The Lightning Rod M/M Blog

Should You "Pre-Certify" With The United Way?

I've heard that some local United Ways are requiring annual "pre-certification" paperwork from charities that wish to "remain eligible" to receive donor choice ("write-in") gifts from contributors in UW corporate campaigns.  I'd like to hear from you if your organization has received any such applications.  If you receive any pre-certifications, I recommend you complete and return them.  I'll explain why below.

The idea behind pre-certification is that United Way will only accept write-in gifts to charities that it has "pre-certified" before its fall campaign begins.  To get said certification a charity must apply annually using a form provided by the local United Way with includes various affirmations (e.g. anti-terrorism compliance), contact information, a copy of the applicant's IRS 501(c)(3) determination letter, and perhaps an ACH authorization form and a voided check.

Obviously, this process reduces the administrative burden on United Way of processing donor option gifts.  It reduces the number of charities UW has to send remittances to, and it streamlines the process of making the remittances it does send.  Of course, it also takes the donor's choice out of "donor choice."  "You may give to the charity you like, just as long as it's one of these." 

If you have received a pre-certification application from a United Way, it's because at some point a workplace donor made a write-in gift to your organization that was processed by that United Way.  That's how come the United Way has your name and address.  Is it worth the trouble to complete and return the appplication?  The answer is yes.  Somehow, some way, that United Way is going to publish that list of "certified" charities.  Some donors will be offended that the charity they'd prefer to give to is not included on the list, but others will just shrug their shoulders and find someone on the list to give to.  You want to be on that list.  Remember one of our Golden Rules of Workplace Campaigning:  You have to be present to win.

Again, if you receive any pre-certification requests, please share them with me.  Thanks.

New Kid In Town

FES - Federal Employee Support For CFC Charitable Giving Incorporated - is a nonprofit organization formed specifically to administer local Combined Federal Campaigns (CFC).  That's a contract job often taken by the local United Way.  In fact, until recently these CFC management contracts were a United Way sinecure.  Not any more.  Other CFC federations now manage CFCs in major cities across the country.

But FES is different.  It's not a CFC federation.  It's not listed in the CFC brochure, and it doesn't solicit gifts for itself from CFC donors.  In other words, FES is not a beneficiary of CFC gifts.  It is truly an independent, disinterested third-party administrator - a status that makes it inherently superior to United Way or another federation that has a stake in the campaign it is managing and thus has an inherent  conflict-of-interest.   

That conflict of interest is not just in theory.  I give most campaign managers credit for resisting temptation to use their power to favor their employer federation at the expense of the other charities.  But in real world CFC campaign situations advantage is sometimes taken; often it's taken without deliberation, but taken nevertheless.

FES started with administering the Pike's Peak CFC.  Then it added Pittsburgh's Three Rivers CFC to its list.  And for 2007 it has added San Francisco Bay Area.  FES is governed by (mostly) retired federal employees themselves, people who have had significant experience with the CFC.  They know what they're doing.  FES gets rave reviews for its service.   You can  bet that  campaigns will sign up as fast as FES can scale up.

When the US Office of Personnel Management (OPM) circulated drafts of the new CFC regulations for comment last year, I suggested they open up the management contracts to the private sector so there would be more competitive bids.  Right now only nonprofits are permitted to bid.  OPM did include that idea in its potential change list at one point, but the howl of opposition from United Way and other federations, fearful of losing their lucrative contracts, caused OPM to withdraw the idea in the final draft of the regulations.   How ironic that a nonprofit corporation organized by federal employees themselves is accomplishing the same thing.

Donor Advised Funds For Workplace Giving?

According to an article in the May 3, 2007, Chronicle of Philanthropy, donor advised funds are now paying out to charities about the same amount annually as the entire United Way system (my observation, not the Chronicle's).  What I found especially interesting was that the Renaissance Charitable Foundation set up donor advised at three companies, which gave their workers the option of contributing.  This is new, and I hope to see more of it.  Replacing United Way donor option ("write-in gifts") with donor advised funds could be good news for both the United Way (which doesn't really want to process write-in gifts) and corporations that want to offer their employees freedom of choice in charitable giving at work but don't want the administrative burder of running that program in-house. 

Independent Charities of America (ICA) offers donor advised funds, too, and it has been ICA's experience that  the interest earned on the assets contribution mostly pay for the administrative costs of the eventual distribution to charities.  (ICA requires a minimum distribution of five percent of the donor's account annually).

That's the good news.  The bad news is that when ICA has offered this option to corporations, the response has been "that's too complicated for our employees to understand."  Maybe so.  It's a new idea for workplace giving.  But once that AH-HAA! moment happens, and employees get it, I think they will love this idea.

What do you think?