The Combined Federal Campaign (CFC) is the Federal Government’s workplace giving program. During the campaign season, which runs from September 1 through December 15, federal civilian, postal, and military donors pledge to support eligible charitable organizations providing health and human service benefits throughout the world.
Contributions to the CFC reached $282.6 million in 2009. In 2012, more than 20,000 nonprofit organizations worldwide participated in the CFC. Donors to the CFC can designate specific nonprofit organizations to receive their donations. Undesignated funds are divided between participating organizations in proportion to the amount of designated funds they receive. Participation in the CFC can be a lucrative source of funding for organizations that qualify. However, participation is limited to certain charities and applications must be submitted annually.
To be eligible for the CFC, national and international charities must provide services, benefits, assistance, or conduct program activities in 15 or more different states or one or more foreign countries over the immediately preceding 3 years. Local organizations may qualify by documenting services provided in their local area during the preceding calendar year. The description of services must include the location of service, description of services provided, number of beneficiaries, and the monetary value of the services provided.
Charitable organizations wishing to be included in the CFC Charities List must be recognized by the IRS as exempt under Code Section 501(c)(3) and appear in the IRS Business Master File or have an IRS affirmation letter verifying their 501(c)(3) status. Alternatively, charitable organizations may be covered by a national organization’s group exemption. Subsidiaries organized as single member LLCs will not qualify.
A charitable organization’s participation in the CFC may trigger additional state charitable solicitation registration requirements if the charity participates in a state where it is not already registered. The states where the organization would need to register depends on whether it chooses to participate on a local, regional or national level.
Finally, certain organizations may be required to provide audited financial statements. Organizations with revenues of $250,000 or more are required to undergo an audit by an independent public accountant. The complete audited financial statements must be provided with the CFC application. Organizations with revenue of at least $100,000 and less than $250,000 must use the accrual method of accounting and have their financial statements reviewed by an independent public accountant. Finally, organizations with revenues of less than $100,000 are not required to have an audit or review, but must certify that they have controls in place to ensure that funds are properly accounted for and that they can provide accurate and timely financial information to interested parties.
Ellis Carter is a nonprofit lawyer with Caritas Law Group, P.C. licensed to practice in Washington and Arizona. Ellis advises nonprofit and socially responsible businesses on corporate, tax, and fundraising regulations nationwide. Ellis also advises donors with regard to major gifts. To schedule a consultation with Ellis, call 602-456-0071 or email us through our contact form.