INTERNATIONAL SERVICE AGENCIES COMMENTS OF THE INTERNATIONAL SERVICES AGENCIES ON 0PM'S PROPOSED CFC REGULATIONS

Transcription

1 INTERNATIONAL SERVICE AGENCIES National Office: 4733 Bethesda Avenue Bethesda, Maryland (301) (800) COMMENTS OF THE INTERNATIONAL SERVICES AGENCIES ON 0PM'S PROPOSED CFC REGULATIONS International Service Agencies (ISA) is a federation of over thirty distinguished, nonprofit American charitable agencies that provide health and welfare services to needy people throughout the world. Members of ISA include charitable agencies such as CARE, Project Hope, and Save the Children. ISA (and its predecessor Federal Service Joint Crusade) has been a participant' in the federal fund raising program since its inauguration in 1957 and in the Combined Federal Campaign since the inception of CFC as an experiment in The proposed CFC regulations will dramatically and negatively affect the participation of international voluntary agencies in the CFC. Federal employees have been generous in their designations of contributions to ISA and its member agencies. Those specific designations are the lifeblood for the health and welfare services ISA agencies perform for the needy citizens of less developed countries. Any program that will make it more difficult for federal employees to.designate their contributions for charitable services overseas strikes at the heart of the mission of ISA and its members. The proposed regulations do just that. By making the listing of participating charities optional and by eliminating the thirty-word description of the services provided by those charities, the proposed regulations will make it more difficult for employees to designate. Also, by shifting the focus of the CFC to the local Federal level, the proposed regulations singularly disadvantage international charities. ISA is not opposed to that shift (indeed, it makes sound sense for domestic charities), but ISA believes that, in making the change, OPM should also make allowance for the unique situation of international charities. ISA has strongly supported this Administration's approach in encouraging specific charitable designations. We urge the Administration to retain as much of that approach as possible, particularly in the international area. Underlying the technicalities of the regulations is the reality that the loss of designated federal employee contributions will mean a loss.of charitable American services overseas. OPM should not neglect human considerations in Grafting its changes to the regulations and should also bear in mind that the aid ISA agencies provide serve a vital function in U.S. foreign policy. We believe the

2 regulations can be easily altered to retain the same structure of the proposals, while taking into account the unique characteristics of international charity. Our suggestions are set forth below. I. There Should Be Mandatory Listing for All Local Campaigns. ISA urges that OPM retain the requirement in the existing regulations that employees be provided a list of all charities participating in the campaign, complete with a thirty-word statement describing the services provided by each participant. The proposed approach of providing a list only at the option of the local Federal Coordinating Committee and of eliminating the thirty-word statement is inefficient and disserves the overall goal of encouraging Federal employees to choose which charities should receive their contributions. From a practical perspective, the designation process will be an administrative nightmare unless a list of participating charities is provided. A list not only allows a more informed exercise of employee choice, it also allows, because of the numbering system, the use of computerized systems and a more efficient administrative process. The preamble to the proposed regulations acknowledges that "because it is possible that many employees will not know which agencies are eligible under 26 U.S.C. Section 501(c)(3), or will inadequately or indecipherably designate unlisted agencies, there is likely to be an increased number of returned gifts and pledges." 49 Fed. Reg. at The problem, however, is of greater magnitude than the proposal recognizes. For instance, when no list is provided, it is unclear under the regulations how the federal employee is to designate a specific charity that is, whether he must write in the "full and correct name of the charity" (see proposed 5 CFR Section (e)(2)(iv)) or whether a designation can be made by writing in the name commonly associated with the charity, e.g., CARE or Project Hope. Similarly, there is enormous potential for confusion among the names of different charities. For instance, would a designation to "Hope" be read to mean the international Project Hope or the domestic City of Hope? While these problems can perhaps be resolved at the local level given sufficient time and effort, that would be a waste of resources -- resources that are better put to charitable use. It is also an unnecessary waste since the listing of participating agencies is an approach that has proven workable. Requiring a list would restrict the administrative problems inherent in opening the CFC to all eligible 501(c)(3) organizations to that small percentage of designations that would be directed to unlisted organizations. It has been suggested that the answer to this administrative problem is that questionable designations be treated the same way as undesignated contributions and be given to the PCFO. ISA believes that any such approach is legally unsupportable; would frustrate the donative intent of the employee; and would

3 -3- ultimately undermine the credibility of the campaign. The most logical, direct, and fair approach to the problem is to mandate lists for all campaigns. Finally, ISA opposes the elimination of the thirty-word descriptive statement. Those statements allow the donor who is not intimately familiar with some of the participants to have a general idea of what they do. The donor who wishes for example, to help Cambodian refugees would be able to locate an organization in the ISA group in the leaflet that performs such services. At a minimum, the listing of participating organizations should be grouped under an appropriate heading to indicate whether that organization provides services domestically or overseas. II. The Final CFC Regulations Should Establish an International Giving Committee To Provide for the Unique Situation of International Charities. The OPM proposals focus attention on the local level the local Federal Coordinating Committee and the local PCFO. That focus makes sense for domestic charities but only exacerbates the problems of international charities' participation in the CFC. There are several reasons why international organizations warrant separate treatment under the regulations: By definition, international federations, such as ISA, are not eligible for PCFO status because they are not "local" charitable organizations. [Proposed Section ]. Nor as a practical matter would it make sense for an organization such as ISA to function as a PCFO in most circumstances, since international organizations by their nature, do not employ local staff. The proposed regulations shift control to the local federal level. This makes sense for domestic organizations that have local chapters throughout the country but singularly disadvantages international charities that, again by nature, do not carry on local activities. The proposed regulations emphasize the use of local media as a replacement for listing. Again, this makes sense for domestic organizations for which local advertising can serve as an adjunct to their mission but not for international charities. The PCFO under the proposals may have control over disbursement of a significantly increased amount of undesignated funds; yet the PCFO, as an organization

4 -4- representing domestic charities, typically has expertise and knowledge with respect to domestic, not international, needs and charities. Federal employees should be informed, at a minimum, as to which organizations will use their contributions overseas. This is particularly important since there can be confusion over similar sounding names of some domestic and international organizations. -- President Reagan's Executive Order (No ) recognized the special situation of international organizations and exempted them from the previous local presence requirements. The purpose of that exemption, which specifically recognized the uniquely non-local character of international charities, would be frustrated by the shift to local focus under the current proposal, unless similar adjustments are made in these proposals for those organizations. In light of the unique situation of international charitable organizations within the new CFC context, ISA believes that the regulations should establish a mechanism to ensure that the needs and services of international charities are given appropriate recognition during the campaign and that federal employees are advised of the existence and purpose of these organizations. For this purpose, ISA proposes that the regulations establish an "International Giving Committee" to function somewhat as an analog to the PCFO in the international area. Attached to these comments is a marked-up version of the proposed regulations designed to implement the concept of an International Giving Committee. The key points in the proposal are as follows: 1. A national voluntary federation could apply to OPM for selection as the International Giving Committee. OPM would appoint the applicant that supports the most program services overseas as the International Giving Committee. Reason: The purpose of the International Giving Committee is to provide information and advice to the PCFO on international services and needs as well as to provide the focal point for international giving, just as the PCFO does for domestic purposes. The IGC should be selected by the Director in recognition of the fact that its functions and services are not local in nature. 2. The International Giving Committee would be charged with advising the local Federal Coordinating Committee and the PCFO on the range of issues relevant to international charities. The management of the campaign would remain with groups such as United Way acting as the PCFO. Those groups have the domestic

5 -5- resources to perform that function. An international group, such as ISA, does not have those resources and it would be wasteful for it to develop them. Reason: The LFCC and PCFO will not have the background or information necessary to address many issues and concerns relevant to international charities. 3. The International Giving Committee will supply a list of its certified organizations to the LFCC. This list would either be included under a separate heading for international services if a list of all eligible organizations is provided or would be included on its own as part of the campaign literature even if no other list is provided. Reason; As explained above, international charitable organizations do not have local chapters or ready access to the local media, and they do not provide services that can be seen at work within the local community. In short, they do not have a "local presence" that could fill the informational gap created if lists were no longer provided. It is, therefore, appropriate, even if no other list is provided, to give federal employees some limited information with respect to charities that perform services overseas. If a general list is provided, the international agencies should be separately grouped on that list in order to prevent confusion and facilitate employee choice. It is also appropriate for organizations, such as International Service Agencies, to certify the eligibility of their member agencies, since these certifications will not involve local issues. 4. ISA's proposals also clarify the obligation of the PCFO to disburse a portion of the deemed designated funds for international charitable purpose, both in terms of the PCFO's obligation to disburse deemed designated funds to the International Giving Committee and to consult with the International Giving Committee concerning further disbursements for international needs. The campaign literature and pledge cards would contain statements explaining the role of the International Giving Committee to Federal employees. Reason: Even if an International Giving Committee were not established, it would still be important to clarify and formalize the PCFO's obligations with respect to the disbursement of deemed designated funds for use overseas. The proposed regulations currently contain only a general reference to the obligation of the PCFO to consider international needs [proposed 5 CFR Section (e)(2)(iv)]. Since the PCFO is, by definition and as a practical matter, a locally oriented charitable organization, this general reference must be given more substance if it is to be effective. Specifically, it should be made clear that the PCFO must disburse some portion of its deemed designated funds to

6 -6- an organization such as the International Giving Committee and must coordinate with such an organization in further determining international needs. III. Qualifications for Listing. The proposed regulations draw a distinction between the eligibility requirements for listing as opposed to designation. See proposed 5 CFR Section (1). ISA believes that approach is sound, but the extent of the distinction 0PM intends to draw is unclear. In particular, it is unclear whether the requirements of 5 CFR Sections , and are intended to limit eligibility for listing. ISA believes those limitations on eligibility for listing (but not designation) should be imposed. Although all health and welfare 501(c)(3) organizations may be eligible to receive designated contributions, it does not follow that they must also be eligible for listing. The provisions in the proposed rules requiring national and local voluntary agencies to demonstrate a broad scope of program and fundraising provide appropriate limitations on the eligibility for listing. Organizations listed by the Federal government should be required to prove themselves by obtaining significant public support before they are included in the list. This will both protect Federal employees by ensuring that listed agencies are serious charitable organizations that will put their designated contributions to use in the community or overseas and will also make the list itself more manageable. There is no reason why the CFC list should act as a proving ground for unknown, untried, and perhaps unreliable programs. Nor should the content-neutral restrictions of 5 CFR , 405 and 501 present any First Amendment problems, particularly since the employee would still be free to designate contributions to any health and welfare 501(c)(3), whether listed or not. IV. The "Unanimity" Rule Should Be Eliminated with respect to ISA. The proposed regulations provide that the PCFO may disburse contributions to a federated group "if all member agencies of that federated group... agree." 5 CFR Section (i)(2). This means that if one member of ISA wishes to receive its contributions directly, then none of the other members can elect to benefit from the administrative efficiencies of having ISA collect disbursements on their behalf. There is no valid Federal purpose supporting this "unanimity" limitation. Members of the ISA should be free to determine the method of transmittal of contributions, particularly since ISA agencies are not located in the local community and the transmission of funds to them present unique administrative problems. Accordingly, ISA should be allowed to receive contributions on behalf of its member

7 -7- agencies. In the attached mark-up of the proposed regulations, ISA has included an amendment to 5 CFR Section to accomplish that result. V. The Regulations Should Allow Follow-up "Thank You" Notes from Designated Agencies to the Designating Federal Employee. The current proposals do not appear to allow voluntary agencies to receive the limited information necessary to permit the agencies to thank the employees that have designated specific contributions for them. [Proposed 5 CFR ]. ISA believes that such information can be provided to the charities without trespassing on the employee's privacy and that, indeed, the failure to acknowledge designated contributions will ultimately harm the Campaign by creating the inaccurate impression that those designations are not appreciated by the recipient agency. VI. The Proposed Regulations Do Not Comply with the Regulatory Flexibility Act or the Paperwork Reduction Act. The Regulatory Flexibility Act analysis contained in the proposed regulations is insufficient. It fails to consider the effects on small charities of eliminating the mandatory list and the thirty-word statement. Both those changes will disproportionately and negatively affect small charities by reducing the amount of information available to Federal employees concerning those charities. OPM has also not complied with the Paperwork Reduction Act, 44 U.S.C. Section 3501 et. seq., in proposing these regulations. The proposals clearly call for the collection of information from the public by the federal government (e.g., specifications of information required on applications for PCFO selection) and, therefore, are covered by the Act. OPM, however, has not complied with the provisions of the Act for OMB clearance and has not complied with OMB's regulations implementing the Act. 48 Fed. Reg et. seq.