[House Hearing, 113 Congress]
[From the U.S. Government Publishing Office]



 
        THE COMBINED FEDERAL CAMPAIGN: MAKING EVERY DOLLAR COUNT

=======================================================================



                                HEARING

                               before the

                   SUBCOMMITTEE ON FEDERAL WORKFORCE,

                    US POSTAL SERVICE AND THE CENSUS

                                 of the

                         COMMITTEE ON OVERSIGHT

                         AND GOVERNMENT REFORM

                        HOUSE OF REPRESENTATIVES

                    ONE HUNDRED THIRTEENTH CONGRESS

                             FIRST SESSION

                               __________

                             JULY 10, 2013

                               __________

                           Serial No. 113-42

                               __________

Printed for the use of the Committee on Oversight and Government Reform


         Available via the World Wide Web: http://www.fdsys.gov
                      http://www.house.gov/reform





                  U.S. GOVERNMENT PRINTING OFFICE
82-140                    WASHINGTON : 2013
-----------------------------------------------------------------------
For sale by the Superintendent of Documents, U.S. Government Printing 
Office Internet: bookstore.gpo.gov Phone: toll free (866) 512-1800; DC 
area (202) 512-1800 Fax: (202) 512-2104  Mail: Stop IDCC, Washington, DC 
20402-0001



              COMMITTEE ON OVERSIGHT AND GOVERNMENT REFORM

                 DARRELL E. ISSA, California, Chairman
JOHN L. MICA, Florida                ELIJAH E. CUMMINGS, Maryland, 
MICHAEL R. TURNER, Ohio                  Ranking Minority Member
JOHN J. DUNCAN, JR., Tennessee       CAROLYN B. MALONEY, New York
PATRICK T. McHENRY, North Carolina   ELEANOR HOLMES NORTON, District of 
JIM JORDAN, Ohio                         Columbia
JASON CHAFFETZ, Utah                 JOHN F. TIERNEY, Massachusetts
TIM WALBERG, Michigan                WM. LACY CLAY, Missouri
JAMES LANKFORD, Oklahoma             STEPHEN F. LYNCH, Massachusetts
JUSTIN AMASH, Michigan               JIM COOPER, Tennessee
PAUL A. GOSAR, Arizona               GERALD E. CONNOLLY, Virginia
PATRICK MEEHAN, Pennsylvania         JACKIE SPEIER, California
SCOTT DesJARLAIS, Tennessee          MATTHEW A. CARTWRIGHT, 
TREY GOWDY, South Carolina               Pennsylvania
BLAKE FARENTHOLD, Texas              MARK POCAN, Wisconsin
DOC HASTINGS, Washington             TAMMY DUCKWORTH, Illinois
CYNTHIA M. LUMMIS, Wyoming           ROBIN L. KELLY, Illinois
ROB WOODALL, Georgia                 DANNY K. DAVIS, Illinois
THOMAS MASSIE, Kentucky              TONY CARDENAS, California
DOUG COLLINS, Georgia                STEVEN A. HORSFORD, Nevada
MARK MEADOWS, North Carolina         MICHELLE LUJAN GRISHAM, New Mexico
KERRY L. BENTIVOLIO, Michigan
RON DeSANTIS, Florida

                   Lawrence J. Brady, Staff Director
                John D. Cuaderes, Deputy Staff Director
                    Stephen Castor, General Counsel
                       Linda A. Good, Chief Clerk
                 David Rapallo, Minority Staff Director

 Subcommittee on Federal Workforce, U.S. Postal Service and the Census

                   BLAKE FARENTHOLD, Texas, Chairman
TIM WALBERG, Michigan                STEPHEN F. LYNCH, Massachusetts, 
TREY GOWDY, South Carolina               Ranking Minority Member
DOUG COLLINS, Georgia                ELEANOR HOLMES NORTON, District of 
RON DeSANTIS, Florida                    Columbia
                                     WM. LACY CLAY, Missouri


                            C O N T E N T S

                              ----------                              
                                                                   Page
Hearing held on July 10, 2013....................................     1

                               WITNESSES

The Hon. Dave Reichert, A Representative in The United States 
  Congress from the State of Washington
    Oral Statement...............................................     4
    Written Statement............................................     6
Mr. Mark Lambert, Associate Director for Merit System 
  Accountability and Compliance, U.S. Office of Personnel 
  Management
    Oral Statement...............................................     9
    Written Statement............................................    12
Ms. JuCoby Pittman, President and CEO, Clara White Mission
    Oral Statement...............................................    17
    Written Statement............................................    19
Mr. Kalman Stein, President and CEO, Earthshare
    Oral Statement...............................................    23
    Written Statement............................................    26
Ms. Debby Hampton, President and CEO, United Way of Central 
  Oklahoma
    Oral Statement...............................................    41
    Written Statement............................................    43
Mr. Ken Berger, President and CEO, Charity Navigator
    Oral Statement...............................................    48
    Written Statement............................................    50


        THE COMBINED FEDERAL CAMPAIGN: MAKING EVERY DOLLAR COUNT

                              ----------                              


                       Wednesday, July 10, 2013,

                  House of Representatives,
 Subcommittee on Federal Workforce, Postal Service 
                                    and the Census,
              Committee on Oversight and Government Reform,
    Washington, D.C.
    The subcommittee met, pursuant to call, at 1:03 p.m., in 
Room 2154, Rayburn House Office Building, Hon. Blake Farenthold 
[chairman of the subcommittee], presiding.
    Present: Representatives Farenthold, Walberg, Gowdy, Lynch, 
Speier and Davis.
    Staff Present: Alexia Ardolina, Majority Assistant Clerk; 
Molly Boyl, Majority Parliamentarian; Daniel Bucheli, Majority 
Assistant Clerk; Caitlin Carroll, Majority Deputy Press 
Secretary; Adam P. Fromm, Majority Director of Member Services 
and Committee Operations; Linda Good, Majority Chief Clerk; 
Jennifer Hemingway, Majority Deputy Policy Director; Laura L. 
Rush, Majority Deputy Chief Clerk; Scott Schmidt, Majority 
Deputy Director of Digital Strategy; Lena Chang, Minority 
Counsel; Devon Hill, Minority Research Assistant; Safiya 
Simmons, Minority Press Secretary, Mark Stephenson, Minority 
Director of Legislation.
    Mr. Farenthold. Good afternoon. We actually kind of have a 
tight schedule today. There are scheduled votes in the House of 
Representatives at 2:00 o'clock, and we would like to try to 
finish earlier rather than asking our witnesses and folks to 
stick around for what will probably be a very lengthy series of 
votes. I realize I am the only one here at this point, but in 
order to keep us moving ahead, I am going to go ahead and call 
the subcommittee to order, read my opening statement. Hopefully 
by that time minority members will be here. If not, we will 
address that issue when we come to it.
    So the subcommittee will come to order. As is normal, we 
will begin the hearing by reading the Oversight Committee's 
mission statement. We exist to secure two fundamental 
principles. First, Americans have a right to know the money 
Washington takes from them is well spent. Second, Americans 
deserve an efficient, effective government that works for them. 
Our duty on the Oversight and Government Reform Committee is to 
protect these rights.
    Our solemn responsibility is to hold the government 
accountable to taxpayers, because taxpayers have a right to 
know what they get from their government. We will work 
tirelessly in partnership with citizen watchdogs to deliver the 
facts to the American people and bring genuine reform to the 
Federal bureaucracy. This is the mission of the Oversight and 
Government Reform Committee.
    Thank you for being here.
    Today we are going to talk about the Combined Federal 
Campaign: Making Every Dollar Count. Through the Combined 
Federal Campaign, Federal workers have donated more than $7 
billion to thousands of local and national charitable 
organizations. The CFC has marked its 50th anniversary with a 
commission designed to ensure the campaign's long-term 
viability. In the midst of the anniversary, the Inspector 
General released a troubling report demonstrating how donations 
could have been put to a better use.
    With giving at an all-time low, it is clear that some 
changes need to be made to bring workers back into the fold and 
bring them back to donating. While I commend the OPM for moving 
quickly to address the concerns by the IG, banning food and 
entertainment paid for with charitable donations is one 
example, I am troubled by several aspects of the agency's 
proposed regulations. Its regulations lack specificity, yet 
propose substantial untested changes to the administration of 
CFC, the financing of the campaign and the operation of the CFC 
federations.
    A number of the proposed changes move well beyond the 
recommendations of the commission. For example, the commission 
recommended OPM encourage the use of online giving, yet OPM 
proposes to eliminate paper donations. Past experience shows 
the absence of flexible giving options can result in a 
significant decline in donations. For example, the DC1 fund saw 
a 79 percent decrease in donations when it shifted to a web-
only based campaign. Since it has returned back to a model that 
allows both paper and online contributions.
    The regulations also propose to reduce the local connection 
between the hallmark of the programs. OPM describes this change 
as part of its efforts to streamline the campaign. However, 
OPM's history with managing large projects, from the failed 
redesign of the USAJOBS to millions wasted on the failed 
upgrade of the paper-based retirement claims system, does not 
inspire confidence. Moreover, I question why OPM would 
eliminate the opportunity for Federal employees to connect at 
the local level. This seems the logical way to increase giving. 
When it comes to donations, it always helps when the ``ask'' 
comes from a friend.
    The committee has heard concerns from many, from postal 
workers to charity watchdogs. I hope today's hearing will help 
participants better understand the impact of OPM's proposal and 
will lead to sensible changes that better support those who 
choose to donate.
    I thank the witnesses for their participation. We will now 
to go Ms. Speier who will deliver an opening statement. Is it 
yours or Mr. Lynch's or both?
    Ms. Speier. I am just the oracle through which Mr. Lynch's 
statement will be read.
    Thank you, Mr. Chairman, for holding this hearing to review 
the operations of the Combined Federal Campaign and evaluate 
OPM's proposed changes to CFC regulations.
    The CFC is the largest workplace giving campaign in the 
world. Federal employees, military personnel and postal workers 
generously donate a portion of their hard-earned dollars to 
help people and local communities in need. Since the CFC's 
establishment in 1961, our Federal workforce and uniformed 
service members have contributed nearly $7 billion to charities 
that have helped men, women and children in need. Their 
generosity has continued even in the face of a challenging 
budget climate, a Federal pay freeze since 2011, sequestration, 
layoffs, buyouts, furloughs and legislation targeting their pay 
and benefits.
    As a result, it is understandable that contributions to the 
CFC have fallen from a high of $282.6 million in 2009 to $258.3 
million in 2012.
    However, despite these difficulties, our Federal Government 
civilian and military personnel have donated more than $250 
million each year since 2004 to help those who are less 
fortunate. As the Administrator of the CFC, OPM has an 
important responsibility to ensure that every dollar that is 
donated by our Federal workers is effectively used to help the 
individuals who need it.
    I want to thank OPM for creating the CFC 50 Commission to 
ensure the continued growth and success of this vital program. 
I fully support the commission's goals of increasing the CFC's 
accessibility, accountability, transparency and affordability. 
I believe in the need to increase accountability, strengthen 
program integrity and improve the quality and consistency of 
local campaigns.
    Last March, the OPM Inspector General found that the 
campaign administrator improperly charged over $300,000 in 
campaign expenses and should have used $764,000 in campaign 
funds more effectively. We must vigilantly prevent waste and 
abuse of donor contributions.
    I appreciate OPM's commitment to make the CFC more 
efficient and effective, and I appreciate the agency's efforts 
to follow through on some of the commission's recommendations. 
Many charities, donors and watchdog organizations, including 
the witnesses here today, support proposed changes to the CFC 
program.
    But they also have concerns about a number of proposed 
changes. I understand that OPM is still in the process of 
reviewing the public comments received on the proposed rule. 
This hearing presents a good opportunity to hear from OPM, 
charities, donors and watchdog organizations about their views 
on the proposed rule.
    It is important that we have a conversation about whether, 
for example, CFC's fund-raising structure should be 
centralized, whether the paper pledges, charity lists and 
donations should be eliminated, and whether charities should be 
charged non-refundable application fees. Making a good thing 
better is what should unite all of us here today.
    Thank you, Mr. Chairman, and I look forward to the hearing 
and the testimony from our witnesses.
    Mr. Farenthold. Thank you very much, and again, we will get 
underway. Our first witness is Congressman Dave Reichert. He 
represents Washington's Eighth Congressional District. Mr. 
Reichert, you are recognized.

 STATEMENT OF THE HONORABLE DAVE REICHERT, A REPRESENTATIVE IN 
    THE UNITED STATES CONGRESS FROM THE STATE OF WASHINGTON

    Mr. Reichert. Thank you, Mr. Chairman, and also thank you 
to the members of the committee for inviting me here today.
    I am here because this is something I am very passionate 
about. I will share a couple of stories with you in a moment.
    But I first want to say that as a member of Congress, I can 
tell you that many of the programs, of course, that our 
government runs don't work. I think we all recognize that. As a 
former chair of the King County Employee Charitable Campaign in 
Washington, which is King County's version of CFC, I can tell 
you that the Combined and Federal Campaign is one of those 
programs that we got right. That is why I have continued to 
participate as a member of Congress.
    So first I would like to share some of my history with CFC, 
then I would like to share why I am concerned about OPM's 
proposed changes. The CFC has given me the opportunity to 
donate to causes like the Special Olympics and the Pediatric 
Interim Care Center in Seattle, Washington.
    Now, the Pediatric Interim Care Center is a very special 
place. It is filled with little babies. Those babies are born 
in surrounding hospitals in the Seattle area. They are born 
drug-addicted. The hospitals don't have the ability to take 
care of those little babies. So they are taken to the Pediatric 
Interim Care Center in Kent.
    I happen to have been involved as a detective in a case 
that took 19 years to solve, the Green River Serial Murder 
case. One of the victims' daughters in that case born as a drug 
baby, was one of the first babies taken into that organization. 
I wrote a book called Chasing the Devil. All the proceeds from 
that book, through CFC, went to the Pediatric Interim Care 
Center. I continue to support them today. What a wonderful 
cause, to make sure that our babies have a home.
    Two of my grandchildren are adopted from the Pediatric 
Interim Care Center, one a meth-addicted baby, the other a 
crack cocaine and heroin-addicted baby.
    As the former chair of the King County Washington Employees 
Campaign, I saw first-hand the benefits that the CFC and its 
current structure of local control and support had on our 
community. I also know what it takes to found a non-profit, and 
have approved to be a part of the CFC. So when I was a 
detective, my partner was shot and killed in the line of duty. 
We organized a non-profit organization around him and his 
family. That organization still exists today. I was the co-
founder of that organization, put together the organization. 
Took a year or more to become a 501(c)(3), met individually at 
every precinct, 1,100 employees, to gain their support at the 
personal level with all those other folks that work with the 
CFC in King County. Finally, we became a part of their choices 
where people could say, I want to give to the Sheriff Fund, to 
help support those families that have lost a loved one in the 
line of duty, that have been killed in the line of duty.
    So those are two special stories to me. That is why I am so 
passionate about this. I have two grandkids that are drug-
addicted babies, I lost my partner, who was shot and killed. 
And these charities helped those families.
    Why I am here today and what concerns me is that the Office 
of Personnel Management has proposed wholesale changes to the 
regulations governing the Combined Federal Campaign. While I 
say that these changes are based on a report produced by the 
CFC 50 Commission, most of the proposed changes were never 
discussed in the hearings leading up to the report, or even 
mentioned in the report's final text.
    The two proposed regulations that concern me the most are 
OPM's plans to replace the local volunteer campaign structure 
with a centralized Washington, D.C. campaign. The new structure 
would be managed centrally by OPM and the volunteer local 
Federal coordinated committees that have successfully conducted 
the campaigns for decades will be eliminated. OPM would have 
exclusive control in establishing each region.
    I believe that removing local control over campaign 
administration will alienate donors in smaller communities by 
making them think that they are just giving their hard-earned 
dollars away to a bureaucracy in Washington, D.C.
    OPM further proposes to eliminate local operation of the 
campaigns through the establishment of central campaign 
administrators. This seems impractical and unwise and will only 
add to the Federal workforce and remove the campaign from the 
enthusiasm of local Federal agencies and staff.
    I am also concerned about the proposed non-refundable 
charity application fee. This could have the unintended 
consequence of causing smaller, more local charities to leave 
CFC. In my experience, these changes, taking away local control 
and operation, would take away the attributes that make the CFC 
so successful. The fact that local people know that they are 
giving to a locally-administered campaign benefitting local 
charities, helping local people, ultimately my concern is that 
these changes would result in fewer CFC participants and 
donations.
    In these times of need, these charities cannot afford fewer 
donations. I thank you again for the opportunity.
    [Prepared statement of Mr. Reichert follows:]

    [GRAPHIC] [TIFF OMITTED] 82140.001
    
    [GRAPHIC] [TIFF OMITTED] 82140.002
    
    [GRAPHIC] [TIFF OMITTED] 82140.003
    
    Mr. Farenthold. Thank you very much. As is normal procedure 
of this committee, we typically do not have follow-up questions 
to members of Congress. In your case, Congressman, it is not 
necessary, I think you hit all the salient points I probably 
would have talked about anyway.
    So we will now take a very short recess again as we are 
trying to get as much of this done as possible before votes, to 
reset and make room for our next panel. We will reconvene as 
soon as the setup is completed and the next panel is seated, 
probably two minutes.
    Thank you very much, Congressman.
    In less than two minutes we have the next panel seated, in 
record time. I appreciate your promptness.
    We will now recognize our second panel, Mr. Mark Lambert, 
the Associate Director for Merit System Accountability and 
Compliance at the U.S. Office of Personnel Management. Ms. 
JuCoby Pittman is President and CEO of the Clara White Mission 
in Jacksonville, Florida. Mr. Kal Stein is President and CEO of 
EarthShare. Ms. Debby Hampton is President and CEO of the 
United Way of Central Oklahoma. And Mr. Ken Berger is President 
and CEO of Charity Navigator.
    Pursuant to committee rules, all witnesses will be sworn in 
before they testify. Would you please rise and raise your right 
hand?
    Do you solemnly swear or affirm that the testimony you are 
about to give will be the truth, the whole truth and nothing 
but the truth?
    [Witnesses respond in the affirmative.]
    Mr. Farenthold. Let the record reflect that all witnesses 
responded in the affirmative. You may be seated.
    In order to allow time for questions and in order for us to 
squeeze this in, I don't mean to diminish the importance of 
this hearing. This is one I fought for, but we are pressed for 
time today. We ask that the witnesses limit their testimony to 
five minutes. We have your full prepared testimony in our book. 
It will be entered into the record.
    So if you will summarize and do the best you can to stay 
within five minutes, it would be very helpful.
    So we will start with Mr. Lambert. You are recognized for 
five minutes, sir.

                       WITNESS STATEMENTS

                   STATEMENT OF MARK LAMBERT

    Mr. Lambert. Chairman Farenthold and members of the 
subcommittee, thank you for allowing me the opportunity to 
appear before you today to discuss the Combined Federal 
Campaign. The Federal workplace giving program started in the 
1950s under President Eisenhower. Back then, there were four 
distinct campaigns administered by different charities. 
Although a great program, it was considered expensive and 
disruptive to Federal employees because of multiple 
solicitations throughout the year.
    In 1961, President Kennedy, by Executive Order, directed 
the chairman of the Civil Service Commission to oversee the 
program, which resulted in one campaign season that continues 
today. Pledges to the CFC are used to support charities that 
provide human health and welfare services throughout the world. 
The CFC is managed and overseen by the Office of Personnel 
Management to ensure the campaign is effectively and 
efficiently administered and that campaign components meet 
Federal requirements.
    Currently the CFC has over 160 local campaigns, and each 
campaign is managed by a local Federal coordinating committee 
and administered by a principal combined fund organization. The 
LFCC is a group of Federal employees that act as a de facto 
board of directors while the PCFO administers the local 
campaign under the direction and control of the LFCC and the 
director of OPM.
    Since 1961, Federal donors have pledged over $7 billion to 
charities through the CFC. In 2012, contributions totaled 
$258.3 million. In 2011, the CFC celebrated its 50th 
anniversary and former Director of OPM John Berry announced the 
formation of a Federal advisory committee known as the CFC 50 
Commission. The commission was established to review the 
present structure and processes of the CFC and was tasked with 
developing recommendations to improve and modernize the CFC as 
well as enhance accountability and transparency.
    Convened in September 2011, the commission was comprised of 
28 members, including Federal employees from multiple agencies, 
members of LFCCs and PCFOs, the GAO, the OPM Office of 
Inspector General, charitable watchdog groups, leaders of 
charitable organizations and representatives from the National 
Active and Retired Federal Employees Association and Young 
Government Leaders.
    The commission focused on four main areas: donor 
participation, infrastructure, standards of transparency and 
accountability, and an inspector general task force. In July 
2012, the commission issued 24 recommendations. The 
recommendations identified ways to enhance the donor 
experience, address the rising costs of the CFC, and institute 
better procedures for meeting the needs of donors and charities 
in order to increase transparency and accountability and 
improve the overall oversight of the CFC's use of funds.
    OPM reviewed the commission report and concluded the 
recommendations reflected changes that would improve the CFC 
for both donors and the charitable organizations. To implement 
the donor participation recommendations, we propose regulatory 
changes, including moving the solicitation period to end on 
January 15th, allowing new employees to make payroll 
deductions, creating a disaster relief program, and recovering 
administrative costs through an application fee from charities.
    To implement the CFC infrastructure recommendations, we 
propose regulatory changes, including reducing the 
responsibilities of the LFCCs and changing them to regional 
coordinating committees; eliminating redundant campaign 
administration functions by consolidating them into one or more 
central campaign administrators, requiring CFC charity lists be 
made available exclusively through electronic means, and 
requiring all donations to be made via electronic means.
    To implement the standards of transparency and 
accountability recommendations, we propose regulatory changes 
including streamlining the application process to permit 
charities to submit a full application every three years, 
rather than annually; easing the financial reporting 
requirements for charities with less than $250,000 in revenue 
and requiring federations to disperse funds to member charities 
on a specified cycle and prohibiting them from deducting dues 
or fees from CFC funds.
    At present, OPM is reviewing comments from the proposed 
rule, which was issued on April 8th, 2013. Mr. Chairman, over 
50 years ago, the Federal Workplace Giving Program was in need 
of reform. The resulting CFC has served us well until now. 
Through the CFC, we annually solicit millions of employees and 
uniformed service members. However, over 37 percent of donors 
in the past decade have walked away under the current 
practices.
    As such, it is evident that we are once again at a time of 
needed reform. I believe the changes recommended by the CFC 50 
Commission and proposed in our rule will usher in the needed 
reforms to attract new donors and provide new contributions to 
the participating charities. OPM has historically demonstrated 
our commitment to working with our CFC stakeholders, and we 
plan to continue to partner with them going forward.
    I want to thank you for this opportunity to testify today 
and I am happy to address any questions you may have.
    [Prepared statement of Mr. Lambert follows:]
    [GRAPHIC] [TIFF OMITTED] 82140.004
    
    [GRAPHIC] [TIFF OMITTED] 82140.005
    
    [GRAPHIC] [TIFF OMITTED] 82140.006
    
    [GRAPHIC] [TIFF OMITTED] 82140.007
    
    [GRAPHIC] [TIFF OMITTED] 82140.008
    
    Mr. Farenthold. Thank you very much, and you did that right 
on time.
    We will now go to Ms. JuCoby Pittman. She is the President 
and CEO of the Clara White Mission in Jacksonville, Florida. 
Ms. Pittman?



                  STATEMENT OF JUCOBY PITTMAN

    Ms. Pittman. Thank you. Good afternoon, Mr. Chairman and 
members of the subcommittee. It is indeed an honor to be here 
today.
    I am here as the CEO and President of the Clara White 
Mission, where I have served for 21 years. I would like to 
share my concerns on how several of the proposed changes to the 
Combined Federal Campaign will hinder and negatively impact our 
ability to deliver services in our community for the homeless 
and low income in Jacksonville.
    For over 109 years, the Clara White Mission has had a 
history of providing services. And through the dollars that are 
entrusted to our agency by Federal employees through the CFC 
campaign, we are able to support and uplift the neediest in our 
community. Our goal is simple. We help train and place 
individuals in jobs so they can become self-sufficient and 
independent in our society. Our programs are designed to train 
and educate homeless veterans and low income individuals in 
life and career skills that will allow them to give back while 
training, serving and preparing meals to over 500 homeless 
individuals seven days a week at the Clara White Mission.
    To date, over 700 students have graduated from our program 
and been placed in jobs within 90 days of graduating. And 67 
percent of those placed in employment remain in the workforce. 
Our track record is a direct result of continuous support from 
the Combined Federal Campaign, from which we have received over 
$190,000.
    I would like to tell you about a story of a gentleman that 
has been helped by our program. Hezekiah is a native of Havana, 
Florida, reared by both parents. Upon graduating from high 
school, he joined the Army on October 8th, 2005 and was 
discharged in October 8th, 2008. He was stationed in Fort 
Jackson and enjoyed the life of a family man and serving his 
Country. He mentioned that being married and being in the 
military made him grounded and stable.
    Unfortunately, soon after he was discharged, his perfect 
family life was shattered by the unexpected death of his wife, 
whom he loved dearly. He found that coping and living without 
her was very challenging, which led him to a spiraling life of 
drugs. He began using cocaine, he ran away to Tallahassee in 
hopes of starting a new life. But every day, he used drugs 
while working.
    Eventually, he lost his job and started stealing to support 
his habit. He was arrested and served one year in prison. After 
he completed his sentence and a rehab program, he moved to 
Jacksonville for a fresh start once again. He enrolled in the 
Clara White 20-week culinary arts and housing program, 
certified by the State of Florida education program. After he 
was accepted and enrolled, he took advantage of the total 
program. He attended AA classes, life management classes, 
developed a positive support system and joined a local church. 
He excelled and graduated with honors. He stated that our 
comprehensive programs helped him get his life back and 
overcome his negative choices and focus on making positive life 
changes.
    Three days after graduation, he was employed by Morning 
Star Foods. Three months later, he saved his money and moved 
into his own apartment. He remains clean and met his personal 
and career goals while enrolled in the Clara White Mission 
program.
    Our ability to reach out to Hezekiah and provide him with 
tools and training to help him is an amazing, amazing factor 
due to the generosity of the Federal workforce and the CFC 
campaign. However, today I am afraid that the proposed changes 
to the campaign will limit my access and the ability to provide 
similar services in the future.
    The proposed changes include a major reorganization, the 
elimination of all forms of giving outside of solicitation, and 
adding an undisclosed fee for agencies like myself 
participating in the campaign. The reorganization of the 
campaign will mean less opportunity to meet face to face with 
employees, share our agencies' mission and also the opportunity 
to educate donors about how donating to the CFC campaign will 
build capacity and have a visible impact.
    During these difficult times for all Americans, I urge OPM 
to please, please be thorough about implementing changes that 
could have a significant effect on the size, scope and role of 
the combined campaign. I want to work with OPM to make sure the 
proposed changes do not cause hardship and harm to our 
communities up close and personal where we live, work, 
volunteer, and play, up close and personal.
    Thank you.
    [Prepared statement of Ms. Pittman follows:]
    [GRAPHIC] [TIFF OMITTED] 82140.009
    
    [GRAPHIC] [TIFF OMITTED] 82140.010
    
    [GRAPHIC] [TIFF OMITTED] 82140.011
    
    [GRAPHIC] [TIFF OMITTED] 82140.012
    
    Mr. Farenthold. Thank you very much, Ms. Pittman. And thank 
you for the hard work you do on behalf of the people of Florida 
with the Clara White Mission.
    We will now recognize Mr. Kal Stein, President and CEO of 
EarthShare.

                   STATEMENT OF KALMAN STEIN

    Mr. Stein. Good afternoon, Mr. Chairman, Ranking Member 
Lynch and members of the subcommittee. It is my honor to 
address the subcommittee, as it has been my honor to work with 
the Combined Federal Campaign for more than 25 years, in 
pursuit of the CFC's mission to promote and support 
philanthropy through a program that is employee-focused, cost-
efficient and effective, and to lessen the burden of 
government.
    I am speaking today on behalf of EarthShare, which 
represents 80 national organizations and more than 600 local 
charities as well as on behalf of seven national federations 
that represent more than 500 national charities and thousands 
of local charities across the Country. The CFC is the largest 
organized charity campaign in the world and the largest in 
history. It is a singular achievement of civilization, that 
regular working people, Federal employees, our friends and 
neighbors all across the Country and the world, have 
contributed more than $7 billion to charity during the 52-year 
history of the CFC. It is a unique American accomplishment that 
demonstrates the generosity of Federal employees and it is an 
extension of their public service.
    The CFC, in turn, provides critical annual renewable and 
unrestricted funds to more than 25,000 local, national and 
international eligible charities. There is no remotely 
comparable single source of funds for charity in the world. The 
CFC provides a bedrock of contributions of support that funds 
charitable services from disaster relief to assistance for 
veterans and military families, including on-base family 
support services, critical local human services, medical 
research and patient assistance, conservation and much, much 
more.
    I was pleased to serve on the CFC 50 Commission with the 
mission to ensure the continued growth and success of the CFC. 
And I commend Director Barry and OPM for creating the 
commission. With CFC participation at an all-time low, change 
is in order, and opportunities do exist to make the CFC more 
efficient and effective. While there are aspects of OPM's 
proposed changes that are promising and that we support, we are 
deeply concerned that any positive impacts will be overshadowed 
by new regulations that will result in fewer donations, that 
will in turn impact charitable services to local communities, 
including Federal workers and their families.
    There are also a number of proposed regulations that go 
beyond the recommendations of the commission, while other 
critical recommendations of the commission have not been 
addressed, including the need to do further research and 
testing and the formation of a working group of Federal leaders 
to assess that.
    In addition, there is a lack of detail on implementation 
that makes it difficult to respond to the changes in an 
informed manner and to suggest alternatives. Our primary 
concerns are in three areas: loss of local ownership of the 
campaign, the elimination of giving options and the lack of 
testing and specificity regarding change in the cost recovery 
method of the campaign.
    One, loss of local ownership. In the current configuration, 
Federal employees are organized as local Federal coordinating 
committees, and engage all aspects of the campaign, including 
hiring local charities to manage the campaign, and reviewing 
and improving local charity applications. This gives Federal 
employees a strong sense of ownership and a stake in the 
success of the campaign. They can see the impact in their 
communities.
    The proposed regulations seek to eliminate the local 
Federal coordinating committees that provide oversight. Local 
charity management would be eliminated in favor of regional 
marketing organizations. This would dramatically diminish the 
role of local Federal employee volunteers to the detriment of 
the campaign and OPM would need to create the capacity to 
manage all fund-raising, web development, processing and 
operations internally and it has no experience in these areas. 
Such a radical reorganization in the campaign was not 
considered or discussed by the CFC commission.
    The most basic rule of fund-raising is that people give 
when they are asked and the campaign succeeds because it is a 
person to person endeavor, not because someone gets an email. 
When you ask people why they give, the reason most often cited 
is because someone asked, usually a person close to the donor. 
The CFC has been effective over the years because it includes 
hands-on, peer-peer communication and engagement at the local 
level should not be eliminated.
    While we recognize the current system may benefit from 
efficiencies, the proposed changes are an overreaction. OPM has 
been slowly merging campaigns and committees over the years, as 
well as increasing its guidance and oversight, and that 
evolution should continue. The recommendation of the commission 
was to improve the governance of the CFC at the local level by 
improving training and OPM support. It was not to abandon the 
current system. And we support that recommendation.
    Elimination of current giving options. While we strongly 
endorse the expansion of online giving options for Federal 
donors, we know from experience that it is a critical mistake 
to eliminate traditional means of giving altogether, and the 
commission did not recommend eliminating giving options. Many 
Federal employees who give to the CFC do not have access to or 
choose not to use online giving. This is a reality for many 
members of the military, postal service employees, park service 
personnel and others in similar circumstances and settings that 
are frequently without access to computers or cell phones.
    In 2012, $27 million was donated in cash, while $54 million 
was donated online, out of a total of $257 million. We need to 
increase participation in the campaign so we should expand 
online giving options, but not eliminate other forms of giving.
    Allowing donors to give in the method most convenient and 
secure for them is the key to donor satisfaction and increased 
participation. While some employees are content to give 
electronically, others prefer to give in other ways. Forcing 
people to give in a manner they are not comfortable with is not 
conducive to encouraging people to pursue the giving process.
    Third, and my final point, lack of testing and specificity 
regarding change in the cost recovery method. No details have 
been provided on the proposed up-front and non-refundable fees 
for charities participating in the campaign, including the 
amount of the fees and how they will be assessed and adjusted 
each year. The proposal of an up-front fee against an unknown 
return, and that will be non-refundable under any 
circumstances, including withdrawal or denial, is patently 
unfair.
    Without more information, charities will be forced to make 
expenditures without knowing the benefits, which is bad 
governance. Due to the way that campaign cycles work, a charity 
will have to pay the fee twice before it knows if it will see 
any return on the investment. This is the equivalent of a 
college insisting on two years' tuition fees up front, with the 
possibility of rejection, but no possible refund.
    The commission agreed that changing the fee structure is 
critical in increasing participation. The objective is to 
increase the value of the campaign to Federal employees. 
However, charity fees should first be tested at the local level 
before changing the entire campaign. Last year, OPM tested 
universal giving, which allows donations outside of current 
community stations in three local CFC's. This was a relatively 
benign change in the campaign with no opposition or downside 
concerns.
    Changing the financial structure of the campaign is far 
more reaching and potentially disruptive, so it should be 
developed with an equally cautious approach that does not put 
donations at risk. The commission recommendation was to develop 
a series of focus groups to determine what donors want and that 
OPM should organize an ongoing working group with wide Federal 
department representation to recommend modifications to CFC. 
OPM should follow that recommendation before proceeding 
further.
    Despite the numerous challenges, $257 million was 
contributed last year by Federal employees at a cost of less 
than 11 percent, which is outstanding by any measure of 
effectiveness. I believe in the power of the CFC to be a 
positive force for the government and Federal employees and the 
communities where we live, work and play. We look forward to 
working cooperatively with OPM to continue a dialogue that 
ensures any changes in the current regulations will not only 
promote efficiency but also result in greater charitable giving 
and employee participation and will grow the campaign.
    Thank you for your time.
    [Prepared statement of Mr. Stein follows:]
    [GRAPHIC] [TIFF OMITTED] 82140.013
    
    [GRAPHIC] [TIFF OMITTED] 82140.014
    
    [GRAPHIC] [TIFF OMITTED] 82140.015
    
    [GRAPHIC] [TIFF OMITTED] 82140.016
    
    [GRAPHIC] [TIFF OMITTED] 82140.017
    
    [GRAPHIC] [TIFF OMITTED] 82140.018
    
    [GRAPHIC] [TIFF OMITTED] 82140.019
    
    [GRAPHIC] [TIFF OMITTED] 82140.020
    
    [GRAPHIC] [TIFF OMITTED] 82140.021
    
    [GRAPHIC] [TIFF OMITTED] 82140.022
    
    [GRAPHIC] [TIFF OMITTED] 82140.023
    
    [GRAPHIC] [TIFF OMITTED] 82140.024
    
    [GRAPHIC] [TIFF OMITTED] 82140.025
    
    [GRAPHIC] [TIFF OMITTED] 82140.026
    
    [GRAPHIC] [TIFF OMITTED] 82140.027
    
    Mr. Farenthold. Thank you, Mr. Stein.
    We will now go to Ms. Debby Hampton, the President and CEO 
of the United Way of Central Oklahoma.

                   STATEMENT OF DEBBY HAMPTON

    Ms. Hampton. Chairman Farenthold, Ranking Member Lynch and 
members of the subcommittee, thank you for allowing me to 
testify today in the hearing of the Combined Federal Campaign.
    I am here today to express United Way's concerns about 
OPM's proposed changes to the CFC. United Ways are the PCFO's 
for more than 80 percent of the approximately 150 individual 
CFC, working with LFCCs to manage more than half of the 
approximately $265 million raised annually.
    In 2012, Central Oklahoma CFC raised $3.2 million. We 
solicited over 35,000 Federal employees; 9,100 chose to give to 
1,500 charities. But more importantly, those charities helped 
tens of thousands of individuals and families throughout 
Central Oklahoma, including Federal employee families.
    The United Way network has a longstanding relationship with 
OPM, and while in partial disagreement with OPM's proposals, we 
are confident that United Way and OPM will continue to have a 
strong, productive partnership for years to come. Some modest 
reforms may be needed to sustain the integrity and operational 
strength and effectiveness of the CFC. But our view is that 
this regulatory process needs to start from the beginning to 
ensure meaningful involvement by organizations with greater 
expertise in workplace charitable giving.
    There are several specific recommendations that we believe 
undercut the CFC's operational effectiveness and integrity. 
Three main examples of that, first being elimination of local 
involvement in favor of a limited number of regional 
coordinated committees and central campaign administrators. 
Second, charging charities a non-refundable, up-front fee to 
participate. And third, shifting to an internet-only campaign.
    Among the changes that I just mentioned, the most damaging 
and destructive would be the disconnection of CFC from local 
engagement and the transfer of local campaigns to a regional 
administration. As a result of this, Federal employees would no 
longer be able to make well-informed decisions on how they 
support charities in their communities, not only monetarily, 
but as they volunteer. CFC decisions would then be outsourced 
to a regional authority without regard to unique needs of 
individual communities.
    There is a story I would like to share with you that 
happened and really relates to the importance of the local 
involvement. Early in the morning after May 20th, tornadoes 
devastated Moore, Oklahoma. I received an email from the 
executive director of the Federal Executive Board. The email 
was a request for United Way to compile a list of charities 
that were assisting or would be assisting in the aftermath of 
the tornadoes. We wanted that request, so a special 
solicitation of funds could be made by Federal employees. By 
10:45 a.m., our staff had compiled and sent that list to our 
CFC operations. By 3:48 p.m., the following day, only 29 hour 
later, we received our approval letter.
    This coordination between our two organizations 
demonstrates an important benefit of the Combined Federal 
Campaign. The relationship and trust we have built through 30 
years with the CFC allowed us to work quickly in Oklahoma's 
most important hour of need. It makes no sense to replace a 
local-based CFC with an ineffective, generic campaign, run by 
an outsourced fund-raising, marketing person who really doesn't 
even know what is important to our local donors.
    Another ill-informed change would require that charities be 
charged a fee in order to receive donations. Of the 1,500 
charities that received funds from the CFC of Central Oklahoma 
in 2012, 1,200 of them received $2,000 or less. So imagine the 
impact of a $500 to a $1,000 fee on our charities. I predict it 
would discourage about 40 percent of the local charities from 
participating in the CFC.
    Additionally, the proposed changes would eliminate any kind 
of paper form of donation and only electronic donations would 
be allowed. From our experience with the United Way's annual 
campaign, we had a large corporation that chose to do that very 
same thing. The first year that they ran an online-only giving 
campaign, they lost 61.5 percent of their total campaign 
giving. Even three years later, we are still trying to make up, 
and have lost over half of that original giving when they 
offered both the paper donations as well as the online.
    You need to realize that there are people that do not trust 
doing anything financial online. They would rather have the 
paper donation form, and we need to keep that option.
    Mr. Chairman, in conclusion, United Way requests that 
Congress instruct OPM to go back to the drawing board on these 
proposed regulations and that they work with United Way and 
other charities who can provide expertise and guidance in 
crafting CFC reforms that will create efficiencies and more 
importantly, deeply engage Federal workers in the CFC.
    Thank you.
    [Prepared statement of Ms. Hampton follows:]
    [GRAPHIC] [TIFF OMITTED] 82140.028
    
    [GRAPHIC] [TIFF OMITTED] 82140.029
    
    [GRAPHIC] [TIFF OMITTED] 82140.030
    
    [GRAPHIC] [TIFF OMITTED] 82140.031
    
    [GRAPHIC] [TIFF OMITTED] 82140.032
    
    Mr. Farenthold. Thank you very much.
    We will now go to Mr. Berger from Charity Navigator.

                    STATEMENT OF KEN BERGER

    Mr. Berger. Chairman Farenthold, Ranking Member Lynch and 
members of the Subcommittee, thank you for this opportunity to 
share my thoughts on the proposed regulation changes to the CFC 
program.
    Although I was a member of the CFC 50 Commission, I am most 
interested in commenting on these changes from my viewpoint as 
a donor advocate and leader of the charity watchdog 
organization, Charity Navigator. Charity Navigator has as its 
mission to be a guide to intelligent giving for donors to 
charities of every kind. We achieve this by operating a website 
where we rate the performance of charities, as well as provide 
a wide variety of resources.
    In 2012, we had 6.4 million visits to our website and 
influenced billions of dollar of U.S. charitable donations. 
Therefore, we believe we are the largest charity rating service 
in the world.
    However, today I am not expressing the official views of 
Charity Navigator on these matters, since the organization 
hasn't taken any position. Rather, I am speaking based upon my 
own independent perspective and experience. Quite a few of us 
on the CFC 50 Commission expressed the fundamental belief that 
OPM shouldn't simply have a static list of recommendations and 
then consider the work done.
    Instead, we recommended that OPM develop a continuous 
improvement process that engages Federal employees ongoing. 
This involves creating a working group made up of a 
representative sample of Federal employees that would be 
consulted continuously by OPM regarding changes being 
considered over time, as well as a vehicle for employees to 
initiate new ideas to be considered.
    However, I have seen no record of this and I fear that if 
the CFC doesn't have such a baked-in process to its design, the 
long-term viability of the program will be in jeopardy.
    I am also extremely concerned that many of the proposed 
changes don't reflect any plan to pilot test or conduct further 
data analyses. The need for this is critical to the integrity 
of the program, to meet the growing concern for transparency 
and accountability, as well as best practices of securing 
ongoing donor feedback.
    Of the 13 OPM proposed actions that require regulatory 
changes, there are 6 with which I am not in full agreement. 
First, regarding the proposal to charge all charities an 
application fee to participate. Eighty-three percent of 
charities in the United States are $1 million or less in size. 
But the proposed change biases the program toward larger non-
profits. If the application fee is substantial, it is likely 
that the bigger charities will end up covering much less of the 
overall cost of the CFC program. On the other hand, the added 
cost up front could be enough to discourage many smaller 
charities from participating at all.
    In addition, the premise that this change will shift the 
costs of the program from donors to charities is bogus. For 
most charities, unrestricted money from donors is what is going 
to pay for the up-front fee. So it is still donors' money that 
is being used.
    Second, I agree with the concern that any move to eliminate 
non-electronic donations is likely to reduce the number of 
employees who participate, as well as the overall amount of 
money raised each year. Third, I believe the proposal to move 
to regional committees has valid arguments on both sides, but 
it needs to be pilot-tested to see where a good balance can be 
struck.
    Fourth, I agree with concerns about OPM's plan to eliminate 
printing of various campaign materials and making them 
available only via electronic means. This change should only 
occur in locations where electronic data is easily accessible 
to all Federal employees. Further research and pilot testing, 
once again, is required.
    Fifth, it is being proposed that every few years, charities 
already in the program would be asked for a more limited set of 
documents. Charities that get large amounts of program funding 
each year shouldn't have this annual requirement lifted.
    Sixth, OPM is proposing to waive the order requirement for 
organizations with annual revenues less than $250,000. If a 
charity gets a sizeable amount of money from the CFC each year, 
it should be required to conduct an audit, regardless of its 
size.
    I believe the other seven proposed changes are good ones 
that will help OPM to improve its oversight of the program.
    In conclusion, I know that the generosity of the Federal 
workforce is enormous, and OPM has a vitally important 
responsibility to help ensure that every charitable dollar 
raised is used effectively. My sense of the CFC leadership is 
that they sincerely want that to happen. I hope it does, so 
many more people receive the vital help they need. That is what 
matters most.
    Mr. Chairman, this concludes my statement. I would be 
pleased to answer any questions from you or the subcommittee. 
Thank you.
    [Prepared statement of Mr. Berger follows:]
    [GRAPHIC] [TIFF OMITTED] 82140.033
    
    [GRAPHIC] [TIFF OMITTED] 82140.034
    
    [GRAPHIC] [TIFF OMITTED] 82140.035
    
    [GRAPHIC] [TIFF OMITTED] 82140.036
    
    [GRAPHIC] [TIFF OMITTED] 82140.037
    
    [GRAPHIC] [TIFF OMITTED] 82140.038
    
    [GRAPHIC] [TIFF OMITTED] 82140.039
    
    [GRAPHIC] [TIFF OMITTED] 82140.040
    
    Mr. Farenthold. Thank you very much.
    I will recognize myself for five minutes of questioning.
    I think I speak for everybody on the dais here, that you 
don't get into public service as an elected official if you 
don't start in public service helping out non-profits and 
charities. My wife, a member of the Junior League, considers 
herself basically a professional fund-raiser. I have served on 
the boards of the Texas State Aquarium, the art museum of South 
Texas, several schools, private schools that my children 
attended. My wife has been on the board of a small non-profit 
no-kill animal shelter, PeeWee's in Corpus Christi. My company 
before I came to Congress did websites, we had a special 
program for non-profits. We were very involved in this.
    This is an issue I am very passionate about, and understand 
a little bit about fund-raising and the internet. I am deeply 
concerned about doing away with paper donations and the 
personal ask. I can guarantee you, I am much more effective 
raising money for whatever I am raising money for when I look 
somebody in the eye or talk to them on the telephone and say, 
can you help out, rather than firing off an email or a letter. 
I think we have heard testimony to the effect that we have had 
negative results there.
    Are there any thoughts, Mr. Lambert? Are there pilot 
programs where we determine what impact this will have?
    Mr. Lambert. Mr. Chairman, we are still evaluating the 
comments on the proposed rule. We will move forward once we 
have done so in a thorough way to finalize the reg. So a lot we 
don't know yet. The regulations themselves are meant to be a 
general framework. The details, the processes and procedures of 
implementation will come after that.
    We have historically shown our commitment to our 
stakeholders to work with them on how best to implement those 
changes, and we will continue to do so.
    Mr. Farenthold. Your agency's budget justification for 
fiscal year 2014 states that ``OPM received legislative 
permission to finance the CFC program via an administrative fee 
charged to each participating charity and will begin collecting 
the fee during fiscal year 2015.'' I asked our staff to look 
into that and see where that legislative authorization was. 
They couldn't find it. Could you help us out on that?
    Mr. Lambert. I am not surprised they couldn't find it, 
because that was included in our justification in error, that 
language was.
    Mr. Farenthold. I am obviously concerned about not running 
up the Federal deficit by funding this program. But I am also 
concerned that the administrative fee is going to cut out some 
small charities.
    Let me ask Mr. Berger, Charity Navigator, one of the 
criteria you use in evaluating charities is how much actually 
goes to the program and how much is eaten up in other expenses. 
Would this OPM fee actually downgrade, potentially, their 
rating as a charity that gives their money to the people and 
projects they say?
    Mr. Berger. I want to emphasize that overhead is one of a 
number of things that need to be considered. So the overall 
picture of a charity, its performance, its results, are most 
important. Within that context, we certainly do think that the 
higher overhead in some cases is a good indicator of 
inefficiency and can be a problem that would impact the rating 
of a charity if it became excessive.
    Mr. Farenthold. All right. I am going to go to Ms. Pittman, 
because she is a small, local charity. Just on a personal 
level, and no offense to United Way, Ms. Hampton, but I tend to 
like the local charities where I know the people involved and 
can really see the impact that they are having. We heard some 
testimony about the disparate impact these new rule changes 
might have on smaller charities.
    Can you spend maybe 30 seconds telling us some of the 
negative impacts you see?
    Ms. Pittman. Well, I will tell you, as you mentioned 
earlier, the personal ``ask'' and the volunteer is important. 
Just yesterday, I had an opportunity to go speak at the DEP and 
because of a relationship that we had over five years ago, I go 
at least every other year to give them an update of what is 
going on locally with our organization. If I am not able to go 
inside and talk to the Federal employees, that will definitely 
impact what we do locally. That means that those dollars that 
we are used to, depending on helping the homeless and low 
income, those dollars will stop, they will cease.
    Mr. Farenthold. Thank you very much. I see my time is about 
to expire. I want to give everybody on the panel a chance to go 
with their first round of questioning before we have to go for 
votes. So I will now recognize the ranking member, Mr. Lynch.
    Mr. Lynch. Thank you, Mr. Chairman. First of all, I want to 
thank Mr. Davis for his kindness. I served as his assistant, he 
was my mentor before I took over ranking member here. I am sure 
he ably conducted my duties in my absence. I want to thank him 
and also Ms. Speier who delivered my opening statement.
    I want to thank all of the panelists for coming forward and 
helping the committee. This is a tremendous blessing we have in 
so many Federal employees who are willing to donate. So I think 
some of these recommended changes could be classified under the 
no good deed goes unpunished category.
    I just want to ask Mr. Lambert, have we looked at what 
impact, now, we are in the third year of a pay freeze for 
Federal employees. Third year, it started back in January of 
2011. So we froze the pay of Federal employees. What impact has 
that had on donations? Have we looked at that? I know they have 
been dropping off in those years. Do we think any part of that 
is the fact that we have withheld raises for our Federal 
employees?
    Mr. Lambert. Sir, we do not do any in-depth research 
currently on why employees give or don't give. It is one of the 
recommendations from the commission. And we are going to 
implement that. It didn't require regulatory change, which is 
why it wasn't seen by others in those regulatory changes we 
proposed. But certainly I would have to think the economy and 
the pay freeze has had an impact on donations.
    Mr. Lynch. Furloughs, things like that that we are dealing 
with. Okay. If we could, I would like to get an answer to that 
question, if we can sort of quantify it. Not now, but in your 
work.
    A couple of the other issues jump out at me, one being, I 
understand the desire to go to paperless donations. I 
understand the reasoning behind that, and it is good for the 
environment. However, sometimes ideology overtakes 
practicality. A couple of things here. If I am running a home 
like a Clara White Mission and I am trying to take care of 
homeless veterans, and only 22 percent of the folks are 
donating online, and 78 percent are donating with paper checks, 
that is a huge part of my donation base.
    Now, I wish everybody might be a little bit more up to 
speed, but the plain fact of the matter is, it is not good for 
the environment for my homeless veterans to not have a grant 
that helps them either get retraining or get through rehab. It 
is not good for my folks or families that are suffering from 
Alzheimer's to not have a grant for their parents or 
grandparents. It is not good for the environment, I have an 
adolescent drug rehab facility in my district. It is not good 
for their environment for those kids who are trying to get off 
Oxycontin and heroin if there is no grant to make sure that 
those 20 beds are open for those kids, and I have a line around 
the block waiting to get in there.
    So when we think about environment, I just hope that we are 
not short-sighted. It is a wonderful ideal to pursue, but I 
would not cut loose 78 percent of my donors because they are 
sending me a check so I can do good work.
    On top of that, you are asking letter carriers, the 
National Association of Letter Carriers, to donate to your 
campaign. You are asking postal workers to donate to your 
campaign. It is antithetical for them to not use the mail. The 
reason that they are being laid off is because people are 
paying their bills online. Now you are asking those letter 
carriers, those postal workers, don't use the mail, put 
yourself out of work, take your donations and send them to us 
online so that we can lay more of you off faster. That is just 
not going to work. They are too smart for that. So we have to 
back off a little bit, and do what we can to encourage e-
donations.
    The last point I want to hit on is the disaster relief 
piece. I think that is a wonderful idea. I know how patriotic 
and loyal and good Federal employees are. I can see how they 
would step up in a situation like the Oklahoma tornadoes or 
even the terrorist attack in my district in Boston at the 
marathon, or these firefighters that just were killed in such a 
courageous line of work. I can see where folks would step up in 
a tragedy like that, especially Federal employees.
    Would this require a separate campaign? Is that how this is 
envisioned? Because it lacks some detail here. Like if it was 
outside the normal donation period, campaign period, would this 
be a separate type of campaign? Because in my district, we are 
getting 100-year storms every three weeks. So I can see where 
the need for this would be spot-on. It is a great idea. I am a 
little fuzzy on the details of how that might work.
    Mr. Lambert. Congressman, it could be. Again, we are 
seeking through the proposed regulations to get the authority 
to be able to do that. Once we have that authority, we will 
again work with all of our stakeholders to develop that 
program. But you are right, it could be a year-round program 
that is available immediately for Federal donors to be able to 
start contributing to, and to get that money as fast as 
possible to the local organizations that are responding to 
those disasters.
    Mr. Lynch. Okay. You have been very generous with my time, 
Mr. Chairman. And I appreciate your indulgence. I yield back.
    Mr. Farenthold. It is my pleasure.
    We will now go to the gentleman from Michigan, Mr. Walberg.
    Mr. Walberg. Thank you, Mr. Chairman, and thanks to the 
panel for being here. I wish I could have heard you, but I have 
had opportunity to review your statements.
    Mr. Lambert, let me just ask, before I go back to some of 
the train of thought that Mr. Lynch was going down, why did OPM 
wait until after the public comment period to post comments on 
the proposed regulation? Was it OPM's decision, consistent with 
OMB's?
    Mr. Lambert. Yes. We believe it was consistent with OMB 
guidance. Our policy is to not post the comments until after 
the comment period is over. So the comment period ended on June 
7th, and after reviewing those comments and redacting PII, we 
posted those comments, I believe it was by June 24th. So very 
soon after.
    Mr. Walberg. What is the rationale for the policy?
    Mr. Lambert. I think it is that we don't want to bias the 
comments that are being made. So we just try and hold off until 
the end, and then post those. We don't get them all through 
electronic means. A lot of them come in through the mail, so 
they have to be kind of uploaded into the system and it takes a 
little time.
    Mr. Walberg. Interesting. Through the mail.
    [Laughter.]
    Mr. Walberg. Let me ask you, how much will be saved by the 
shift to electronic-only donations?
    Mr. Lambert. I don't have a specific number, but I can tell 
you shifting to an automated environment would be significant 
savings. When you consider that we solicit over 4 million 
donors, and that charity lists are produced, I guess pretty 
close to 4 million, that is a lot of printing that happens. Not 
too many contributions come in by cash or check. It is a small 
percentage of what does come in. Probably around $20 million of 
the $250 million that we raised.
    So not having to print the brochure, not having to process 
the cash or checks and not having to input pledge forms that we 
get in the manual format, because all that information has to 
be entered manually into systems then to determine who it 
should go to and how it should be distributed.
    So it would be a significant amount, but I don't have an 
actual dollar amount.
    Mr. Walberg. In light of that, do you have any idea of how 
the dollar amount that decreased donations, overall amount 
received from donations would result from this change?
    Mr. Lambert. I don't know that it would decrease. Again, 
cash and check donations are a very small percentage of what we 
get. And we think a lot of those people, now again, automated 
systems aren't available in all 160 of our campaigns. So right 
now it might be a small percentage that are coming in that way. 
We are seeing that this is growing every year.
    But we also think that by implementing and going to an 
automated fashion, we would attract a lot of new donors, new 
younger donors, who are used to operating online. So they are 
not going to contribute by filling out a pledge form. They want 
to go online and be able to contribute, or they want to go to 
their smart phone and use an app to contribute.
    So we think we can attract a lot of new donors by going to 
an automated giving environment.
    Mr. Walberg. Okay, thank you. I yield back my time.
    Mr. Farenthold. Thank you very much.
    They have called folks in the House, fortunately we are 
about four minutes away from the Floor here. We have a nice, 
quick way to get there. So I do believe we have time for Mr. 
Davis' round of questions. We will now yield to the gentleman 
from Illinois.
    Mr. Davis. Thank you very much, Mr. Chairman.
    One of the reasons I think I like serving on this 
subcommittee is the practical questions and answers that the 
members give. As you were describing your wife and her 
engagement and involvement in charitable activities, it sounded 
like we had married two sisters.
    [Laughter.]
    Mr. Davis. Charitable, charitable, charitable. I really 
like the ranking member's economic outlook, that you don't 
participate in a way to hurt yourself, that you try and help 
yourself. I can certainly agree with his description of how 
letter carriers might feel in terms of what they do.
    Let me ask each one of you, there has been some expression 
of concern about the proposed changes. And if you, Ms. Pittman 
and Mr. Stein and Ms. Hampton and Mr. Berger could each just 
indicate what is your greatest concern about the proposed 
changes?
    Ms. Pittman. I would say getting input from those 
organizations that are on the front line, who need those 
dollars and those dollars mean a whole lot. And not only that, 
it allows us to leverage those dollars that we get from CFC to 
get other dollars in the community. So it is very important, 
and I would hate to see those dollars disappear because we 
would have to cut back on services.
    Mr. Davis. Mr. Stein?
    Mr. Stein. It would be retaining the local component of the 
campaign and retaining the giving options and testing the 
change of the fee structure at the local level before 
proceeding. And it would also be the establishment of an 
advisory group, as Mr. Berger said, that could advise OPM going 
forward with stakeholders, particularly fund-raising experts, 
people that understand workplace giving, so we could proceed 
with a cautious approach. These are charitable donations. Any 
money lost is services that are denied.
    Mr. Davis. Ms. Hampton?
    Ms. Hampton. I would have to echo what Ms. Pittman and Mr. 
Stein have said. But I also, it goes back to the local 
presence. I also have concerns for the Federal employees, 
because when they have that local presence, they also, they 
themselves know where to go for help, and their families and 
their co-workers. They seem to be a resource to others to tell 
them where to go.
    Oklahoma is a very disaster-prone State. I can tell you, 
there were over 100 families off our military base that were 
affected by these tornadoes, and they knew how to get help. And 
it was thanks to the CFC campaign.
    Mr. Stein. When I was on the CFC 50 Commission, one of the 
things we kept saying, some of us, was, it shouldn't just be 
about the 28 of us telling you what we think. It shouldn't be 
me here telling you what I think. It really should be the 
Federal employees that donate that have an ongoing voice, the 
donors need to have a voice in this on an ongoing basis. That 
is by far, far more than anything else.
    And then also test, test, test. As you heard from a number 
of the remarks, that there are a number of things where we 
don't have the data, we don't know the answer. And that is 
critical, to get those answers and to make informed decisions 
as we move forward with any of these changes.
    Mr. Davis. Let me ask, Mr. Berger, is it your hope that the 
data you have received across the board, as people have 
responded, would also indicate or would also have enough expert 
opinion coming from people who are users of the service, or 
people who are most involved, that that becomes very helpful to 
OPM as it finalizes any new rules?
    Mr. Berger. Absolutely. We value the comments that we have 
gotten through this comment period with the proposed regs. 
Certainly we will thoroughly consider those comments in 
drafting the final version of the regs.
    There seems to be a misunderstanding that we are doing away 
with the local presence of the campaign. And that is not what 
we are looking to do at all. We are not eliminating local 
Federal coordinating committees. We are just changing the names 
to regional coordinating committee to represent the larger 
geographic district that they are going to represent. But they 
still will have that local touch into the Federal agencies and 
each of these local communities will still be able to do that 
solicitation and that personal ask.
    The automated means that we are trying to implement are 
just a means to get those donations in. It is not to eliminate 
that local touch, that local feel, the local interaction that 
currently is there. We want that to continue. We realize the 
importance of that, too.
    Mr. Davis. Thank you very much, Mr. Chairman.
    Mr. Farenthold. Thank you very much, and as we conclude, I 
do think we can sum up a lot of what we have heard here, we 
don't want to take the local aspect out of it, we don't want to 
place the Federal programs out of the reach of the smaller, 
local charities. I think those are two of our big takeaways. We 
have covered a very broad and important topic in a very small 
amount of time.
    But I do think we have gotten the information that we need. 
We have a relatively thorough record here, with your written 
testimony and questions. I would like to thank all the 
witnesses for their involvement in their communities and their 
States and our Country and in the world. Together we are all 
making a difference, and we thank you for taking time to be 
with us and educating us today. The subcommittee now stands 
adjourned.
    [Whereupon, at 2:09 p.m., the subcommittee was adjourned.]

                                 
