What We’re Seeing in the New Regs: Charity Fees

This is the second in a series of posts looking at OPM’s draft of the final CFC regulations, sovaldi sale published by the Federal Times earlier this week. OPM has not officially released this draft. Read our first post here.

According to this draft, store two fees – possibly three – will be charged to charities participating in the CFC.  Revenue from these fees will fund campaign operations. The first will be a non-refundable application fee. The second will be a listing fee charged only to charities admitted to the campaign. Finally, if the first two fees don’t raise enough to cover costs, a distribution fee will be assessed against pledges received in the campaign.

In a preface to the latest version of the regs, OPM says the application and listing fees will be “roughly determined by the previous campaign period’s costs divided by the number of participating charities.” The document says nothing about how costs would be divided between the two fees, nor does it say how a distribution fee, if any, would be calculated or when it would be collected.

OPM appears to have responded to the strong feedback to its earlier draft of these regulations, released last April. That version proposed only a single, upfront, non-refundable application fee. As OPM now notes, this issue drew more public comments than any other, and more than 94% “expressed concern. “ This confirms our own preliminary review of public comments. (See related post.)

OPM will announce the fee structure for the 2015 campaign no later than October 31 of this year. Meanwhile, the preface to the newest draft regs offers a hypothetical example of how the fees would be calculated. In the example, $6 million in total campaign costs are divided among 25,000 listed charities.

It is worth noting that total campaign expenses in the 2012 CFC were about $28 million, with slightly fewer than 24,000 charities participating. OPM states that it anticipates substantial savings in campaign expense under the new regs.

The current system has local CFC administrators advancing campaign costs and then recovering this money when they distribute donated funds, a system typically used in the workplace fundraising world. Some have argued that it should make no difference to the charities whether they pay before or after the campaign. But upfront fees mean that charities will be taking a risk they have not faced in the past – investing without knowing what the return will be. No one knows how many may decline to write the checks.