What We’re Seeing in the New CFC Regs: How Federations Collect Their Fees

This is the third in a series of posts looking at OPM’s draft of the final CFC regulations, published by the Federal Times earlier this month. OPM has not officially released this draft. Find links to our earlier posts on this topic at the bottom of this page.

Today we’re discussing what the new regs say about how federations collect their fees from member charities.

Federations play an important role in administering the CFC. They process CFC applications, report CFC pledge results, and transfer CFC donations to their members. They are free to offer services beyond these basic ones, and many do.  (See this post for a refresher on federations and what they do.)

Federations charge their members fees for the services they provide. The amounts vary greatly. To date, federations commonly have collected these fees by deducting them from contributions to members as those moneys pass through the federation’s books for distribution.

It seems that practice is about to change.

When OPM released its initial draft of the new regulations in April 2013, it proposed prohibiting federations from deducting anything from CFC distributions to charities. Instead, federations would have to invoice their members for fees, dues or any other payments. Strong objections were raised during the public comment period (along with some expressions of support).

The objectors seem to have lost this battle. The latest version of the regulations retains the prohibition against deducting any funds from federation distributions to charities.

Other posts on the latest draft regs: