CHAPTER G

FUNDRAISING

*Steve Epstein*

Department of Defense Standards of Conduct Office

Office of General Counsel

*March 6, 2003*

# REFERENCES.

## 41 C.F.R. §§ 101-20.3 and 101-20.4: General Services Administration building regulations.

## 32 C.F.R. Part 234: Pentagon Reservation regulation.

## 5 C.F.R. § 2635.808: Fundraising activities.

## 5 C.F.R. Part 950: Solicitation of Federal Civilian and Uniformed Service Personnel for Contributions to Private Voluntary Organizations (Combined Federal Campaign)

## 5 C.F.R. § 735.201, Gambling on Federal Property

## 18 U.S.C. §§ 1301-1307, Lotteries

## DoDD 5035.1, Combined Federal Campaign (CFC) in DoD

## DoDI 5035.5**,** DoD Combined Federal Campaign -- Overseas 

## DoD 5500.7-R, Joint Ethics Regulation (JER) (w/chs 1-4)

## E.O. 12404, Charitable Fundraising (February 10, 1983)

## E.O. 12353, Charitable Fundraising (March 23, 1982)

## OGE DAEOGRAM, Subject: Fundraising Activities (August 25, 1993) 

## OGE DAEOGRAM, Subject: Fundraising Activities \[nonmonetary items\] (March 22, 1994)

## Guidance on Analyzing Invitations to DoD Officials to Participate in Fundraising Activities and to Accept Gifts Related to Events: DoD General Counsel memo, dated August 18, 1997

## Conduct of CFC in DoD: SOCO Advisory, 98-8 (October 22, 1998)

## Army Guidance:

### AR 600-29, Fund-Raising Within the Department of the Army (1 June 2001)

### AR 930-4, Army Emergency Relief (30 August 1994)

## Navy Guidance: SECNAVINST 5340.1: Active Duty Fund Drive in Support of the Navy-Marine Corps Relief Society (8 February 1999)

## Marine Corps Guidance: MCO 5726.14E: Toys for Tots

## Air Force Guidance:

### AFI 36-3101: Fundraising Within the Air Force

### AFI 36-3109, Air Force Aid Society

### HQ USAF/JAG Ethics Update Pamphlet, "Fundraising," August 2001, pages 4-15

### Air Force guidance on the CFC and the Air Force Assistance Fund campaign can be found on the Air Force Personnel Center website: http://www.afpc.randolph.af.mil/votefund/Programs/Fundraising/FUNDRSN.htm

## Internet Locations of Referenced Materials:

### **C.F.R.** http://www.access.gpo.gov/nara/cfr/index.html

### **JER**: http://www.defenselink.mil/dodgc/defense_ethics/

### **Federal statutes**: http://www.legal.gsa.gov/

### **Comptroller General opinions**: http://www.gao.gov/decisions/decision.htm/

### **Executive Orders**: http://www.gpo.gov/su_docs/aces/aces140.html

### **Office of Legal Counsel (DOJ) opinions**: http://www.usdoj.gov/olc/mem_ops.htm

### **DoD Directives, Instructions, and Regulations**: http://www.dtic/whs/directives/

### **Office of Government Ethics**: http://www.usoge.gov/

#  ETHICS PRINCIPLES COMMONLY INVOLVED. 

## Personnel shall not use Government property for [other than authorized purposes]{.underline}.

## Personnel shall not use public office for [private gain]{.underline}.

## Personnel shall not give [preferential treatment]{.underline} to any private organization or individual.

## Personnel shall not hold financial interests that [conflict]{.underline} with their conscientious performance of duty.

#  REGULATORY BACKGROUND.

## Fundraising is complicated because no comprehensive fundraising regulation exists. Instead, it is governed by independent, overlapping, and unrelated regulations including:

### [Site Regulations]{.underline}:

#### GSA Buildings: 41 C.F.R. Subparts 101-20.3 and 20.4

#### Pentagon: 32 C.F.R. Part 234

### [Government-wide fundraising regulations]{.underline}:

#### OGE fundraising regulation: 5 C.F.R. § 2635.808

#### Combined Federal Campaign: 5 C.F.R. § Part 950

### [Agency regulations]{.underline}.

#### DoDD 5410.18: Public Affairs Community Relations Policy

#### DoDI 5410.19: Public Affairs Community Relations Policy Implementation

### [Assorted guidance]{.underline}: 

#### Gambling: JER 2-302

#### OGE DAEOGRAM, August 25, 1993 (Fundraising in general)

#  framework for analysis of fundraising questions.

## By answering the following questions, we can facilitate the accurate and consistent responses to questions involving fundraising.

### What kind of "fundraising" is this?

#### "Fundraising" is defined in 5 C.F.R. § 2635.808(a) as raising funds for a nonprofit organization (other than a political organization) through solicitation of funds or sale of items, or participation in an event in which any portion may be taken as a charitable tax deduction by the person incurring the cost.

#### "Fundraising" is also commonly used to mean raising funds for groups that do not qualify under the above definition (Wives' Clubs, informal ball committees), or collection of gifts-in-kind rather than funds.

### Are we being asked to [solicit]{.underline} funds or gifts-in-kind?

#### Are we being asked to solicit in our [official]{.underline} or [personal]{.underline} capacity?

### Are we being asked to [support]{.underline} events or other efforts involved in fundraising?

#### Are we being asked for [official support]{.underline} or [personal support]{.underline}?

### Are we being asked to [endorse]{.underline} a fundraising effort or solicitation?

#### Are we being asked for an [official]{.underline} or [personal]{.underline} endorsement?

### Is the fundraising for a partisan political event, party, or cause?

# Official Solicitation.

## VERY LIMITED!

## Requires authorization based on statute, Executive Order, regulation, or authority otherwise established by agency, that personnel may participate in official capacity. When so authorized, personnel may use official title, position, authority, and (in some occasions) appropriated funds. (5 C.F.R. § 2635.808(d))

### Combined Federal Campaign:

#### Sources of Guidance:

##### 5 C.F.R. § 2635.808 (Government-wide regulations on fundraising)

##### 5 C.F.R. Part 950 (CFC)

##### DoDD 5035.1 (CFC in DoD)

##### DoDI 5035.5 (CFC in DoD overseas)

##### JER 3-210, 2-302

##### CFC Website: [www.opm.gov/cfc](http://www.opm.gov/cfc)

#### Fundraising events such as car washes, raffles, bake sales, and races are encouraged. 

#### Lotteries permitted, when in compliance with gambling regulations. (See guidance on gambling, below in this chapter.)

#### Limited use of appropriated funds authorized: kick-off events, awards. Overseas program may receive administrative and logistical support and \"space available \" transportation. (DoDI 5035.5, SOCO Advisory 98-8 of October 22, *1998; But see, IRS Purchase of T-Shirts for Employees Contributing Certain Amounts to the Combined Federal Campaign*, 70 Comp. Gen. 248 (February 8, 1991))

#### Use of DoD facilities, installations, or equipment, such as tours of warships, rounds of golf with agency head, rides in military aircraft, tours of historic base housing, may be permitted by local commands and organizations. (Must resolve issues of appropriate use of resources, interference with mission, and placing inappropriate pressure on senior officials to volunteer for CFC activities.)

#### Contributions must be truly voluntary. Directive guarantees freedom of choice to give or not give, and guarantees confidentiality of donation decision. Be alert for undue command pressure to contribute.

#### May also [officially]{.underline} [endorse]{.underline} CFC. JER 3-210 (Including use of title and position.) (See Example 1 to 5 C.F.R. § 2635.808 (b))

#### ***Beware***: Official support does not include official solicitation of individuals or entities that are not Federal employees.

#### May also [officially support]{.underline} CFC events. (JER 3-210)

#### Marine Corps Only: Toys for Tots (Marine Corps Reserve) MCO 5226.14E

#  Official support.

## Military Relief Societies: Support is permitted by 5 C.F.R. Part 950 (Authority to solicit in the Federal workplace), which allows support of \"solicitations conducted by organizations composed of civilian employees or members of the uniformed services among their own members for organizational support or for the benefit of welfare funds for their members.\"

### Military Department Guidance:

#### Army: AR 930-4, Army Emergency Relief (30 August 1994)

#### Navy: SECNAVINST 5340.1: Active Duty Fund Drive in Support of Navy-Marine Corps Relief Society

#### Air Force: AFI 36-3101: Fundraising Within the Air Force

### Use of appropriated funds determined by Military Departments.

### Lotteries are permitted in the Navy Department in support of Navy-Marine Corps Relief Society.

### May also officially [endorse]{.underline} fundraising. (JER 3-210)

## Support of fundraising for other non-Federal entities must be in accord with JER 3-211. See prior chapter on Non-Federal Entities for detailed guidance.

## Emergency and disaster appeals approved by Office of Personnel Management (5 C.F.R. § 950.102(a))

## National Guard. Charitable, community, or civic organizations as identified in 32 U.S.C. 508 and DoD 1100.20, when approved by head of DoD component command or organization after consultation with DAEO or designee. **Voluntary** assistance or contribution only. May also officially [endorse]{.underline} fundraising. (JER 3-210)

## Combined Federal Campaign. (5 C.F.R. Part 950)

## Government-wide fundraising regulations (5 C.F.R. § 950.102 (a)) prohibit fundraising in the Federal workplace.

#### **Exceptions**: 

##### Collections of gifts-in-kind (5 C.F.R. § 950.102(b))

##### Solicitations among agency members for benefit of agency members (5 C.F.R. § 950.102(d))

#### \"Federal workplace\" is defined by Agency Head consistent with GSA and other regulations. (5 C.F.R. § 950.102(b)) (SecDef, at JER 3-211b delegates this determination to the head of DoD component commands or organizations.)

## Organization heads may permit personnel to solicit in their personal capacity in designated areas on Federal installations. (**non-workplace**) (JER 3-300a(2))

## May use official channels to notify DoD personnel of events of interest sponsored by non-Federal entities. (JER 3-208)

## **GSA controlled property,** 41 C.F.R. 101-20.308(a) permits solicitations on GSA controlled property for campaigns authorized in 5 C.F.R. parts 110 and 950.

## **GSA controlled property:** Organizations that have leased space for commercial, cultural, educational, or recreational use may be permitted (by the GSA Building Manager) to solicit. (41 C.F.R. § 101-20.308(d))

## Use of position or title constitutes official support. **Problem area**: organizations ask senior officials to visibly participate at fundraising events. (e.g., receive an award, give a speech, present an award, accept position as \"Honorary Chairperson\"). Senior officials thus become the \"star attraction\" for the fundraiser. Such support is prohibited except for \"mere attendance\" or delivering an official speech in accordance with public affairs directives. (DoDD 5410.18) (See previous chapter on Non-Federal Entities)

# Official Endorsement.

## DoD activities have authority to officially endorse fundraising for the following: (5 C.F.R. § 2635.808(b), JER 3-210)

### Combined Federal Campaign (CFC)

### Army Emergency Relief

### Navy-Marine Corps Relief Society

### Air Force Assistance Fund

### Emergency and disaster appeals approved by the Office of Personnel Management

### Organizations composed primarily of DoD personnel or their dependents when fundraising among their own members for the benefit of welfare funds for their own members or their dependents when approved by head of the DoD Component command or organization after consultation with the DAEO or designee.

### National Guard. Charitable, community, or civic organizations as identified in 32 U.S.C. 508 and DoD 1100.20, when approved by head of DoD component command or organization after consultation with DAEO or designee. 

# personal solicitation, support, and endorsement.

## **General Rule**: Fundraising in a personal capacity is prohibited in the workplace because it disrupts the workplace, competes with CFC for donations, invites an abuse of power by superiors, and tempts subordinates to contribute in order to curry favor with superiors.

## Site regulations: **If on GSA controlled property,** personnel may not solicit alms, solicit business, sell, or display advertising. (41 C.F.R. Subparts 101-20.3 and 101-20.4)

### \"Alms\" include non-monetary items. However, OPM advises that this regulation does not prohibit employees from placing collection boxes in public parts of building to collect food or clothing for charity. (OGE DAEOGRAM, August 25, 1993, OGE DAEOGRAM, March 23, 1994)

### 41 C.F.R. § 101-20.308(d) exempts organizations that lease public areas of the building for cultural, educational, and recreational activities from this prohibition. Organizations must obtain permit from the GSA Building Manager and may not disrupt official business.

## Government-wide fundraising regulations (5 C.F.R. § 950.102 (a)) prohibit fundraising in the Federal workplace

#### **Exceptions**: 

##### Collections of gifts-in-kind (5 C.F.R. § 950.102(b))

##### Solicitations among agency members for benefit of agency members (5 C.F.R. § 950.102(d))

#### \"Federal workplace\" is defined by Agency Head consistent with GSA and other regulations. (5 C.F.R. § 950.102(b)) (SecDef, at JER 3-211b delegates this determination to the head of DoD component commands or organizations.)

## May not solicit from subordinates or prohibited source. (5 C.F.R. § 2635.808(c)) Prohibition of personal solicitation applies to person-to-person communications and use of name on correspondence. Solicitations through media or mass mailings are permitted (unless targeted at subordinates or prohibited sources).

## Organization heads may permit personnel to solicit in their personal capacity in designated areas on Federal installations. (**non-workplace**) (JER 3-300a(2))

## DoD employees may voluntarily participate in fundraising for non-Federal entities; they must act exclusively outside the scope of their official positions. (JER 3-300a)

#  fundraising for partisan political parties, events, or causes.

## Generally, there may be no official support for or endorsement of partisan political fundraising efforts. DoD personnel acting in their personal capacities are also limited in such fundraising depending upon their status (military personnel, career civilian, non-career civilian appointee, career SES, or local political jurisdiction). See JER Chapter 6 for guidance on political activities.

#  common fundraising requests.

## [Request for official letter of endorsement or support for non-Federal entity (USO, AUSA, Joe's Barbershop) for fundraising mailing]{.underline}

### Official endorsement prohibited. JER 3-209, 5 C.F.R. § 635.702(c). If appropriate, may prepare factual acknowledgement of services received from non-Federal entity.

## [Request for senior official to sit at head table, or be an honorary chairman for fundraising dinner]{.underline}

### Unless senior official has a prior personal relationship with the non-Federal entity, there is a good likelihood the senior was invited due to his or her official status. By sitting at the head table or accepting a position as honorary chairman, the official plays "an active and visible" role in the fundraiser, which is prohibited by 5 C.F.R. § 2635.808.

## [Request for installation wives' club to hold bake sale]{.underline}

### Support for fundraiser may be authorized using the analysis in JER 3-211. Since the club is one of only a few similar organizations (Organizations composed of the installation's personnel and dependents, whose sole purpose is to support the installation's personnel and dependents.) it is possible to a provide the club a place to hold the bake sale (preferably not in the workplace) without giving the club preferential treatment. Furthermore, since the club is only fundraising among its own members (installation personnel) the bake sale may receive an official endorsement. (JER 3-210)

## [Requests for DoD keynote speaker]{.underline}:

### Must comply with 5 C.F.R. § 2635.808, DoDI 5410.19 (Enclosure 4), and JER 3-211. DoD personnel may not actively and visibly participate in the promotion, production, or presentation of the event, but may merely attend or deliver an official speech at an event that is an appropriate forum. Use the factors in JER 3-211 to determine if the event is appropriate for support. As long as the official makes the determination and does not solicit donations or other support for the organization, the speech may be made. Be cautious of endorsement aspects. If the guise of the invitation is to receive an award, make sure that the awardee is also making an official speech, because that is the only exception that allows the individual to accept the award at the fundraiser.

## [Requests for DoD Bands:]{.underline} 

### Military bands and choral groups may not be provided to fundraising events. See DoDD 5410.18 sections 4.2.4.2. and 4.8 and Enclosure 8 to DoDI 5410.19.

## [Requests for DoD personnel to attend fundraising dinner]{.underline}:

###  Assuming that the invited DoD personnel do not have a pre-existing personal relationship with the non-Federal entity, they will be attending in their official capacity. Since the invited DoD personnel are not playing an active and visible role in the event, and as long as their presence is not used to promote the event, they may "merely attend" in accordance with 5 C.F.R. § 2635.808. (Please note that military personnel in uniform create an "active and visible" presence, even if they have no formal role in the event.) Since DoD personnel have been invited because of their official capacity, they must pay for the dinner or find an appropriate gift exception that would allow them to accept an offer free attendance.

#  RELATED ISSUES.

## Gambling

### JER 2-302 prohibits gambling on Government property or while on official duty. (Several exceptions exist, including an exception for organizations composed primarily of DoD personnel or their dependents when fundraising among their own members for the benefit of welfare funds for their own members or their dependents when approved by the head of the DoD Component command or organization after consultation with the DAEO or designee, and subject to the limitations of local law and other JER provisions.)

### Office of Personnel Management (OPM) at 5 C.F.R. 735.201 prohibits civilian employees from gambling while on duty or while on Government-owned or leased property unless necessitated by the employee\'s official duties.

### Gambling Defined: Gambling is generally considered to have three elements: (State statutes or case law may pertain, but see Brooklyn Daily Eagle v. Voorhies, C.C.N.Y 1910, 181 F. 579.)

#### Consideration (betting something of value, usually money),

#### A game of chance, and

#### An offering of a prize. Events that do not include all of these elements are not considered to be gambling. For example, a drawing using a CFC pledge card, [when it is clear that the pledge card may include no contribution at all]{.underline}, is not gambling because the participants in the drawing are not required to furnish consideration to enter the drawing.

### The rules on lotteries are discussed in Matter of Prize Drawing by General Services Administration's Public Buildings Service, Comp. Gen. Dec. B-286536, November 17, 2000. 

## Political Fundraising. See Chapter D, \"Outside Activities\" for discussion. However, the short answer is that military personnel and civilian employees of DoD may not solicit, accept, or receive funds for partisan political activities.

# FUNDRAISING IN THE AFTERMATH OF DISASTERS. 

## Practical Advice \-\-- leave fundraising to the professionals. Identify established charitable organizations with disaster relief missions and direct donors to those organizations.

### Advantages. Established charities have the resources and experience to receive, account for, and distribute donations (and tax-exempt status!).

### Must avoid preferential treatment to any particular organization. Implement objective criteria for referral of donors.

## If your organization does conduct fundraising, all of the rules apply. General rule is that workplace fundraising, other than CFC, is prohibited.

### Contact Office of the Director, OPM ((202)-606-2564), for approval to conduct disaster-related workplace fundraising.

### OPM approval unnecessary if fundraising involved an organization composed of members/employees among their own members. 5 C.F.R. § 950.102(d)

## Summary of fundraising and other disaster-related ethics issues, *See* Antolin-Jenkins and Epstein, "How Can We Help? Ethics Issues in Disaster Relief," [Federal Ethics Report]{.underline}, CCH, November 2001.

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