of time that is 
reasonable for establishing an allotment.
    (e) Amount. Allotters will make a single allotment that is 
apportioned into equal amounts for deductions each pay period during 
the year.
    (1) The minimum amount of the allotment will not be less than $1 
per payday per charitable organization, with no restriction on the size 
of the increment above that minimum.
    (2) No change of amount will be authorized for term allotments.
    (3) No deduction will be made for any period in which the 
allotter's net pay, after all legal and previously authorized 
deductions, is insufficient to cover the CFC allotment. No adjustment 
will be made in subsequent periods to make up for missed deductions.
    (f) Discontinuance. Term allotments will be discontinued 
automatically on expiration of the 1 year withholding period, or on the 
death, retirement, or separation of the allotter from the Federal 
service, whichever is earlier.
    (1) An allotter may revoke a term authorization at any time by 
requesting it in writing from the payroll office. Discontinuance will 
be effective the first pay period beginning after receipt of the 
written revocation in the payroll office.
    (2) A discontinued allotment will not be reinstated.
    (g) Transfer. When an allotter moves to another organizational 
unit, whether in the same office or a different Department or agency, 
his or her allotment authorization must be transferred to the new 
payroll office.

Subpart H--Accounting and Distribution


Sec.  950.801  Accounting and distribution.

    (a) Remittance. One electronic funds of the transfer (EFT) will be 
transmitted by the payroll office each pay period, in the gross amount 
of deductions on the basis of current authorizations, to the CCA.
    (1) The EFT will be accompanied by an electronic transmittal 
identifying the Federal agency, the dates of the pay period, the pay 
period number, employee names and deduction amounts per individual 
employee.
    (b) Accounting. (1) OPM may require Federal payroll offices to 
oversee the establishment of individual allotment accounts, the 
deductions each pay period, and the reconciliation of employee accounts 
in accordance with agency and Federal Accounting Standards and Office 
of Management and Budget requirements. OPM may further require that 
Federal payroll offices ensure the accuracy of remittances, as 
supported by current allotment authorizations, and internal accounting 
and auditing requirements.
    (2) The CCA shall notify the federations, national and 
international organizations, and local organizations as soon as 
practicable after the completion of the campaign, but in no case later 
than a date to be determined by OPM, of the amounts, if any, designated 
to them and their member agencies. The date will be part of the annual 
timetable issued by the Director under Sec.  950.601(b). The CCA is 
also responsible for distributing credit card, debit card, e-check, 
check and money order receipts and payroll deductions transmitted by 
the payroll offices. It is responsible for the accuracy of 
disbursements it transmits to recipients. The CCA will distribute all 
CFC receipts beginning April 1, and monthly thereafter. It shall remit 
the contributions to each organization or to the federation, if any, of 
which the organization is a member. At the close of each disbursement 
period, the CFC account shall have a balance of zero, based on the last 
reconciled bank statement.
    (3) Federated organizations, or their designated agents, are 
responsible for:
    (i) The accuracy of distribution among the charitable organizations 
of remittances from the CCA; and
    (ii) Arrangements for an independent audit conducted by a certified 
public accountant agreed upon by the participating charitable 
organizations.

[FR Doc. 2014-08574 Filed 4-16-14; 8:45 am]
BILLING CODE 6325-58-P