59

want to respond to the diverse charity interests of their employees.
As a result, these corporate campaigns are also more successful
than previous limited choice campaigns.

Third, no charity is getting a free ride in the CFC. The direct
costs are paid by charities in the amount of $15 to $20 million per
year. They pay for printed campaign materials, the management of
the campaign and the distribution of contributions.

Compared to workplace campaigns run by many corporations,
the Federal Government contributes far less in average volunteer
time and none of the millions of dollars in direct costs absorbed by
companies.

Finally, I believe that the concept of advocacy is being viewed in-
appropriately in the debate around the CFC. None of the charities
participating in the CFC are political advocacy organizations. None
support political candidates.

ome do lobbying to the degree allowed by the tight restrictions
placed on charities by the IRS. Whether it is advocacy on behalf
of the blind, disabled, abused children, veterans, for medical re-
search, against drunk driving or against domestic violence, advo-
cacy activities are part of the tradition of our free society. They
each have an ideology, but we support their freedom to do so.

Advocacy and free speech are the cornerstones of our democratic
ideal. The charities in the CFC today are no more or less controver-
sial than other institutions of our society. They are merely a reflec-
tion of the healthy, vibrant free speech values that keep our coun-
try strong.

Employees are really ahead of us in their thinking. They recog-
nize that the issues of the 1990’s are far different from the issues
of the 1950’s and 1960's.

I believe that the central purpose of workplace-giving campaigns
nationwide, including the CFC, is to demonstrate the unique Amer-
ican commitment to caring and sharing. This commitment recog-
nizes that our country is stronger when every American institution
and employer, public or private, plays a significant role in charity
activity.

Charity campaigns should not seek to control or arbitrarily limit
the charity choices of employees but simply provide a forum for em-
ployees to make a free choice to give or not and then trust the wis-
dom and judgment of our employees.

In conclusion, I would urge that the committee recognize the ben-
efit of less government intervention and to refrain from legislation
that would harm the CFC charity service and be contrary to the
interests of the Federal employee taxpayers themselves.

Thank you very much.

Mrs. MORELLA [presiding]. Thank you very much, Mr. Sodo.

(The prepared statement of Mr. Sodo follows:]


128

-1-
~ Columbia held that the CFC was a channel of First Amendment expression and that the Carter
Administration's ‘direct services’ requirement does not meet First Amendment standards. It
is nowhere defined and the term, standing alone, is too vague to comport with the strict
standards of specificity required when limits are placed on First Amendment activity." NAACP
Legal Defense and Educational Fund, Inc. v. Campbell, 504 F.Supp. 1365, 1367 (D.D.C.
1981). Although Judge Gesell declined to award the LDF a share of the already-completed
1980 campaign (“there already are vested interests by other groups in the receipts"), OPM was
ordered not to reject any pending or future application by the legal defense funds on the “direct
services" ground. NAACP Legal Defense and Educational Fund, Inc., supra, $04 F.Supp. at
1369. Judge Gesell closed his opinion with an exhortation to “the government officials
responsible for the program to re-examine the basic premises on which the program was
established so that more acceptable standards can be developed which will-assure continuation
of the government's significant and useful support for worthy charitable solicitation." Ibid. It
was a plea that the government officials who became responsible for the CFC on the very next
day -- President Reagan and his first OPM Director, Donald J, Devine -- would take up in

camest.

‘The Reagan Attempts at Reform
‘The first CFC drive held during the Reagan years, in the fall of 1981, was carried out
under the Carter rules as modified by Judge Gesell's decision. It was a jury-rigged affair, with

all previously eligible participants included and no one who sued or threatened to sue excluded,

© A copy of the full text of the court's decision is set forth at the Appendix,
Exhibit 6.


25

when charitable drives were opened up to more charities. In
addition, payroll deductions play a significant role in an
employee's ability and willingness to give. It is easy to say
that Federal workers should "...place their contribution in an
envelope and drop their checks in the mail," but the truth is
this will not happen, and the repercussions are modest
donations and failed programs.

There are OPM regulations that outline the requirements
for being CFC eligibie and IRS regulations that outline
requirements for being considered a public charity. If
organizations are outside this scope, they should scale back
or face being removed from the program. We should not
seek additional legislation. We should merely enforce the

laws and rules that are currently on the books.

Regarding the issue of subsidizing "advocacy groups”
with taxpayer money, James B. King, Director of the Office
of Personnel Management, the agency which oversees the
CFC, explained that the costs (staff time) to taxpayers are
essentially fixed costs and "...are the same whether we have
10 organizations participating in the CFC, 100 participating
or more participating.” Director King also mentioned that the


154

TESTIMONY OF THE HONORABLE STENY H. HOYER
ON THE COMBINED FEDERAL CAMPAIGN
BEFORE THE SUBCOMMITTEE ON CIVIL SERVICE
COMMITTEE ON GOVERNMENT REFORM AND OVERSIGHT

June 7, 1995

Mr. Chairman, I want to express my serious concerns about
any efforts to further limit participation in the Combined
Federal Campaign.

In 1986, a similar attempt was made to restrict the Combined
Federal Campaign (CFC) to so-called "traditional charities.”
Because the definition of a traditional charity was so
restrictive that many organizations providing valuable services
would have been excluded from participation, Senator Hatfield and
I developed legislation which was passed on July 2, 1986, and
signed by President Reagan allowing the Office of Personnel
Management to run the 1986 CFC under the 1984 rules.

Subsequently, in the autumn of 1986, we developed
legislation which was also passed and signed by President Reagan
ensuring that the 1987 CFC would operate under the same concepts.

Senator DeConcini and I included further legislation in the
omnibus Fiscal 1988 spending bill, again signed by President
Reagan, which ensured that all charities would be eligible if
they met the qualification standards set out in 26 U.S.C. Section
501(c) (3) of the Internal Revenue Code.

Charities that qualified as 501(c)(3) organizations could
participate as long as they provided human health and welfare
service, benefits, assistance, or program activities.
Contributions to charities which were "written in" by an employee
were eliminated and a national eligibility process took the
burden off individual Local Federal Coordinating Committees for
deciding the eligibility of organizations applying for
membership. Provisions were made for undesignated contributions
to be shared with national and local charities.

Status as a 501(c)(3) corporation places restrictions on
charities’ funding for lobbying and grassroots activities.

From 1979 to 1983, giving to the Combined Federal Campaign
rose 137 percent -~ from $83 million to $197 million. Part of
this increase may be attributable to the increase in the number
of charities from 46 in 1980 to 155 in 1983.



149

The gifts are coming down, the participation rates are coming
down, the per capita gifts appear to be coming down although that
may be an open question, but the costs are going up and therefore
necessarily the percentage of the cost to contribution ratio——

Mr. Mica. I wanted to ask Mr. Devine about costs. You said it
cost zip. Was that 1980?

Mr. DEVINE. It didn’t cost zip. Zip is the amount that people ac-
tually chose to go to the charity that they wanted it to go.

Mr. Mica. The hundred percent designation; well, nondesigna-
tion. What were the costs in the 1980’s when you took over?

Mr. DEVINE. This cost thing, nobody has ever had a handle on
it. By the way, Mr. Morris mentioned some of the costs. I think
probably the largest cost nobody has even mentioned here, except
as a benefit, is the payroll deduction—80 percent of the people who
contribute are involved in payroll deduction which means that they
have to make a change that goes through the payroll system of
every department in the government. That isn’t counted at all in
the figures kept by the government.

Mr. Mica. From that with 80 percent participating I should be
able to get the information on how much is coming out and how
much they are writing a check to each charity for; is that correct?

Mr. DEVINE. You should require OPM to write to the local cam-
paigns, which is where that information exists.

Mr. Mica. But what stuns me is nobody has a handle on how
much money the government is collecting or distributing. I have
not seen that. A few individual charities and groups have disclosed
to us the amounts, but we don’t see the final figures, which I think
should be public.

Mr. Morris. Mr. Chairman, may I underscore what Mr. Devine
has just said? Those back office costs have been completely ignored.

We talked about the upfront costs of promotion, of solicitation,
the key workers and so forth, but the back office cost of processing
payroll deductions, collecting the money, assembling the money,
putting it in funds, cutting checks and sending them to the char-
ities, all those back office costs have never been accounted for.

Mr. Mica. Dr. Devine.

Mr. DEVINE. You talked about participation and when it dropped
off. If you look through the 1970’s, 1980’s you have 2.8 million, 2.8
million, 2.7 million, 2.7, 2.8 million, 2.7, 2.7, 2.7, 2.7—1980, 2.2,
these according to the numbers we had when I was Director of
OPM. It is very clear that participation rates started going down
dramatically when the campaign became politicized. Then it went
down again and my figures show down about 500,000 as opposed.
to 300,000-—_

Mr. Mica. I see the difference, because you were talking about
number of contributors and then number solicited, which would be
the total number of employees at that time. So you are correct that
it is in excess of a half a million drop off just at that one point.
Then the percentage changes.

One of the problems I have now in approaching this is you can
see these folks have established tremendous pressure groups and
it is very difficult to stand up to them, and it is. You have heard
the campaigns that have already been organized both by the legiti-
mate charities who feel that there is some possible harm could be


COMMITTEE ON GOVERNMENT REFORM AND OVERSIGHT
WILLIAM F. CLINGER, JRr., Pennsylvania, Chairman

BENJAMIN A. GILMAN, New York CARDISS COLLINS, Illinois
DAN BURTON, Indiana HENRY A. WAXMAN, California
J. DENNIS HASTERT, Ilinois TOM LANTOS, California
CONSTANCE A. MORELLA, Maryland ROBERT E. WISE, Jr., West Virginia
CHRISTOPHER SHAYS, Connecticut MAJOR R. OWENS, New York
STEVEN SCHIFF, New Mexico EDOLPHUS TOWNS, New York
ILEANA ROS-LEHTINEN, Florida JOHN M. SPRATT, Jr., South Carolina
WILLIAM H. ZELIFF, Jr., New Hampshire LOUISE McINTOSH SLAUGHTER, New
JOHN M. McHUGH, New York York
STEPHEN HORN, California PAUL E. KANJORSKI, Pennsylvania
JOHN L. MICA, Florida GARY A. CONDIT, California
PETER BLUTE, Massachusetts COLLIN C. PETERSON, Minnesota
THOMAS M. DAVIS, Virginia KAREN L, THURMAN, Florida
DAVID M. McINTOSH, Indiana CAROLYN B. MALONEY, New York
JON D. FOX, Pennsylvania THOMAS M. BARRETT, Wisconsin
RANDY TATE, Washington GENE TAYLOR, Mississippi
DICK CHRYSLER, Michigan BARBARA-ROSE COLLINS, Michigan
GIL GUTKNECHT, Minnesota ELEANOR HOLMES NORTON, District of
MARK E. SOUDER, Indiana Columbia
WILLIAM J. MARTINI, New Jersey JAMES P. MORAN, Virginia
JOE SCARBOROUGH, Florida GENE GREEN, Texas
JOHN B. SHADEGG, Arizona CARRIE P. MEEK, Florida
MICHAEL PATRICK FLANAGAN, Illinois FRANK MASCARA, Pennsylvania
CHARLES F. BASS, New Hampshire CHAKA FATTAH, Pennsylvania
STEVEN C. LATOURETTE, Ohio
MARSHALL “MARK” SANFORD, South BERNARD SANDERS, Vermont

Carolina (Independent)

ROBERT L. EHRLICH, JR., Maryland

James L, CLARKE, Staff Director
KevIN SABO, General Counsel
duprt McCoy, Chief Clerk

Bub MYERS, Minority Staff Director

SUBCOMMITTEE ON CIVIL SERVICE
JOHN L. MICA, Florida, Chairman

CHARLES F. BASS, New Hampshire JAMES P. MORAN, Virginia
BENJAMIN A. GILMAN, New York BERNARD SANDERS, Vermont (Ind.)
DAN BURTON, Indiana FRANK MASCARA, Pennsylvania

CONSTANCE A. MORELLA, Maryland
Ex OFFICIO

WILLIAM F. CLINGER, JR, Pennsylvania CARDISS COLLINS, Illinois
GroRGE NESTERCZUK, Staff Director
Garry Ewixo, Counsel
CAROLINE FIEL, Clerk
Cepric HENDRICKS, Minority Professional Staff
Mies Q. ROMNEY, Minority Professional Staff

dD


pet)

-8

or that render health and welfare services directly to needy people. The term “national” as used
in the Kennedy order was generally perceived as requiring beneficiary agencies to render service
‘on a nationwide scale or to address a problem, such as a major disease, whose incidence was
pervasive across the country. Early on a conspicuous exception to the principle of “national”
scope was read into the Kennedy criterion’s second clause, “such other agencies as may be
appropriate”: CFC participation was granted to charities that, although purely local, directly
benefitted the Federal community, such as health and welfare funds on overseas military bases
and support funds for the widows and orphans of Federal law enforcement officers killed in the
line of duty. And from the beginning, local human health and welfare charities, including the
local branches or affiliates of nationat agencies such as the American Red Cross, the American
Heart Association, and the American Cancer Society took part, typically organized through the
local United Way, Community Chest, Crusade of Mercy, or similar umbrella entity."*

By the late 1970s, however, the human health and welfare agencies had been joined in
the world of mass-market charitable solicitation by an ever-growing number of not-for-profit
organizations whose activities were quite dissimilar. Some of these other philanthropies are of
an “elite* nature, such as private schools and universities, art museums, opera companies, and
sports associations. Other agencies, typically of a newer vintage, are the "advocacy" groups,

such as legal defense funds, public policy research organizations, and groups that seek to address

human and social needs not by direct remedial action, but by stimulating governmental

' Planned Parenthood in its various manifestations also became an
entrenched participant in the CFC during the Carter years, taking part at the
national level as an “International Service Agency” and often “double-dipping"
by holding an additional position in many local CFCs, typically as an affiliate or
beneficiary of the local United Way or its equivalent.


68

of the panel does, regarding the particular worthiness of individual
charities on the list. And many of the charities that participate in
the CFC I don’t think are worth a dime—compared to the ones I
like. But the problem is, who’s to say? And is my list very different
than yours? I believe that’s the case.

As one very personal example, my son is a Korean orphan that
is graduating from high school in Alexandria next week. We adopt-
ed him through Holt International Children’s Services, which is a
Combined Federal Campaign funded organization. In the course of
their good work, they testified to the motivation provided by their
belief in Jesus Christ. It’s a Christian organization. Does the fact
that they do that turn them into an advocacy organization?

And if the answer to that is, no, that’s not what we meant,
what’s going to happen next year? Who is going to decide then?
How do we try to define something as fuzzy as advocacy?

In fact, I don’t think any of us can separate our actions from our
motivations. They are intricately entwined. And, in fact, I think the
donor wants to know what motivates an organization. So when I
became involved in the governance I had to raise the question of,
am I going to serve those organizations that I might disagree with
as well as those that I support? And my answer was yes.

Because I believe that we have to take the same course that the
Founding Fathers did, and that is trust the people. The people are
going to make choices that reflect what we as a society believe, and
we have to believe that we as a society are going to find the right
course and pick the right charities to support.

The third point I wish to make is the one of the ramifications of
this change that’s being considered. The history of the CFC is rich
with very strong efforts on the part of the civil servants, on the
part of the military personnel, to be able to give to who they wish.
And the CFC has changed as a result, as has been noted here. And
we've also noted the increase in contributions and the general suc-
cess of that course of action.

The average military member, the average civil servant is very
well informed, as you’ve noted earlier. We are very much pleased
with the way things are now. I’ve been through lots of iterations
of this campaign, and it’s better now than I’ve ever seen it before.
I think if there is an effort to take away from the Federal employee
the right to choose that there will be a very adverse reaction.

As has been noted, this is voluntary. We give because we choose
to. Most of us are fairly independent and don’t like being told who
we can give to. My concern is that if the committee, if the Congress
follows this course and attempts to establish some criteria of wor-
thiness for who participates that the reaction from the giving popu-
lous, the donors inside the Federal workplace, will be to walk away
from the CFC.

If we do that, the dollars are, of course, going to drop. The
amount of good that is going to be accomplished is going to suffer.
And at a time when our Nation is expecting more and more out of
charitable organizations, to pick up and care for our fellow man,
we're going to see damage to this Nation that I don’t want to see
at all.

And so, in summary, I would just say I think things are good.
I think we are on the right course in executing the campaign as


152

the costs would bar most charities from participating under current
rules. Is that accurate?

Mr. Devine. I don’t think I said that, but the 11 percent OPM
minimal estimate, 7 percent which the agencies—the local funds
get as their fee, is 18 percent right there. You add the back-end
costs, it’s going to be up near 25 percent. Now, the very rules we
promulgate here ask you to start getting suspicious of charities
when the administrative costs go over 25 percent, which is what
we're getting close to there.

Mr. Mica. And again, in the private sector, what kind of restric-
tions are there according to IRS codes or other qualifications for
administrative costs for charitable administration? Are you familiar
with those, Mr. Morris?

Mr. Morris. You are saying what restrictions are there?

Mr. Mica. What limitations. I mean, a group can’t spend 100 per-
cent of its money on fundraising administrative costs to charitable
group and qualify, it’s my understanding.

Mr. Morris. As I——

Mr. Mica. Is there sort of SOP, standard operating procedures,
to qualify.

r. Morris. The 25 percent figure is a pretty universal red flag.

Mr. BARRETT. Excuse me. There is a group in New York called
the National Charities Information Bureau which reviews charities
and their standard is 50 percent.

Mr. Mica. What is it?

Mr. BarRRETT. Fifty percent for administration of fundraising.

Mr. Mica. Up to 50 percent.

Mr. BARRETT. Up to 50 percent.

Mr. Mica. That’s acceptable.

Mr. Devine. And of course if you are involved in direct mail, it
would be much, much higher than that. I mean, this is not exces-
sive in that amount, I would argue, but it’s not nothing either.

Mr. Morris. Mr. Chairman, let’s be clear, of course, that this
question is a little bit different from the question of the constitu-
tional validity of, say, the IRS imposing some such requirement or,
say, a local government imposing some cap on overhead as a per-
centage of amount collected as a condition of existing or soliciting.

That case went to the U.S. Supreme Court a decade-and-a-half
ago in a case came up called the Village of Chambry, IL, and the
Supreme Court said, you can’t constitutionally condition solicitation
on a limitation on overhead because—and the case of the use of di-
rect mail, for example, by political organizations is an excellent
case in point.

Sometimes the whole purpose of the solicitation on the fundrais-
ing is simply to get the message out. A charity may legitimately
collect money solely for the purpose of communicating a message.
The Supreme Court told us that’s a first amendment issue, so
that’s a little bit different from the question of what kind of yard-
stick qu use to decide whether or not, as a donor or as somebody
subsidizing a charity collection effort, you're getting bang for your
buck in terms of delivery of services.

Mr. Mica. Well, I guess in conclusion here, I’d like to ask the
panelists if you have any additional recommendations either in
changing any of the rules or any of the procedures, anything that


9

it did not provide “direct benefits’ to persons in need. This basis is as ill-founded today as
it was then. ‘The Legal Defense Fund's central purpose is to provide direct and tangible
benefits to its clients, and its success is measured in hundreds of millions of doltars. Thus,
just in the period 1980-95 while the Legal Defense Fund has participated in the CFC the
following benefits in the areas of health. education. and income maintenance have been
received by our clients — and this $s Just 2 partial list

© Every year since 1990, 120,000 poor children of all races have been tested by
the State of California for the level of lead in their blood as a result of the
consent decree in Matthew x. Cove:

© Hundreds of millions of extra dollars have been invested in inner-city and
previously segregated school districts to upgrade and improve the education
provided to low-income school children of all races as a result of LDF-
supported litigation in cases across the country;

‘© Imone case involving the Shoney's restaurant chain nationwide, lower-income
minority workers have received over $100,000,000 in back pay, as well as
receiving jobs in this all-important service industry. Other cases have
provided monetary benefits in the form of back pay in excess of $50,000,000,
as well as jobs and promotions to thousands of persons denied them in
violation of the laws of the United States. Federal employees have received
back pay in excess of $10,000,000 in cases involving the Air Force, Army,
Postal Service, and the Department of Commerce, among others, as well as
promotions and jobs worth much more over the span of the careers of the
beneficiaries of the litigation,

‘*  In-acase involving the public housing authority of the City of Newark, New
Jersey, the city was planning to destroy existing public housing without
replacing any of it. thus driving thousands of additional poor persons into the
ranks of the homeless. LDF joined with legal services organizations and
successfully blocked demolition: a consent decree requires the city to camry
‘out its legal and contractual obligations with HUD to replace public housing
units one-for-one as they are demolished. ‘The result is that approximately
$100,000,000 will be spent that directly benefits the poor by the construction
‘of new, affordable housing;

© In a case in Boston, Massachusetts, LDF-supported litigation resulted in
banks agreeing to provide $11,000,000 in low-interest home improvement
loans to low-income home owners who had been victimized by shady
construction companies.

‘The efficiency of the Legal Defense Fund's work is demonstrated by the fact that
‘our budget in 1994 was $8,000,000, and has never been more than $10,000,000.

4


15

I have no doubt that our figures are more reliable than
the 1988 estimate. The 1988 figure was based on assumptions that
are clearly faulty. Our estimate, which I have outlined in detail,
is based on a good-faith effort to arrive at realistic figures.

However, even our $22.1 million figure overestimates the
indirect costs, because we believe that every dollar spent on the
CFC campaign is not an hour lost to government.

Your fourth question was how much money the CFC raised in
1994 and how long the campaign laste:

Mr. Chairman, the 1994 campaign lasted six weeks,
although local officials can extend that period, and, as indicated,
raised about $195 million in donations from more than 1.8 million
contributors.

Fifth, you asked if it is proper for the taxpayers to
subsidize the CPC, particularly when many of its donees may be
considered controversial.

Mr. Chairman, Americans believe in volunteeriem, and
there exiete in the private sector a well-known tradition of giving
at the workplace. I believe it is entirely proper for federal
workere to make this outstanding effort that over the years has
raised literally billions of dollars for worthy caus:

I agree that thore are individuals up and down the
political spectrum who may find certain organizations not to their
liking, but I believe most CFC participants think theirs is a broad
and balanced list that includes literally hundreds of charities
they consider worthy of support.

I might note that little controversy has surrounded the
campaign in recent years, in contrast to the 1980s, when there were
many lawsuits and much acrimony regarding participation. It would
be a mistake to return to the ill-will and turmoil of the past.

If the subcommittee has specific proposals for improving
CFC, we will be glad to comnent on them. If the Co:

rules to guide the CFC, we will enforce them. But
Say that we do not consider crc to be in need of major changes.

I will be glad to take your questions.

+t


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128

“17-
censure that his or her gift did not go to an undesired recipient was to earmark the contribution
for a desired beneficiary.

Nonetheless, the results of the experiment were mixed. In some parts of the nation the
politicization of the CFC caused palpable dectines in overall charitable giving. Heavily
unionized Bremerton, Washington, where distaste for the CFC's admission of the National Right
to Work Legal Defense and Education Fund bubbled over, was a case in point.“ In the end,
total contributions in the 1982 CFC amounted to about $99,000,000, a 3.8% increase over 1981.
That was a decline, however, from 1981's 9.6% rate of growth over 1980. Although total
dollars increased, albeit at a slowing rate, total participation felt off: In 1981 64.7% of all
Federal employees took part in the CFC; in 1982 only 63.2% did so. One aspect of the CFC

that increased dramatically was designations: In 1981 only 49.5%, fewer than half, of all CFC

gifts were earmarked for a particular recipient charity; in 1982 62.7% of all contributions were
designated.”

In the wake of the 1982 campaign it became clear that each successive solicitation drive
would involve ever greater numbers of participating tax-exempt entities. Inquiries from
organizations all over the country to OPM’s offices increased exponentially. Numbers of entities
participating in local campaigns would clearly double or triple annually in each foreseeable year.
Congresswoman Pat Schroeder sensed that the Administration might reconsider the CFC's

groundrules and wrote to Director Devine urging that there be no curtailment of eligibility."

“* See Appendix, Exhibit 18.

* Source: Memorandum for OPM General Counsel Joseph A. Morris from
OPM Office of Regional Operations (June 28, 1983),

5! See Appendix, Exhibit 19.


184

-2B-
‘The Reagan Reforms Repulsed

Yet, before President Reagan's Executive Order could be fully implemented and the 1983
OPM regulations effectuated, they were gutted by acts of Congress. In the first full CFC cycle
following the Supreme Court's decision in Cornelius, Congress passed the "Hoyer Amendment”,
Section 204 of the Urgent Supplemental Appropriations Act of 1986, Pub.L. 99-349, which
prohibited the use of any appropriated funds for the implementation of new CFC regulations
“unless such regulations provide that any charitable organization which participated in any prior
campaign shall be allowed to participate in the 1986 campaign." The Hoyer Amendment was
upheld and judicially enforced in Planned Parenthood of Metropolitan Washington, D.C. v.
Horner, 694 F Supp. 970 (D.D.C. 1986).

Then, on December 22, 1987, the Continuing Appropriations Act for Fiscal Year 1988,
Pub.L. 100-202, was enacted, including a lengthy provision at Section 618 in which Congress,
regulating the use of "the funds appropriate by this Act, or any other Act in this or any fiscal
year hereafter",** adopted CFC eligibility standards that effectively reversed President Reagan's
1983 Executive Order. Congress simply ruted out any prohibition against litigation, public
policy advocacy, or attempts to influence legislation that are more stringent than the

requirements established in connection with tax-exempt status under Sections 501(c)(3) and

‘The complete text of the District Court's opinion in Planned Parenthood
of Metropolitan Washington, D.C. v. Horner, 694 F.Supp. 970 (D.D.C. 1986)
is set forth at the Appendix, Exhibit 30.

* Fiscal Year 1988 Continuing Appropriations Act, § 618(a), Pub.L. 100-
202, § 618(a), 101 Stat. 1329-423.


1995
Embrace-A-Stream
Winners

Project Descriptions Compiled
by Christine Arena and Kate Costenbader

Contributions from TU members, corporations, and foundations fund
‘Embrace-A- Stream (EAS), which annually awards grants to TU-led stream restoration, research, and education
projects. In 1995, Embrace-A-Stream will award 26 grants totaling $121,727 for projects located in 25 states.
Five projects will be eligible for $15,000 in matching funds through the following fisheries programs sponsored
by the National Fish and Wildlife Foundation: Bring Back the Natives, Fisheries Across America, and Ecosys-

tem Restoration. Winning projects are listed alphabetically by state.

Old Pueblo Chapter (AZ) — Continuing an effort
that began in 1992 to restore threatened native Apache
trout in Arizona's West Fork of the Black River, the
Old Pueblo Chapter will use $10,000 to a pri-
mary fish barrier on the West. Fork, construct 30
instream habitat improvement structures and put up ri-
parian fencing. This EAS/Bring Back the Natives
Project takes a comprehensive watershed approach in
‘restoring a blue ribbon fishery in cooperation with the.
US. Forest Service, Arizona Department of Fish and
Game, the U.S. Fish and Wildlife Service, and the Na-
tional Fish and Wildlife Foundation.

Arkansas Chapter/Arkansas Council— $5,000
‘grant will help the Arkansas Chapter and Council in its
‘ongoing efforts to restore the Beaver tailwater, which
comprises the middle section of the White River, to a
quality coldwater fishery. ‘The Beaver tailwater fish-
ery has the potential to sustain increased populations
of rainbow, brown and cutthroat trout. By eliminating
bank erosion, re-channelizing the river to its original
configuration, restoring holding pools and riffle wa-
ters, and providing cover for trout habitat, TUers will
return the river ta its previous condition before a flood
nearly destroyed the fishery five years ago.

Gunnison Gorge Anglers Chapter (CO) — To re-
store and enhance native riparian vegetation to the
shoreline area of Rowdy Reservoir, located in the
‘Cimarron River drainage, the Gunnison Gorge Anglers
Chapter will use a $500 EAS grant to construct a fence
of lodgepole pine to enclose 10 acres surrounding

Rowdy Reservoir. Willow cuttings and seeding with
native riparian and wetland vegetation will stabilize the
shoreline, provide shade to the rainbow trout inhabit-
ing the lake, and reduce erosion and nutrient loading
impacts resulting from current grazing practices.

Georgia Foothills Chapter (GA) — An EAS grant
‘of $600 will suppor the Georgia Foothills Chapter’s
efforts to construct an outdoor learning center along
the Soque River. The construction of a 0.6 mile loop
trail, creating an “outdoor classroom.” is one aspect of
three-part approach to outdoor education. The facil-
yy wall promote hands-on leaming of ecosystem man-
‘agement principles, The EAS funds will enable Geor-
gia Foothills to acquire aquariums to educate the pub-
lic about healthy watersheds and fish populations.

South Carolina and Georgia Councils (GA) —A
‘$10,000 BAS research grant will support the South
Carolina and Georgia Councils in their investigation
of critical habitats on the Chattooga River, a regionally
important tcout stream in the Southern Appalachians
In a partnership with the U.S. Forest Service, the TU
councils will use visual implant tags and electronic
transmitters to monitor fish movement and will com-
pile and analyze the data using state-of-the-art com-
puter technology. The data will provide fisheries man-
agers with information regarding seasonal movements
and spawning habitats of the Chattooga’s brown trout
In recognition of the Chattooga’s recreational and bio-
logical importance. Duke Power Company has recently
awarded funding support to the investigation,


178

lunities and foundations who fear their efforts will be misunderstood and mislabeled,

Finally, and most importantly, federal workers have demonsirated their
approval of an open Combined Federal Campaign and they should not be deprived of
the ability to give to the charity of their chnice, Indeed, at the hearing on the CFC
representatives from the Office of Personnel Management teslilied that per capita
contributions have gonc up over the years since the CFC was apened to include groups
that advocate. OPM receives few, if any, complaints about the CEC,

Clearly, the open campaign, providing employees with real choice in charitable
giving, hns been a success. Rather than increasing burcaucracy and government
control of the CEC, Congress should take steps to encourage voluntary giving. Placing
additional restrictions on participation in the Combined Federal Campaign will not
further this goal.


14

Mrs. MorELLa. I would like to now turn to Charles Stephen Ral-
ston, representing the NAACP Legal Defense and Educational
Fund, and simply suggest, as you all know, that your total testi-
mony will be included in the record and, of course, any synopses
you could offer would be appreciated. Thank you.

Mr. RALSTON. Thank you. I would like to thank the committee
for inviting the Legal Defense Fund to present its views. I would
also like to say, in the immortal words of the immortal Yogi Berra,
it seems like deja vu all over again.

The Legal Defense Fund has been involved in the whole Com-
bined Federal Campaign matter since 1980, and in my prepared
statement I have outlined our attempts to get in, the litigation we
brought that got us in, how we almost got kicked out, and then,
finally, how we got in for good. We have been in for 15 years.

In reading the letters and the materials that have now been pub-
lished or issued on this issue, I have not seen anything that we
didn’t hear 15 years ago throughout the period when attempts were
made to exclude us and other organizations. It is simply nothing
new under the sun. And I, for one, would hate to see this all re-
opened and we go back to the contentiousness and litigation that
we went through in the 1980’s, which was finally resolved when
Congress took hold of the matter and ensured that the Combined
Federal Campaign would be an open campaign to which a variety
of organizations can belong and so that Federal employees are
given a free choice to give their money to whomever they felt was
worthy of it.

There’s been talk about “truly charitable” and “real charities”
and “bona fide charities,” and that somehow, organizations that are
called “advocacy groups” aren’t any of those things. Well, we are.
I've given examples in our statement, which I won’t repeat, of ex-
actly what we do, the NAACP Legal Defense Fund. I’m using us
as an example not to the exclusion of other organizations, but be-
cause I know what we do and I wanted to give the committee the
facts about what we do and the kind of benefits we provide in the
areas of human welfare, health, education, income maintenance,
and a variety of other ways to people in need.

In the 15 years that we’ve been in the Combined Federal Cam-
paign—and this is leaving aside the 40 years of our history before
we got into the Combined Federal Campaign—our work has bene-
fited poor and needy people to the tune of something over half a
billion dollars, and this is on a budget over that same time period
which is around $100 million for the 15 years.

In other words, the kind of work we do provides benefits far in
excess of our budget, and this work has been helped immeasurably
by our participation in the Combined Federal Campaign.

Over the same time period, we have received approximately $7.5
million in donations by Federal employees who look at our program
and decide that we deserve their support. I say we do and I believe
that any organization which is eligible and gets in and gets the
support from Federal employees deserves that support because it
is, after all, their money.

I would like to just say something about some of the questions
that have come up so far during the hearing because I think there
is some misunderstanding on a couple of issues. One is the notion


32

through there, reading, seeing what various organizations can do.
Because some of the names are very misleading and some of them
are doing very good work in the health and human welfare arena.
So the answer is yes.

Mrs. MoRELLA. I just think it would stand to reason that they
would reduce the kind of contribution they give if their particular
charity or educational institution—health and human services in-
stitution isn’t on there.

But I also wanted to emphasize that it ain’t easy to become one
of those beneficiaries. You have to work very hard to point out your
qualifications.

Ms. GREEN. That’s correct.

Mrs. MorELLA. Thanks. Thanks, Mr. Chairman.

Mr. Mica. I thank the gentlelady.

And now I would like to yield to the ranking member of our sub-
committee—he has just joined us—for either an opening statement
or questions or any combination of the above.

Welcome, Mr. Moran, our ranking member.

Mr. MorAN. Well, thank you very much, Mr. Chairman.

We had a little press conference on a piece of legislation that I
hope all of my colleagues are going to sign on to with regard to vio-
lence, sex, and vulgarity on television screens. And I know that
this is something you are opposed to and sounds like——

Mr. Mica. I’m glad that had nothing to do with this hearing.

Mr. Moran. Not at all. Nor anything to do with your own private
lives. But I just wanted to alert you so that there will be no ques-
tion that you knew about it.

Mrs. MORELLA. I thought you said vulgarity in Bulgaria.

Mr. Moran. No. That’s international relations.

Anyway, I apologize for not being here earlier. This is an issue
that, while it is not necessarily a national issue, it certainly is im-
portant for Federal employees. And I do think it is terribly impor-
tant that Federal employees have the means to contribute as they
do in significant amounts to voluntary charitable efforts.

I have been associated with the United Way for a long time, and
so I have watched this issue and been interested in it for a good
deal of my time down here in Washington, particularly.

You know, I was kind of shocked at a couple of things.

One was Mr. Armey’s letter, the Majority Leader, who appar-
ently wrote to corporations on what appeared to be official station-
ery about his desire to defund the left and tied it in to this CFC
thing and how he is upset about the nonconservative and non-Rush
Limbaugh type of organizations. For the life of me, I couldn’t see
the connection here until I noticed the Sierra Club is on this. Is
this something that disturbs Rush? Maybe that’s what it is all
about.

But I was a little taken aback about the letter that was reported
in Roll Call, and I think it was in the Post and other places. It
caused some of us to look at the list of organizations that are on
this list. I didn’t see the SDS or any of the groups that used to be
considered threatening groups, but I saw for the most part pretty
mainline organizations, although there are some that were ex-
pected.


1038

TESTIMONY
oF
JEREMIAH J. BARRETT

I was the Director of the Office of Combined Federal Campaign (CFC)
Operations from August 1988 through December 1991. Previously, I
was the Special Assistant to the General Counsel for CFC. In these
positions, I was the agency expert on the CFC and had direct
responsibility for the development and implementation of CFC policy
and the oversight and evaluation of its operation.

I developed and issued the CFC regulations in response to the CFC
legislation. As the Congress had directed, these regulations

opened the campaign to a larger number and wider variety of
charities.

This increase in numbers and types of charitable organizations
raised concerns within the Federal population. Many donors
objected to both the increase in organizations and the objectives
of some of them. Many employees felt that some of these
organizations, did not in their point of view, provide direct human
health and welfare services to individuals. Many felt that the
inclusion of specific voluntary agencies was objectionable because
of the groups goals and objectives. There were enough objections
by Federal employees that in speeches, training sessions, and in
correspondence, I tried to address these concerns by emphasizing
that an employee’s designation insured that his gift would go to
the specified charity. In fact, the Department of Defense was so
concerned about this issue that when I was going to Asia on behalf

of the campaign they asked me to address this issue with the
military.

This change in the CFC had an impact on campaign operations and, I
would imagine, still does today. But, that impact has not been

only negative because donors now in overwhelming numbers designate
their gifts.

Next, I would like to address the purpose of these hearings. can
the CFC be returned to its original purpose to remove ideological
advocacy groups and other organizations that do not provide or
support human health and welfare services?

Based on my experience with the CFC, I doubt it.

The charitable organization that you support as providing human
health and welfare services; I see as an advocacy group whose
objectives and goals I find repugnant. Planned Parenthood World
Population has participated in the CFC for three décades; the
National Rifle Association almost two decades; and National Right
to Life for over a decade.

In addition, Directors of the Office of Personnel Management and
local campaign officials have through their eligibility decisions
re-defined human health and welfai An amazing variety of



39

main in the campaign, and many will object to their work. There
are STOPS that essentially everyone Supports such as Mothers
Against nk Driving that probably will be eliminated.

‘Now, two reasons have been put forward for eliminating so-called
advocacy groups—one, that the Federal Government subsidizes the
CFC; and, two, that the Federal Government should not be subsi-
dizing advocacy organizations.

First, I think, as I’ve indicated, it’s very difficult to determine
what is and is not advocacy. If a disease organization, say, involved
in cancer promotes a certain lifestyle as a means of prevention, is
that forbidden advocacy or advocacy that should be restricted?

Our promotion of childbirth and adoption is advocacy to some. To
others, it is the most important prenatal health service that could
be provided to the child. So advocacy may largely be in the eye of
the beholder.

All charities in the CFC are limited by IRS regulations strictly
in the amount of lobbying they may undertake, and we believe this
is a much more proper and precisely defined restriction than the
much more ambiguous concept of advocacy. And, of course, all
501(c)(3)’s are forbidden any partisan political activity.

Second, charities in the CFC are not subsidized in the way one
normally thinks of a subsidy. The moneys we receive are directly
given by the donors. It is their own funds. The subsidy primarily
amounts to the time Federal employees spend conducting the cam-
paign, attending kickoff sessions, et cetera, and we don’t believe
that’s going to be reduced at all ‘by reducing the number of char-
ities. Even if the number is reduced in half, the same amount of
taxpayer dollars will be spent.

But we believe the proposed changes, ironically, will increase
taxpayer costs because there will be more costs involved on an on-
going basis, and more time spent in determining who is eligible
and who is not, on determining whether or not an organization has
engaged in an improper amount of advocacy and in dealing with
the inevitably large number of appeals from threatened charities.

Currently, there is great emphasis within the public and within
Congress on reducing the costs and size of government and reduc-
ing the degree of government interference in the economic lives of
individuals. In that context, it seems to be going in the wrong di-
rection to increase the cost to the CFC, increase the regulations in-
volved in the CFC, primarily for the purpose of restricting how the
Federal employees can give their own money and to what charities
and for what purpose.

We believe the Combined Federal Campaign is currently func-
tioning very well, and we respectfully request that you reject this
Proposed change.

Mica. We thank you for your testimon: ny

{The prepared statement of Mr. O’Steen follows:]


164

the federal government is assisting the raising of additional
monies toward charitable activities that by law must enhance the
health and welfare of our nation. In effect, the government is
spending a small amount of money to generate a significant amount
of money ($195 million annually) that will improve the health and
welfare of our nation and its residents, Thus, the CFC is an
extremely efficient way of providing funding for charitable
services that arguably would otherwise fall -- complete with
burden and costs -- upon the federal government.

Currently, the government’s costs in running the campaign
are spread equally among the broad spectrum of charitable human
health and welfare activities represented by the participant
charities. Thus, the government is equitably encouraging
charitable contributions as an activity. It is not endorsing or
promoting any particular type of charity. However, if the
campaign is restricted to charities that engage only in certain
activities, the campaign becomes a funnel for taxpayer money to
that particular subset of charitable activity to the exclusion of
others. That is precisely the kind of biased politically-
manipulable situation that the current system is intended to, and
does, prevent.

Further, the total costs of the CFC do not decrease even if
the number of participating charities is reduced. The Director
of OPM testified that the "cost of the campaign does not
significantly differ if we include a hundred charities or a
thousand."’ Thus, any government subsidy of the campaign «
remains essentially the same whether advocacy groups are included
or not.

The direct cash outlay by the federal government is
incredibly small for raising such a large amount of
contributions. OPM estimates direct costs for 1994 at a total of
$731,300 This is less than one half of one percent of the
$195 million raised that year. OPM’s direct costs include OPM
staff salaries, audits, and compliance reviews. Other costs
associated with printing campaign materials, the local management
of the campaign, and contribution processing are paid by the
participating charities.

Although campaign costs to the federal government are
currently low, costs could actually increase if groups were
excluded from the campaign. Implementing and enforcing new
eligibility limits based on a subjective, arbitrary definition of
what constitutes a worthy charity would probably result in higher

7 Statement of Honorable Lorraine Green, p.4, supra, note 4.

"aa.


Page Five

Other charities carry out similar advocacy and lobbying
functions regarding child abuse, domestic violence, veterana
issues, or regarding medical research, for example. Sometimes
these groups also carry out litigation as a means of seeking to
correct a wrong or to let our judicial system determine an issu
Just as every citizen, corporation, or the government itself has
this right, 90 do charities.

Advocacy activities are part of the tradition of our fre
society. Advocacy and free speech are the cornerstones of our
democratic ideal, making the United States unique among the
nations of the world, The charities in the CFC today are no more
or legs controversial that other institutions of our society.
They are merely a reflection of the healthy, vibrant free speech
values that make our country strong.

I do not believe that the CFC should exclude groups on the
basis of Limited lobbying activities which already conform to IRS
requirements. I do not think that a separate, duplicate system,
creating more bureaucracy and cost, is needed in the CFC.

I believe that the central purpose of workplace giving
campaigns nationwide, including the CFC, is to demonatrate the
unique Aner‘can commitment to caring and sharing. This commitment
recognizes that every Anerican institution, public or private, can
Play a significant role in, and receive compensating benefits
from, workplace campaigns that expreas their support for charity
activity, the diverse needs of our society, and the highly varied
interests of employee:

Campaign leaders should not seek to control or arbitrarily
limit the charity choices of employees, but simply provide a forum
for employees to make a free choice to give or not to give.

I hope that the committee will not take a step backwards and
send the wrong signal to America. Today, the CFC represents a
commitment to caring, a respect for diverse charity programs, a
trust that employees can and should make their own giving
decisions, and a free market of choice.

Based on the successful record of the CFC, employees’
demonstration of their preference for wide and diverse choice, and
the alternative consequence of increasing the bureaucracy and cost



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148

ticipation, and also, as you point out from looking at the exact fig-
ures of the chart that was presented, that also the amount of giv-
ing is decreasing although the number of charities participating
and other groups is increasing.

It looks like about a third of a million dropped off the radar
screen in the early 1980’s, and then the only time we saw an in-
crease was from about from 1983, I guess, in 1984 we saw an in-
crease, 1985 we saw an increase, 1986 we saw an increase, and
then it started declining and I guess that reflects some of the pe-
riod of change that was implemented by Mr. Devine; is that cor-
rect?

Mr. Morris. That is correct, Mr. Chairman.

The other side of the coin is also important. I think the other
thing that is worth examining and getting to the bottom of is what
the trend line is in costs.

I think if nothing else, your inquiries will do us all a big favor
if we can get a handle on what are the actual trend lines in terms
of giving participation and giving rates and what are the actual
trend lines in terms of costs. That Jatter point is not unimportant.

First of all, we have to get the definition straight on costs. Not
only are we dealing with the direct costs as OPM defined them this
morning, not only are we dealing with the indirect costs that OPM
owned up to this morning, but I think there are some other indirect
costs that weren’t taken into account apart from what OPM dis-
cussed today including the fringe benefits.

Mr. Mica. What are some of those?

Mr. Morris. For example, time involved by nonOPM personnel
in organizing local CFC’s, the time involved not just on the part of
key workers but also on the part of the Local Federal Coordinating
Committees, the LFCCs. The time that is consumed in campaign-
related events, kick-off meetings, mandatory programs held in
auditoriums where people go and watch a movie for an hour on
what charities do.

By the way, those events—talk about creating first amendment
problems, when a government agency takes its work force into an
auditorium and shows it a movie in support of the CFC that maybe
only highlights 1 or 3 or 5 to 10 charitable agencies, would that not
only perhaps have a tendency to skew giving but it sends direct
speech into the ears of Federal employees that benefits some and

_ excludes others?

So at every turn the way the campaign is currently operated
under these circumstances, first amendment questions are raised
and costs are imposed. Once we reach an agreement on what the
costs are and get to the bottom of what they are, the trend lines
in costs I think will be interesting.

From the data that OPM gave us this spring in my statement.
those are set out in footnote 4 on page 3—OPM was saying the
costs in 1991 were $13.6 million. Now they told us in the 1994
fampaign it was $22.1 million. That is a pretty dramatic trend line
by OPM’s own numbers.

The fascinating thing is we are now at a point, in fact we got at
a point a year or two ago, where the costs that OPM owns up to
are greater than the undesignated gifts that are made during the
campaign. The trend lines are moving toward intersection.


35

Statement of Representative James P. Moran
on "Lawyers & Lobbyists v. People in Need*
Bearing before the Subcommittees on Civil Service
dune 7, 1995

Mr. Chairman:

I appreciate your having this hearing today. I must admit
that I was concerned when I read in the National Journal of an
fort to "defund the left" that was allegedly being carried out
by the Majority Leader office. I am pleased that this hearing
will focus on the pros and cons of the current program rather
than on an ideological effort to silence organizations in which
we may not believe. ~”

Bach year, when I flip through the CFC participating” .
charities list, I see organisations that make me wonder dn
the world they got on tha list and who would contribute to them,
I imagine most federal employees feel the eame way when they look
over the list and the organizations on the " " list vary
from employee to employee. And I imagine that every year
thousands of employees in the federal goverament, indeed hundreds
of thousands of employees, make the same decision I do. They
choose not to contribute to the organizations in which they do
not eve.

Some give to the NAACP Legal Defense Pund.
their choice, It is ironic, that at a time when the Congr
a@ whole is pushing for freer markets and less government
regulation, some are trying to restrict a federal employee's
freedom of choice and regulate the charities to which they can
contribute.

The current regulations governing participation in the
Combined Federal opal are more than effective. ‘They allow
only bona fide 501(c) (3) charities to participate. They require
that the charities spend less than 25% of their income on
Administrative costs. And they require that the charities
provide human health and welfare services, benefits, assistance,
or program activities.

It has been said that some of the charities in the CFC are
counter to the philosophy of some texpeyere. and, therefore,
should not be included imthe CFC. 6 argument is based on the



67

Mrs. MorELLA. And we will now hear from Capt. James
Hollenbach, president of the Christian Service Organizations of
America.

Captain HOLLENBACH. Thank you, ma’am.

I would like to take advantage of the committee’s kind offer and
submit my written statement for the record. And I have three
major points I’d like to make.

Before I begin I'd like to make it clear that I am testifying not
in any official capacity but rather as an individual service member
who’s been very much involved with the CFC throughout my 25-
year career. That involvement has had four facets:

One is as a donor.

The second is as a manager of CFC operations inside the individ-
ual commands in which I have served.

The third is as a recipient of the benefits of CFC-funded char-
ities.

And the fourth is as an unpaid volunteer involved in the govern-
ance of two Combined Federal Campaign federations—first, as a di-
rector of Independent Charities of America, and now as president
of CSOA, as you indicated.

The first point I would like to make is in regard to costs. I’m
afraid that we’re only looking at part of the equation. And the part
we're looking at has some misinformation associated with it.

From my standpoint as division officer or department head or
commanding officer of a military unit involved in a CFC, I saw
very little negative impact on my workforce for its involvement.
The time demands are not high. The functions are in addition to,
not in place of normally assigned duties. It’s an opportunity for in-
dividuals to be able to come together for a common cause.

And that brings me to the benefits side of this, and that’s the
piece that I think we’ve missed. As a squadron commanding officer,
1 looked forward to the Combined Federal Campaign. It gave me
a chance to give a senior enlisted man or a junior officer an oppor-
tunity to show his leadership, to put together a creative, perhaps
innovative, campaign and coordinate an effort across the squadron
to bring people together.

It provided a sense of unity for the squadron. We were working
as a team to achieve good. We were able to draw together and com-
pete with other units in trying to do the most good. This had a
positive impact on morale in the squadron. We reinforced the moral
obligation of each individual military member to serve his neighbor
and out of that came a more effective organization. I think we’ve
reaped more benefit from our participation in the Combined Fed-
eral Campaign than any price we paid.

The second point I'd like to discuss is the matter of the slippery
slope of defining advocacy. I chose to get involved in a governance
of Combined Federal Campaign federations for two reasons.

The first one was to be able to look those sailors in the eye and
assure them that their dollars were being well spent, that in fact
those were legitimate enterprises that they were contributing to
and they were accomplishing the purpose for which they intended
their contributions.

But the second one was to try to do the greatest amount of good.
And I have strongly felt opinions, just like I’m sure every member


Idaho Panhandle Chapter (ID) — Using a $5,000
EAS grant, the Idaho Panhandle Chapter will work with
the U.S. Forest Service to restore critical habitat for
bull char and westslope cutthroat trout, both federally
listed as sensitive species, on the Grouse Creek in north-
em Idaho. Idaho Panhandle TUers will place wood in
‘stream beds and banks in order to restore Grouse Creek
to its original configuration. The project will teach lo-
cal students in riparian and stream rehabilitation tech-
niques.

Minois Council— To address the use of gill nets in
the Great Lakes, the Illinois Council will use $4,000 of
EAS funding for publications for a symposium on this
topic, scheduled for December 4-5, 1995. Gill nets are
the primary traditional tool of Great Lakes commercial
fishermen. Trout Unlimited, Great Lakes United, the
‘American Fisheries Society and the Assembly of First
‘Nations, as well as several other organizations and gov-
‘ernment agency groups. will sponsor the symposium,
which will provide information and recommendations
on gill net use and guide policymakers in analyzing the
future use of gill nets and their impacts on the conser-
vation and management of the Great Lakes’ diverse
coldwater resources, including native lake trout and
native coaster brook trout,

Mlinois Council— tn an effort to restore declining
‘populations of native “coaster” brook trout in Lake Su-
perior, TU's Ilinois Council will participate in a ge-
netic characterization study. The U.S. Fish and Wild-
life Service’s Fishery Resources Office, based in
Ashland, Wisconsin, will coordinate the study as part
of its overall plans to develop a lake-wide restoration
plan for coasters.

‘An EAS research grant of $7,000 will help attain
the genetic information necessary to making informed
decisions about protecting extant remnant populations
of coasters and rebuilding populations. Using exten-
sive DNA analysis, the study will identify individual
‘coaster populations and determine the range of genetic
variability within and among them.

The Ilinois Council anticipates that the study will
bbe an important step toward identifying specific op-
portunities for Trout Unlimited volunteers to become
involved in on-the-ground restoration and public edu-
cation activities to conserve, protect, and restore this
important native fish.

Maine Council— Through educational programs,
bank stabilization, run-off diversion, and pasture fenc-
ing, the Maine Council hopes to develop and increase
community involvement and awareness of water qual-
ity and fisheries issues on the Sheepscot River, which
is one of seven rivers in the United States that boasts a
native, sea-run Atlantic salmon population. Part ofthis
‘community process has been to secure the support of
focal landowners.

‘The U.S, Fish and Wildlife Service, the Natural Re-
sources Conservation Service, the Maine Department
of Inland Fisheries and Wildlife, and the Maine De-
partment of Marine Resources, along with the $2,100
EAS grant, will assist the Maine Council in stabilizing
riparian zones and developing educational activities
with local schools.

Hacklebarney Chapter (NJ)— The Hacklebamey
‘Chapter will use its $2,500 EAS grant to restore a one-
‘quarter mile stretch of the Rockaway River. Restonng
native trees and plants to the riparian zone will reduce
sediment loads in the Rockaway and provide shade and
shelter for trout populations. Members of the
Hacklebamey Chapter will aso install stone deflectors
and other instream structures to improve trout habitat

Adirondack Chapter (NY)— Working with the New
‘York State Department of Environmental Conservation
and the U.S. Forest Service, the Adirondack Chapter
will put $2,172 in EAS funds towards bank stabiliza-
tion and fisheries enhancement on the Mettawee River,
‘which supports a high-quality rainbow and brown trout
fishery.

‘The Adirondack Chapter will plant more than a hun-
dred feet of vegetation to secure eroding streambank
along the Mettawee. The TU-led restoration effort
along the Mettawee was profiled last year in the "Habi-
tat Watch” segment of the On The Fly fly-fishing show.

Northwestern North Carolina Chapter (NC) —
‘The Northwestern North Carolina Chapter, along with
three TU state councils and 13 TU chapters, will use a
$10,000 EAS grant to improve and enhance habitat on
the South Holston River in Tennessee.

Given its limestone structure and productivity, the
‘South Holston is a unique ecological and recreational
resource in the '

In cooperation with the Tennessee Valley Author-


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104

organizations providing numerous and varied services have been
found eligible. The introduction of these different voluntary
agencies has caused the campaign to grow but based on receipts has
not caused an adverse effect on the CFC.

For example, there is an organization that provides services in a
only in limited number of western states but it sends applications
throughout the country. When one of my staff members contacted
them, an official with the group said that they paper the country
with applications to most of the campaigns on the assumption that
they will be accepted, even though they provide no services in each
campaign area.

The CFC regulations and the IRS regulations allow ineligible
organizations to create fronts that are eligible for charitable
donations which in turn they funnel to the parent group. this
happened a few years ago.

A national organization lost it IRS 501(c)(3) status because it had
participated in a partisan campaign. There were two years of funds
designated to the group to still be distributed. The U.S, Treasury
advised OPM to arrange for the funds to be distributed to a charity
that was providing similar services. The ineligible group formed
a legal defense and education fund to receive the outstanding funds
and these were then given to the parent group. This new group
participates in the CFC today.

As you requested, I would like to share my view of what is the
central purpose of the CFC. The CFC is the vehicle that gives
Federal employees the opportunity to make donations to charitable
organizations of the their choice. It is not to keep a specific
charity alive or to have the Government decide what are appropriate
organizations for employees to give their gifts. This leads me to
the conclusion that the CFC as presently established should be
abolished.

First, the CFC is very costly. A few years ago we calculated what
the cost to the government was to operate the CFC. We made certain
assumptions and came up with a figure of $50 million to raise $200
million. We would bar a charity that had this high a percent of
its funds being charged to administrative and fund raising
expenses.

Second, the CFC is a very small and insignificant part of any
charities’ support. As a nation Americans are incredibly generous
in their charitable giving. The $200 million that is raised in the
gre is not even 1% of the total charitable dollars raised annually
n the U.S.A.

Third, the Director of OPM and the local Federal officials are very
limited in the amount of information that they receive from
applicants with which to make their eligibility decisions. this

permits many questionable and possibly fraudulent organizations to
enter the CFC.



167

1970+1995

AMAZON RIVER!

June 13, 1995

Representative John L. Mica
Subcommittee on Civil service
Room B-371-C

Rayburn House Office Building
Washington, Dc 20515

Dear Rep. Mica:

This is to express my appreciation, once again, for the
work your committee is doing to differentiate true charitable
work from lobbying and advocacy.

I approve advocacy, and I approve active political
involvement. This is the American way. I do think, however,
with the emphasis in the non-profit sector in recent years on
advocacy, we have turned the Federal Combined Campaign into
something other than was intended.

I believe that your proposition, to return the workplace
charity drive at the federal government level back to th
cause of true charitable enterprise, and away from lobbying
and political influence, would be a positive step.

lementation, of course, will be a great challenge. 1
can see a pure advocacy organization rolling a small cot into
their office to put up an occasional hungry client. This
makes then a “nixed” organization. Perhaps you have already
thought of some way to handle that problem.

1011 WEST EARLL DRIVE PHOENIX, ARIZONA 85015-6005 TELEPHONE (602)252-7772 FAK (602) 40-197


126

“15
Combined Fund Organization to execute the campaign in the local area.’ Designated
contributions were to be allowed and encouraged, but any gifts not designated to specific
individual charities or federated charitable groups were to be deemed designated to the Principal
Combined Fund Organization” (which in most, but decidedly not all, CFC areas turned out
to be the local United Way affiliate)

The hole punched in the CFC’s wall in January 1981 by the LDF and the Puerto Rican
‘Legal Defense and Education Fund, Inc., became in 1982 and 1983 an open doorway, and
through it poured not only the legal advocacy groups already mentioned but numerous other
organizations, all participating or applying for berths in the national and local CFC, including:

ACLU Bill of Rights Fund Campaign
AFL-CIO Department of Community Services

Animal Welfare Institute

Center for Law in the Public Interest

Citizens for God and Country

Environmental Defense Fund

Federation of Fly Fishers

Foundation for Handgun Education

Freedom Church of Revelation

Guardian Angels

Intemational Association of Machinists, AFL-CIO
Museum Consultants International

National Association for the Advancement of White People
National Conservative Fund

National Education Association

PUSH Foundation

Religion in American Life

Sierra Club Legal Defense Fund

As the LDF got its wish, a firestorm of controversy erupted across the nation. J have included

“5 CER § 950.509 (1982).
5 CER § 950,509(g) (1982).


45

ments. It is an honor to serve, but Federal missions must be ac-
complished.

As donors are provided with more choice, more are likely to give,
and those who give are likely to give more. I never heard an em-
ployee complain that there are too many choices.

Each of the Independent Charities of America member federa-
tions annually surveys Combined Federal Campaign donors. Free-
dom of choice is cited consistently as a reason for giving.

Mr. Chairman, I received last night the results of an independent
poll of 800 Federal employees conducted by the firm of Fabrizio,
McLaughlin, and Associates. I would like to submit the entire poll
and results for the record, but I would like to briefly give you the
findings.

(The information referred to follows:]


87

And the other is, and it was pointed out by Dr. O’Steen, the issue
of free speech. That’s the other side of it. Do we limit the Federal
employees their rights, or infringe upon their rights to give to orga-
nizations that I don’t agree with—many of the philosophies? I’m
not an ethicist, not a philosopher. I’m just somebody from south-
western Pennsylvania who has some common sense.

I think—I'm offended and every Federal employee should be of-
fended by this government infringing upon their rights. And the
more I sit here, the more disturbed I get. I think all Federal em-
ployees have a right to designate to whom they wish their money
to go to. I think we’re setting a poor—a poor example for the pri-
vate sector.

And I participated in every fund-raising event you can think of
over the past 40 or 50 years. Corporate America gives big time in
the way of their employees contributing and working in fundrais-
ing, and I think now they can point to this government and say
that this government doesn’t want to participate and fund directly,
or indirectly, in raising money to help those who are less fortunate.

I feel that we should, as Ronald Reagan said—if I might go back
to Ronald Reagan, who said that people should look less and less
to government and more and more to volunteerism and all of us
should be more charitable and look less to Government. And now
here we have the government saying we want to interfere, and
maybe you will get less.

I think you are right, Captain. I think if we send a message that
this government doesn’t want to participate as it is currently that
somehow the private sector will get the message. “If the govern-
ment doesn’t want to participate, why should we participate?” I
think we are setting a serious course, the wrong course in the
wrong direction as it relates to giving, and I think this government
should serve as a model.

If it is that those who do not agree with those charities that are
getting that money, then that reeks of something even more seri-
ous. If you want to shut off debate—and I’ve seen that around the
world, and I’ve seen it in history, and that concerns me, that some-
how if we don’t agree with the people who are getting the money
then we should shut them out. that concerns me, and I don't
think we want that reputation either.

So I say to you work very hard to try to maintain—I’m not going
to say the status quo because everything can be fixed or done in
a more efficient manner. And I don’t know about perhaps charging
the charities some kind of a fee because then, again, the private
sector says, “what do we get? How are we reimbursed?”

So I have some deep concerns and I certainly want to participate
in the future in the debate as the debate goes on, but I hope that
we do not shut off free speech by those people who want to be gen-
erous with groups that I agree or disagree with.

Thank you very much, Mr. Chairman.

Mr. Mica. If any of the panelists wanted to respond to Mr. Mas-
cara’s comments?

Well, I again thank the gentleman from Pennsylvania.

As we conclude this panel I have a couple of questions. Does any-
one have an objection to a rule or a law that requires that we pub-
lish the amounts of money that each of these groups are receiving?


8

ever, to make its estimate of $55 million or $60 million based on
very questionable assumptions.

fe have, since receiving your inquiries, taken a close look at the
indirect costs of the CFC campaign. We could not examine all 435
campaigns, but we polled the top 40 campaigns, those that raised
$1 million or more, to achieve as accurate an estimate as we could
of the indirect costs of donated time. We asked their financial offi-
cers to provide data on the number of key workers they used, their
hours worked and their average hourly pay, as well as the number
of LFCC members and their total hours and average hourly pay.

On the basis of their responses, the average grade of a key work-
er is GS-7 and the average ratio of key workers to potential donors
is 1 to 30, which you will note is three times the 1988 assumption.

Assuming that each key worker dedicates 8 hours to the CFC, we
estimate the contribution of key workers, both military and civil-
ian, at about $12.3 million. This assumes 136,937 key workers, at
an average daily rate of $90.28, who contact about 4.1 million of
their fellow employees, civilian and military.

Again summarizing, combining all of the figures, our estimate of
the total cost of the salaries for the 1984 CFC on a national basis
comes to $17.7 million. If we add to that a 25 percent multiplier
for benefits, the total reaches about $22.1 million.

I note again that the vast majority of that is in indirect, noncash-
outlay costs. The $22.1 million is about 11 percent of the $195 mil-
lion raised that year.

I have no doubt that our figures are more reliable than the 1988
estimate. The 1988 estimate was based on assumptions that are
clearly faulty. Our estimate, which I have outlined in detail in my
written remarks, is based on a good-faith effort to arrive at realis-
tic figures.

However, even our $22.1 million figure overestimates the indirect
costs because, as I’ve stated earlier, we believe that every dollar
spent on the CFC campaign is not an hour lost to the government.

Your fourth question was how much money the CFC raised in
1994 and how long the campaign lasted.

Mr. Chairman the 1994 campaign lasted 6 weeks, although local
officials can extend that period, and, as indicated earlier, raised
about $195 million in donations from more than 1.8 million contrib-
utors.

Fifth, you asked if it is proper for the taxpayers to subsidize the
CFC, particularly when many of its donees may be considered con-
troversial.

Mr. Chairman, Americans believe in volunteerism, and there ex-
ists in the private sector a well-known tradition of giving at the
workplace. I believe it is entirely proper for Federal workers to
make this outstanding effort that over the years has raised literally
billions of dollars for worthy causes.

I agree that there are individuals up and down the political spec-
trum who may find certain organizations not to their liking, but I
believe most CFC participants think theirs is a broad and balanced
list that includes literally hundreds of charities they consider wor-
thy of support.

I might note that little controversy has surrounded the campaign
in recent years in contrast to the 1980’s when there were many


COMBINED FEDERAL CAMPAIGN: LAWYERS
AND LOBBYISTS VS. PEOPLE IN NEED?

WEDNESDAY, JUNE 7, 1995

HOUSE OF REPRESENTATIVES,
SUBCOMMITTEE ON CIVIL SERVICE,
COMMITTEE ON GOVERNMENT REFORM AND OVERSIGHT,
Washington, DC.

The subcommittee met, pursuant to notice, at 9:34 a.m., in room
2154, Rayburn House Office Building, Hon. John L. Mica (chair-
man of the subcommittee) presiding.

Present: Representatives Mica, Morella, Clinger, Moran, and
Mascara.

Staff present: George Nesterczuk, staff director; Garry Ewing,
counsel; Caroline Fiel, clerk; and Cedric Hendricks and Miles Q.
Romney, minority professional staff.

Mr. Mica. Good morning. I want to welcome you to this heari
of the Civil Service Subcommittee, of the Government Reform an
Oversight Committee.

This morning I wanted to make a few opening comments, and
then we will have comments from my colleagues on the panel. We
have a rather lengthy hearing schedule, so we will move right
ahead.

First of all, ladies and gentlemen, in today’s hearing we will ex-
amine the activities of the Combined Federal Campaign, also
known as the CFC. The CFC is a taxpayer-supported annual fund-
raising drive conducted by Federal employees in the Federal work-
place.

The issue before us today is, should the Combined Federal Cam-
paign be returned to its original role of being a legitimate charity
are or continue as another mushrooming taxpayer-financed grab

ag?
Few taxpayers, I suspect, would object to having their tax dollars
used to encourage contributions to organizations that assist people
in a charitable fashion. And I’m certain that if the average tax-
payer is told that his or her money will be used to support a char-
ity drive, he or she would immediately form a mental image of the
kinds of groups they thought were being helped. Some would see
people who give of their time and resources to feed the hungry.
Others would picture disaster relief workers. Some might see medi-
cal researchers searching for a cure for diseases, and others might
picture doctors and nurses providing free medical care to the poor.

Not many would imagine a well-paid troop of lawyers marching
to court to change public policy. Not many would picture lobbyists
and propagandists attempting to steer public opinion. And not

(5)


150

done to them, and that in no way is justified as far as our intent.
But do you see any possible other route to correct the situation in
changing the criteria?

Mr. DEVINE. I would say as a practical level.

One thing when Mr. Morris’s comment, if you were to go to
straight legislative change, I would suggest that you refer to the
old Federal Register proposal. When we made our proposal for the
Federal Register on August 1, 1983—we spelled out very specifi-
cally how to make real reforms. The President’s Executive order
was only general.

The August 1, 1983 regulations specifically say how you could do
real reform, right down to the level of administration. But I recog-
nize the problem that you face, because I faced the same thing. As
a matter of fact, the overwhelming number of traditional health
and welfare charities agree with the San Diego testimony.

The difference is his people have the courage to say it. All of the
traditional charities will tell, and have told me, the ones I have
talked to, that they want it restricted.

Why don’t they say that publicly? Some of the reasons Mr. Mor-
ris mentioned about public controversy, courage; mainly they feel
they don’t want to get out in front and be subject to the controversy
themselves. It is very hard to do that. So practically, I would sug-
gest you reverse the appropriations rider so that when we have a
new administration someday, which I have every confidence we
will, the new President will be free and a new Director of the Office
of Personnel Management will be free to write that Executive order
again with our regulations.

Thanks to Mr. Morris’s diligent research, they can go to this
book, look them up and republish them. I understand how dif-
ficult—at least allow the next President and the next Director of
the Office of Personnel Management the freedom to make the right
changes.

Mr. Mica. Thank you. Mr. Barrett, you had testified to some of
these organizations have in fact created fronts to qualify their ad-
vocacy groups for participation. Is this a limited practice or did you
see or have you seen most of these groups to qualify alter or create
entities that qualify?

Mr. BarReETT. In the example I was giving you, I was thinking
of one specific group, but there were other groups at different
times, we had challenged their eligibility for violations of one—they
didn’t meet one of the criteria. And we—we got overruled on them
or else they had another group that was eligible, but the story I
was talking about was one specific group. But there were other
ones that we were suspicious of as we read their applications.

Mr. Mica. One of the things that’s disturbing to me in the proc-
ess is there is no choice for the taxpayer of participating. They un-
derwrite this whole activity whether they want to or not. And we
posed a question this morning again, should these groups pay a
larger percentage of costs involved.

Are there any opinions from the panel members on, again, re-
quiring either the charities or participating groups to pay a larger
share of the taxpayer-fronted costs.

Mr. Burrus.


42

subsidizes the CFC and 2) the federal government should not be
subsidizing "advocacy" organizations. We believe this argument is
faulty on two grounds.

First, essentially every charity advocates its cause and
services. If a disease organization, say, one involved with
cancer, promotes a certain lifestyle, i.e. a high fiber diet,
regular checkups, etc., as a means of prevention, does this
constitute forbidden or restricted "advocacy"?

The NRL Educational Trust Fund's promotion of childbirth or
adoption is "advocacy" to some, but to others it is the most
important prenatal health service the child can receive, if the
alternative is death by abortion. Thus, "advocacy" may largely be
in the eye of the beholder. Under the current system the donor is
free to decide for himself, and we believe it should remain that
way.

All charities in the CFC are limited by IRS regulations in the
percentage of lobbying they may undertake. We believe this is a
much more proper and precisely defined restriction, than the much
more ambiguous and arbitrary concept of "advocacy.

Since all organizations within the CFC are 501(c)(3)
organizations, they are already forbidden to engage in any partisan
political activity.

Second, the charities in the CFc are not "subsidized" with
taxpayer funds in the way that most people think of when one speaks
of a government subsidy. All of the funds received by the NRL
Educational Trust Fund through the CFC are given by federal
employees from their own funds. We pay out of our proceeds a
proportionate share of the costs associated with the campaign for
items such as printing.

The "subsidy" cited as a reason for eliminating sone
organizations from the campaign is the time on the job of those
federal employees who volunteer to assist the campaign in ways such
as soliciting contributions, and the time employees spend in "kick-
off" meetings where participation is encouraged. This time and the
associated cost in labor hours will not change at all if the
targeted groups are eliminated. There will be no taxpayer savings.

Rather, federal employees would continue to be encouraged to
give their money in the campaign. But for many federal workers the
charities they wish to donate their own money to will have been
eliminated.

In fact the proposed changes are sure to

associated with the CFC. Surely, far more
federal cnploves hours will be required, on an ongoing basis, to
determine who is eligible and who is not, whether or not an

4


161

interest in charitable giving in the workplace, but also a form
of individual expression that can be beneficial to the workplace
and to the worker.

Not surprisingly, federal employees clearly enjoy and prefer
having a broad range of choices such as those currently available
through the CFC. A June 1995 survey’ of 800 randomly selected
federal employees confirmed that 71.5% of federal workers “are
satisfied with the way the Combined Federal Campaign is run."
Most of the respondents (88%) “believe that federal employees
shouldbe able to choose to support -- through the Combined
Federal Campaign -~ charities that speak out on behalf of the
people they help." A 66.3% majority of employees do not "feel
Congress should limit the types of charities that you can support
in the Combined Federal Campaign.”

Given the overwhelming support for the current CFc structure
by federal employees, congressional efforts to restrict
participation, and thus the employees’ choices, appear to be
nothing more than a politically motivated effort to limit federal
employees’ role in the democratic process.

B. The Fundamental Principle of Free Speech Entitles

Charities to ipate

Charitable solicitation of funds is a form of speech fully
protected by the First Amendment to the United states
Constitution. As the Suprene Court noted in Village of

Better Environment, 444 U.S. 620,
632 (1980): "Soliciting financial support is undoubtedly subject
to reasonable regulation but the latter must be undertaken with
due regard for the reality that solicitation is
characteristically intertwined with informative and perhaps
persuasive speech seeking support for particular causes or for
particular views ... and for the reality that without
solicitation the flow of such information and advocacy would
likely cease." In Cornelius v. NAAC! se
Fund, 473 U.3. 788, 799 (1985), the Court held that solicitation
by charities in the Combined Federal Campaign, even though
limited in scope, fully qualifies for First Amendment protection.

Although solicitation for funds is subject to reasonable
time, place and manner regulation to protect the functions of the
federal workplace, the Suprene Court unaninously held in

that the federal government may not discriminate among
Gharities admitted to a workplace campaign based on the
viewpoints those charities advance. Cornelius, supra, at 811-813

* Fabrizio, McLaughlin & Associates, Inc. Executive Summary -
=_Combined Federal Campaign Survey of Federal Employees, June 6,

1995.


13

support, but I’ll share with you that I don’t think some of them deserve a dime, or even deserve
10 be listed along side those I consider worthy. The problem is that cach of us has different
CEC agencies on each list. Who is to say which of us are more correct in their judgements?
Tam persuaded that we must do what the founding fathers did when they established this nation:
trust the people! That means trusting the donors to make wise choices. Their choices will
ultimately reflect the values of society as a whole and we must trust that our American society
will find the right course. And so I work to ensure that the CFC has good governance but is
inclusive, trusting that the informed choices of the individual donors comprise a reliable
guarantee that more good is being done by this course than any of the alternatives.

In summary, allow me to state again that current CFC arrangements, regulations and practices
are the best I've seen. Choice is broad. Costs are low. Donors are happy. Many people are
being helped. Please don’t try to fix something that isn’t broken.


82

But even more important than the benefit to particular charities of participation ia
the CFC is the benefit to federal emptoyees. It must be kept squarely in mind that what
is being discussed is the right of a federal employee to choose freely to whom and to what
‘cause he or she will donate bis or her money’ The Legal Defense Fund has received over
the years an average of over $500,000 per year from the Combined Federal Campaign.
‘This substantial amount of support, which last year was 69% of our budget, bas been
contributed by thousands of federal employees’ No one has made anyone donate to us,
individuals have given us their money because they believe that our program deserves their
support. With all due respect, no one, including the Congress of the United States, needs
to of should dictate to federal employees which charities are “better” than others or which
are undeserving of their support

‘To sum up, the NAACP Legal Defense and Educational Fund, fnc., and similae
organizations are just as bona fide charities as any others. We provide direct services
valued in the hundieds of millions of dollars to hundreds of thousands of persons in need.
Our work provides direct and tangible benefits in the areas of health, education, and
buman welfare. We have received the support of thousands of federal employees who have
freely chosen to donate over $7,500,000 in theit money to us in the fifteen years we have

ticipated in the CFC. There is no reason why we should not continue to participate in
the CFC, and we will take every step necessary to ensure that we do.

‘Thank you for your time and your attention.

Charles Stephen Ralston
Senior Staff Attorney

The figures for the years 1990-94 are as follows:

1990 $561,651
1991 $571,434
1992 $493,660
1993 $423,263
1994 $485,495


COMBINED FEDERAL CAMPAIGN: LAWYERS AND
LOBBYISTS VS. PEOPLE IN NEED?

HEARING

BEFORE THE

SUBCOMMITTEE ON
CIVIL SERVICE

OF THE

COMMITTEE ON GOVERNMENT
REFORM AND OVERSIGHT
HOUSE OF REPRESENTATIVES

ONE HUNDRED FOURTH CONGRESS
FIRST SESSION

JUNE 7, 1995

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

ee

U.S. GOVERNMENT PRINTING OFFICE
36-741 CC WASHINGTON : 1997

For sale by the U.S. Government Printing Office
‘Superintendent of Documents, Congressional Sales Office, Washington, DC 20402

ISBN 0-16-054253-7



108

crucial changes in the ground rules that apply to its decisions
whether or not to admit charitable solicitation.

But one ground rule doesn’t change, and that is that the govern-
ment is under no obligation to allow any charitable solicitation in
the workplace at all, and it is only by Executive orders of succes-
sive Presidents expressly allowing it in part to close off myriad
kinds of little ad hoc solicitations that disrupt the workplace, only
by those express affirmative decisions is charitable solicitation al-
lowed at all.

The question is, once you open the door to any charitable solicita-
tion, must you open the door, in effect, as the LDF has argued for
a decade-and-a-half, to all charitable solicitations? And this is the
heart of the matter.

Mr. Chairman, I submit that it is constitutionally and legally
possible for the government as an employer to decide that it is
going to limit the opportunity—that it is going to open its doors to
solicitation but limit that solicitation to charitable organizations
that the government selects on the basis of neutral and objective
criteria.

I submit, Mr. Chairman, that an excellent effort at elaborating
neutral and objective criteria was made by President Reagan in his
1983 Executive order and that the meaning of Mr. Reagan’s 1983
Executive order was successfully elaborated by Director Devine’s
1983 implementing regulations.

And what those objective and neutral criteria do is exactly what
Director Devine has already told you; Justice O’Connor said in the
decision of the U.S. Supreme Court in Cornelius v. the NAACP
Legal Defense and Education Fund in 1985, that it is a permissible
decision for the government to make that a charitable dollar spent
on direct human health and welfare services is more valuable as
far as the government is concerned than a charitable dollar spent
on legal, political or other advocacy decisions and therefore the gov-
ernment decides that it will subsidize the collection in the Federal
workplace of the former as opposed to the latter, a legitimate, a re-
sponsible, a constitutional distinction, and a constitutional distine-
tion that the Supreme Court said in that case can be made on
grounds that on their face are neutral and objective and therefore
perfectly constitutional despite the peculiar first amendment rules
that apply only to government workplaces and to no private work-
places.

Against that background comes a simple question, is this system
currently broken?

The answer is, you bet it is broken when this wonderful oppor-
tunity that successive Presidents have given and that generations
of Federal employees have followed up on—to provide generous
support to human health and welfare philanthropies, when that
spirit, that impetus, that subsidy and those moneys are being di-
verted to other causes. Those other causes may well be legitimate.

I support some of them. I am, in fact, President and CEO on a
volunteer pro bono basis of a 501(c)(3) legal defense organization
that refuses to participate. My board has directed that we not par-
ticipate in the CFC precisely because my board wants to avoid any
avoidable governmental subsidies of any kind and it is certainly


182

Attached to this leter is documentation which further illustrates our stream and
river restoration and conservation education work. We appreciate the opportunity to
submit comments on this important issue.

Sincerely,
Ya |
Steven N. Moyer Neal D. Emerald

Director of Government Affairs Legislative Assistant

cc: Members of the House Civil Service Subcommittee


181

-20-
the president. Political advocacy groups should get their money elsewhere."

It was reported that even Bremerton, Washington, welcomed the news of the Executive Order

and the Presidential emissary who brought it.

On June 24, 1983, OPM proposed regulations to implement Executive Order No.
12404. Lawsuits followed the issuance of the President's order and trial-level decisions were
reached during the comment period that followed OPM’s proposal of its implementing rules.
In the commentary accompanying final publication of the 1983 rules, OPM assayed the litigation
in the following terms:

Near the end of the comment period, on July 15, 1983, the United States District
Court for the District of Columbia entered an order in NAACP Legal Defense and
Educational Fund, Inc. v. Devine, Civil Action No. 83-928 (NAACP Defense Fund).
That lawsuit generally questioned the constitutional validity of Executive Order No.
12404. The court order, however, more narrowly enjoined OPM from excluding seven
plaintiff legal defense funds from the CFC if such exclusions were based on certain
eligibility criteria set forth in Executive Order No. 12404. (See Executive Order No.
123523, sections 2(b)(1)-2(b)(3), as amended by Executive Order No. 12404, section
1(b)). The court order has been applied subsequently to other organizations seeking to
obtain eligibility in the CFC through litigation. See Planned Parenthood Federation of
America v. Devine, U.S.D.C., D.C., Civil Action No, 83-2118 (order entered July 26,
1983)(Planned Parenthood).

‘The Government is appealing from the district court's order in NAACP Defense
Fund and will vigorously defend Executive Order No. 12404 in all other pending
litigation. Unless and until the court's order in NAACP Defense Fund is modified or
reversed, OPM will, of course, obey it, OPM will also treat organizations similarly
situated to the NAACP Defense Fund plaintiffs (i.e., simitarly organized, non-profit

% See Appendix, Exhibit 24.

See Appendix, Exhibit 25.

® The full text of OPM’s proposed 1983 rule, as published at 48 FEDERAL
REGISTER 29458 (June 24, 1983), is set forth at the Appendix, Exhibit 26.

© 48 FEDERAL REGISTER, 34910 34913-34914 (August 1, 1983). The full
text of OPM’s 1983 rule is set forth at the Appendix, Exhibit 27.


159

First, any such change would unreasonably limit federal
employees’ ability to select the charitable activity of his or
her choice.

Second, the fundamental principles bf free speech entitle
charities to participate in public-workplace campaigns regardless
of the viewpoint that charity may represent.

Third, further restrictions on participation in the CFC
based on advocacy activities is a non-solution to a non-problem.
The IRS restrictions on the legislative endeavors of CFC
charities are adequate and effective. Allowing the federal
government to further dictate what are acceptable activities is
not only unnecessary, but problematic because of the difficulty
in selecting additional criteria that can be implemented’ and
enforced without undue confusion and controversy.

Finally, further limitations will not save taxpayers or the
federal government significant sums of money. The costs of the
cFc are direct and indirect fixed costs which do not decrease,
and may increase, with a lesser number of charities
participating.

II. Relevant Background on the Sierra Club Legal Defense Fund

As a nonprofit, public interest environmental law firm, the
Legal Defense Fund provides direct human health and welfare
services free of charge to people throughout the United States.
As described above, we represent a broad spectrum of groups and
individuals in lawsuits and administrative proceedings to protect
public lands and forests, to save wildlife and endangered
species, to control pollution and other toxins in neighborhoods
and communities around the country, and to establish appropriate
plans for local development and growth. Americans are the
beneficiaries of healthier environmental and recreational
opportunities as a result of the Legal Defense Fund’s efforts.

In reviewing the Legal Defense Fund’s work, the Office of
Personnel Management (OPM) explicitly concluded that the Legal
Defense Fund is a "human health and welfare organization" and
thereby eligible to participate in the CFC:

An agency that "provides environmental legal services
that ... have a positive, beneficial effect on air quality,
water quality and other aspects of the environment ...
necessarily improves the quality of human life, and
therefore ... qualifies as a ‘human health and welfare’.
organization." Letter of Decision regarding Sierra Club
Legal Defense Fund from Hugh Hewitt, General Counsel, Office
of Personnel Management, to J.K. Parker, Chairman, South
Hampton Roads LFCC (July 31, 1987).

2




191

ity, the TU-led project involves installation of four but-
terfly valves on the South Holston labyrinth weir, to-
cated 1.2 miles below the South Holston Dam, to in-
crease stream flows by over 44 percent. The resulting
increase in water depth will substantially improve South
Holston’s habitat for rainbow and brown trout, as well
as other aquatic species.

Oregon Council — As part of a major EAS/Bring
Back the Natives restoration effort, TU’s state council
and several chapters in Oregon ase resolving fish pas-
sage problems on tributaries to the McKenzie River
watershed, located in the Willamette National Forest
TU volunteers are also involved in reseeding efforts,
instream habitat improvements, and ripartan recovery.

The effort, which is supported by the U.S. Forest
Service, the Bureau of Land Management, and the Or-
‘egon Department of Fish and Wildlife, will rebabili-
tate a total of three miles of habitat for buli trout, cur-
rently considered as “warranted but precluded” for list-
ing under the Endangered Species Act; redside rain-
bow trout; Chinook salmon; and westslope cutthroat,
and wil reintroduce another year class of bull trout in
4 miles of two of the tributaries

Deschutes River Chapter (OR) — The dramatic de-
cline of fall Chinook salmon has spurred the Deschutes
River Chapter to work with the Confederated Tribes of
the Warmns Springs Reservation of Oregon (CTWS).
the Bureau of Land Management and the Oregon De-
partment of Fish and Wildlife to take a life-cycle ap-
proach to population recovery.

The first stage of the effort, which is also a Bring
Back the Natives project, focuses on protecting and en-
hhancing riparian areas along the Deschutes and Warm
Springs Rivers. Over four miles of streamside fencing
and three miles of pasture fencing will be constructed
to protect riparian vegetation and aid in livestock man-
agement. A $2,250 EAS grant, which will be matched
by the National Fish and Wildlife Foundation, will en-
able project partners to acquire eight solar jacks that
will fill water tanks for livestock and wildlife use away
from the riparian corridor. This effort will benefit
Chinook salmon, redband trout and bull trout

Klamath Basin Chapter (OR) — To provide pro-
tection for a one-half mile reach on either side of Deep
Creek, an important spawning and juvenile rearing

tributary to the Williamson River in Klamath County,
Oregon, the Klamath Basin Chapter will use a $4.150
EAS grant to connect z half mile of smooth wire fenc-
ing on each side of the reach to the three-quarter miles
of fencing that has already been installed on public
lands. The total 1.25 miles of protection wil! provide
increased riparian recovery, lower water temperatures,
better flows, and cleaner spawning gravel for Deep
Creek's native redband rainbow trout.

Ochoco Chapter (OR) — The Ochoco Chapter will
continue its award-winaing environmental education
‘project with the Crooked River Ecosystem Education
Council An $2,520 EAS grant will assistin the devel-
‘opment and implementation of natural resources cur-
iculum for grades K-12. Students will collect data,
‘monitor and survey the Crooked River watershed, and
protect redband rainbow and bull «rout populations.

Sandy River Chapter (OR) — The Sandy River
‘Chapter will use a $5,000 FAS grant to support the
Beaver Creek Project at Centennial High School. The
project aims to raise community awareness of the need
to protect, enhance, and restore the Beaver Creek wat
tershed.

Project activities will address increased turbidity due
to soil erosion, insufficient anadromous fish habitat,
and elevated water temperatures. Beaver Creek cur-
rently supports wild runs of Coho salmon, steelhead
trout, and cutthroat trout,

Donegal Chapter (PA) — A $5,000 EAS grant will
further the Donegal Chapter's effort to restore eroded
stream banks along Lititz Run, a scenic limestone
stream in Lancaster County. The Chapter will use lime-
stone rock, fencing, native plantings to restore banks
‘and habitat, benefiting Lititz Run's wout fishery. The
project is supported by the Chesapeake Bay Founda-
tion, as part of an overall effort to restore the Chesa-
peake Bay watershed.

Pike- Wayne Chapter (PA) — The Pike-Wayne Chap-
ter received $3,700 for the second phase of construc-
tion in a project to restore refuge and foraging habitat
for the resident brown trout population of the
‘Wallenpaupack Creek. With technical and financial
support from the Pennsylvania Fish and Boat Commis-
sion, the Chapter has scheduled five work days to in-


109

the case that the CFC involves a governmental subsidy of the col-
lection of money.

Yes, there is a harm when the government is forced to use tax-
payer money to subsidize the collection of funds for charities whose
work, whatever it is, whether I approve or disapprove of it, or you
approve of it or disapprove of it, goes to support something other
than the lessening of the burdens of government, and that is one
perfectly valid objective distinction that can be made.

For what human health and welfare agencies that deliver direct
services to poor and needy and sick people do is they lessen the
burdens of government. What organizations like the NAACP Legal
Defense and Education Fund or the Lincoln Legal Foundation, of
which I am the pro bono president, do, in many instances, is to liti-
gate trying to get government to spend money to take action, not
lessen the burdens of government, but impose burdens on govern-
ment.

That is a legitimate kind of distinction to be drawn and succes-
sive Presidents have drawn that distinction.

Mr. Chairman, let me conclude with just a couple of quick com-
ments about some issues that have come up in testimony through
the course of the day today to which perhaps the further scrutiny
of the subcommittee may in due course be directed. Reform of the
Combined Federal Campaign does not at all necessarily mean de-
nial of choice, because, remember, most charitable solicitation giv-
ing takes place out of the workplace altogether and there is nothing
about any of the reforms that are being considered today, nothing
about any of the reforms in President Reagan’s 1983 Executive
order that in any way impose any limitations upon what people do
with their own money on their own time in their own way outside
the workplace.

Second, Mr. Chairman, I think that careful attention should be
given to that chart that the Deputy Director of OPM displayed
today. On careful review, I don’t believe that chart shows that
there has been a steady increase in constant dollars in average

gifts.

In fact, I think it shows that in the time period displayed on the
chart from 1965 through 1993 the per capita held constant in con-
stant dollars, went from about $11.50 down to $10. That was a
more or less constant squiggly line across the chart. The black line
that held steady for many years and shot up from 10 to nearly a
thousand in the space of under 10 years was the total number of
organizations participating in the CFC.

It was held steady at $10 until the LDF punched a hole and then
the number of national—not local but national—organizations par-
ticipating in CFC shot up from 10 to nearly 1,000 in the 1993 cam-
paign, and that does not count the additional hundreds and thou-
sands of 501(c)(3) organizations that participate in the Combined
Federal Campaign at local levels.

Absolute dollar giving is falling off. It peaked a few years ago
and has been coming down according to OPM’s figures in each of
the last three or four campaign years. Absolute numbers of people
participating is falling off. That may be in part due to changes in
the size and composition of the Federal workforce. The undeniable


30

Mr. Mica. We actually have fewer people participating but a
larger per capita—is that adjusted for inflation?

Ms. GREEN. Yes, it is. Yes, it is.

Mr. Mica. OK. One of the things that concerns me is, I partici-
pated recently in a program relating to this matter, and one of the
advocates on the other side said that there are literally hundreds
of thousands of eligible organizations that can qualify under exist-
ing criteria and, in fact, felt that they should be participating.
Which means that you would basically be publishing a catalog the
size of the Washington telephone directory by the time we get
through this. Is this true that there are hundreds of thousands of
501(c)(3)’s that could qualify for this?

Ms. GREEN. There are. There are quite a few 501(c)(3)’s who
could qualify, and the telephone book would probably be the size.

Mr. Mica. It could end up the size of a telephone book?

Ms. GREEN. Yes.

Mr. Mica. In fact, I think we have 489,891 501(c)(3)’s.

Ms. GREEN. Yes.

Mr. Mica. That could end up almost a half a million, and most
of those would be eligible under current definitions?

Ms. GREEN. I am not sure that most of them would be eligible
under current definitions. Certainly, we have some new regs that
are coming out.

Gerri, if you want to respond.

Mr. Mica. The other thing I asked you about before was the ad-
vocacy groups. And I begin to wonder about some of these
nonhuman health and welfare groups—for example, the National
Wild Turkey Foundation, the Rocky Mountain Institute, the Save
Energy Communications Council, the Center for Investigative Re-
porting—well, maybe we should keep that one.

And if Dr. Kevorkian established a 501(c)(3), he also might qual-
ify under some of your current definitions, is that correct? Is that
appropriate?

Ms. GREEN. No, I don’t think so. We have pretty strict eligibility
standards and criteria. And unless an organization can show that
they affect the health and human welfare they will not be admit-
ted. So there are quite a few 501(c)(3)’s who would not be admitted.

Mr. Mica. Including the groups like the Safe Energy Commu-
nication Council. They do qualify——

Ms. GREEN. I’m not sure.

Mr. Mica [continuing]. Under the current criteria?

Ms. GREEN. I’m not sure about that particular organization.

Mr. Mica. They are listed—so they must qualify.

Well, there are basically two ways I think that we can bring
about some positive changes to this—and one is by rulemaking and
some changes in procedure.

Today, you have testified that you would support publishi:
some disclosure of who is getting what and that you might look at
supporting some adjustments in the cost to the taxpayer for some
of these funds—even if we can’t agree today on what they are. You
are not willing, however, to get into any changes in definition or
eligibility, is that correct?

Ms. GREEN. That's correct.


89

agreement on finding ways to limit the definition of who is eligible.
Is that pretty much the consensus of the panel?

Captain HOLLENBACH. Mr. Mica, I would like to make an excep-
tion to that.

Mr. Mica. Go ahead.

Captain HOLLENBACH. On the cost matter, what I tried to com-
municate in my comments were I think the benefits that accrue to
the organizations that participate outweigh the costs. If you are
going to add up indirect costs, I think you have to add up indirect
benefits.

My personal feeling as a commanding officer was that I got more
benefit out of my organization Participating in a CFC than any
costs I incurred, and so I would argue that that is probably the
case across a wide portion of at least the Department of Defense.

Mr. Mica. Well, we thank you for your comments, your insight
and perspective.

As members of this panel deeply involved in this process, are
there any other ways that you see that the Federal Government
could increase participation, barring Mr. Ralston’s comments re-
garding the past use of pressure and brute force?

Mr. RALSTON. I think to the extent that people feel they have a
free choice and there are organizations they want to give to, they
will make that choice to give.

Mr. Mica. But we actually see a decline in participation. I think
we have a responsibility as an employer to try to involve the
workforce in these types of charitable activities. Do you see some-
thing that they are doing wrong or something we can improve that
doesn’t necessarily have to be by legislative fiat, but in the process?

Mr. HOWLAND. I would encourage agency heads to take a more
active role in the campaign. I think that the participation of an
agency reflects directly the leadership that’s provided in terms of
the Combined Federal Campaign by that agency head, be it in
Washington or another city like San Francisco.

Just in the Combined Federal Campaign in San Francisco, there
was a direct correlation between participation and giving in agen-
cies where the head of that office really made a pitch for the CFC
and encouraged in a very positive, unobtrusive way his or her em-
ployees to get involved, and then took a leadership by making a
first pledge. It really does make a big difference.

Mr. Sopo. I would just suggest, Congressman, to echo what Mike
said about leadership, there are recognition programs for Federal
employees that we can perhaps do a little better at. If there is a
culture within the Federal Government that we do want to encour-
age volunteerism, we do want to encourage giving, we do want the
private sector to play more of a role in solving human problems,
then the way to demonstrate that is through support of the leader-
ship, the commitment of the Federal Government to the CFC. And
I think, again, there are ways to explore that.

There is no question there is room for improvement. I don’t think
if we’re at an 80 percent level, frankly, it’s realistic. You probably
have coercion if you’re at an 80 percent level.

Mr. Mica. I want to thank each of the panelists for participating
today, and we may submit some additional questions to you for the


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84

Mr. Mica. We welcome this as we continue this process.

Mr. O'STEEN. I can give you an answer back in writing to that,
sir.

Mr. Mica. We appreciate your comments.

And, Mr. Howland, you did a questionnaire. I noticed the word-
ing in your questionnaire was related to support of charities. Is
that correct?

Did you do any additional questions to determine whether the re-
spondent would give if they knew their taxpayer dollars were sup-

ting some of these noncharitable advocacy groups or nonhuman
health and welfare groups? I mean, if someone came to me and
asked, do you support charitable giving, hopefully, I would answer
in the affirmative. So it’s all the way you ask the question. Was
there any additional questioning?

Mr. HOWLAND. There was some additional questioning, and I will
submit it for the record.

Again, we just received the results of this poll last evening, but
this was a-—

Mr. Mica. Is there anything that further defines the issue? Be-
cause we are not here today to impose any restrictions on giving
to traditional charities. That is not the purpose of this hearing.
And your question is sort of skewed to elicit a very positive re-
sponse. Are there any other questions that were asked?

Mr. HOWLAND. Yes, there were a number of questions. One that
I think is most important—and, again, this was a poll of 800 Fed-
eral employees, and this was not—so this was not in the public at
large—but 66.3 percent do not feel that Congress should limit the
types of charities that can be supported in the Combined Federal
Campaign.

Mr. Mica. But 36 percent did.

And, again, you used the definition of charities. Was there any
other definition of the term charity?

Mr. HowLanp. Actually 24.8 percent said, yes, that it would be
OK to limit charities in the Combined Federal Campaign.

Mr. MICA. Again, that term charities. Was there any other use
of any other definition? What we have to zero in on here, is the role
of advocacy groups or nontraditional charities or those that deal
with nonhuman health and welfare assistance.

Mr. HOWLAND. The only other way that was used to distinguish
between traditional charities and others was the question that
said, do you believe that Federal employees should be able to
choose to support through the Combined Federal Campaign char-
ities that speak out on behalf of the people they help? the an-
swer to that question was a resounding 88 percent yes.

Mr. Mica. You and Mr. Sodo both represent organizations of
charities. In the realm of charitable giving and the history of chari-
table giving, maybe in the United Way, do you see the same trends
as you see in the public sector? Now we have reduced from 80.7
percent participation down to 47 percent participation and giving.

's that following a private sector trend?

Mr. HOWLAND. We're seeing in the private sector that giving par-
ticipation is going up as choices are expanded. Giving went up—
giving participation went up, for example, in the United Way in
San Francisco.


12

In this era of tight budgets and cutbacks on federal
programs, there is all the more reason to encourage the sort of
private giving that CFC embodies.

The CFC program has worked well for a long time, and we
at OPM do not believe it is in need of major changes. Some
observers may think that this or that charity, out of the hundreds
on the list, is inappropriate, but the people it serves value their
freedom of choice. They vote with their paychecks.

For their selections to be restricted, for what some may
perceive as ideological reasons, strikes me as a form of big-
governnent-style paternalism that we should avoid.

Now, Mr. Chairman, let me address your specific
questions.

First, should participation in CFC be restricted to human
health and welfare organizations?

The answer is yes, and, as I have said, we do require
that all organizations certify and document that they provide
services affecting human health and welfare. The underlying
question is how these terms are defined. Our present criteria are
consistent with the principle of inclusion that has guided cFc
eligibility determinations over the past decade. This principle of
inclusion was validated by federal courte and was subsequently
_ mandated by Congress.

If we narrow or restrict participation now, we run a
serious risk of not only of over-regulation, but of reviving the
kind of divisive litigation we saw in the 1980s.

Second, you asked what should be the central purpose of

the crc.

One original purpose, as the 1957 Executive Order made
clear, was to minimize disruption in the federal workplace, “by
replacing a multiplicity of charitable campaigns with a single one.
But the campaign also embodies the American tradition of
volunteerism, and at the same time gives federal workers an
efficient way to contribute to causes of their choice.

Third, how much did it cost the federal government to
conduct the CFC in 1994, including the pay and benefits of all
employees who helped to conduct the campaign, and how many
enployees vere involved?

Mr. Chairman, the federal governnent’s cash outlay for
the crc is limited to certain direct costs expended by OPM in its
oversight capacity.


205

upon advocacy expenditures and prohibitions on engaging in partisan politics via
‘campaign contributions and endorsements. Further, of a total budget of $297.3 million,
of which nearly $100 million was spent on funding for biomedical research and $100
million on public and professional education, far less that $1 million was expended on
advocacy efforts, less than 1/2 of 1 percent of our total budget.

Further, legislation passed in 1987 states that requirements for eligibility “shall
not, to the extent that such requirements relate to litigation, public policy, advocacy. or
attempting to influence legislation, be any more restrictive than any requirements
established with respect to those subject matters under Section 501(c)(3) of the internal
Revenue Code of 1986." Further, the Conference Report to that legisiation states that
the OPM is prohibited from imposing additional limitations on the eligibility of agencies
which lobby or conduct public policy advocacy in their charitable activities.

Charities and government agencies have long worked as partners in
addressing social needs. However, the Contract With America calls for deep cuts in
federal spending on social programs and Congressional leaders have stated that the
non-profit sector will be called upon to provide many of these programs. With
charitable giving expected to increase by only $3 billion a year and average household
contributions dropping between 1989 and 1993 by a disturbing 23 percent after
inflation, the non-profit community will be hard-pressed to pick up the slack.

As an organization which strives to work towards a better America, a
more productive and healthier America, which believes that it is important to partner
with government and corporations in order to make a difference in the quality of life in
this country, we are concemed that some members of the House leadership are

attempting to censor, prohibit and dampen legitimate organizations and corporations


54

Testimony Submitted to House Civit Service Subcommittee 4
by Michsel Howland, President, Independent Charities of America
on the Combined Federal Campaign

demonstrate conclusively that, as donors are provided with more choice, more are likely to give,
and those who give are likely to give more, Of our collective 416 ICA members, we estimate
that between 100 and 158 could be eliminated if participation were restricted to traditional health
and human service agencies. However, the overwhelming majority of our members who would
not be affected by restricting participation favor maintaining the current standards for eligibility,
recognizing that, much as Combined Federal Campaign donations soared when the campaign was
expanded, they will decrease if the campaign is restricted, hurting indirectly those charities that
any legislation purportedly may benefit.

I never have heard an employee complain that there are too many choices. Each of
ICA's member federations annually surveys Combined Federal Campaign donors. Freedom of
choice is cited consistently as a reason for giving. In fact, an amazing 93% of federal
employees approve of continuing to allow federal employees the right to voluntarily make
charitable contributions through workplace giving to the charities of their choice. Almost nine
of ten respondents "believe that federal employees should be able to choose to support - through
the Combined Federal Campaign - charities that speak out on behalf of the people they help.”
‘These are the findings of an independent study of 800 randomly selected federal employees by
the firm of Fabrizio, McLaughlin and Associates. Iam submitting the entire survey (attached)
as part of my testimony for the record.

Our 12 member federations have adopted stricter admissions standards than those
promulgated by OPM. I have attached them for your consideration (along with the 5 year
history you have requested) should the sheer size of the campaign be a genuine concem.
However, I encourage you to retain criteria for admissions in the Combined Federal Campaign
as they are crafted today. This is no time to heap an intricate quagmire of regulations and
definitions on a marketplace that is served extraordinarily well by federal employees who are
capable of choosing charitable organizations to whom they give their hard earned salaries,

Again, thank you for allowing me this opportunity to address this issue before you today.


m7

feel they belong to several different communities:
neighborhoods, cultures, cities, regions, countries, the
world.

The emergence of new social issues and the creation of
new charitable organizations to address these issues has
changed the face of charitable giving in the United States.
Increasingly, the traditional definition of "health and human
welfare" services is changing, and becoming more inclusive.

A study by the United Way of America shows that as
United Ways across the country attempt to meet the changing
needs of communities, they are broadening their definitions
of “health and human service," as well as allowing choices
beyond "health and human service" to other service domains,
including environmental and conservation services.

This expansion is mirrored by the increasing numbers of
governmental workplace campaigns that have broadened their
employees' giving choices to include environmental and
conservation charities, recognizing that such charities
provide crucial health and welfare services.

The health of our environment directly and substantially
impacts all aspects of human health and welfare; indeed,
health and welfare is the central concern of environmental
organizations.

An example of this impact is the problem of lead in our
communities. Deteriorating paint in many older homes and
lead-contaminated soil threaten the health of young children,
who ingest lead dust while playing. Childhood lead poisoning
was once one of the chief causes of learning disabilities,
and even death, in children in this country.

Since the 1970s, however, Earth Share's member agencies‘
have worked to educate the public about the dangers of lead
poisoning. They have helped develop policies -- including the
phase-out of lead from gasoline -- that protect children from
lead poisoning today.

The problem of childhood lead poisoning is far from
solved, however. Controlling the remaining lead in the
environment remains an urgent priority. Our member agencies
continue to work to protect the health of children, and
particularly children from disadvantaged and urban areas,
whose communities are often at greater risk of exposure to
toxic pollutants.

Is it therefore more important to address the social and
developmental needs of children who have been impaired by
lead poisoning, or to research better cures for lead

4


96

These activities are in keeping with Article III of the Firearms Civil Rights Legal Defense
Fund's constitution, which established its purposes as follows:

‘A. Voluntarily to assist in the preservation and defense of the human, civil, and/or
constitutional rights of the individual to keep and bear arms in a free society;

B. To give financial aid gratuitously and to supply legal counsel, which counsel may or may
not be directly employed by this Fund, to such persons who may appear worthy thereof, who are
suffering or are threatened legal injustice or infringement in their said human, civil, and constitutional
rights, and who are unable to obtain such counsel or redress such injustice without assistance,

C. To conduct inquiry and research, acquire, collate, compile, and publish information, facts,
statistics, and scholarly works on the origins, development and current status of said human, civil, and
constitutional rights, and the extent and adequacy of the protection of such rights,

D To encourage, sponsor, and facilitate the cultivation and understanding of the aforesaid
human, civil, and constitutional rights which are protected by the constitution, statutes, and laws of
the United States of America or the various states and territories thereof, or which are established by
the common law, through the giving of lectures and the publication of addresses, essays, treatises,
reports, and other literary and research works in the field of said human, civil, and constitutional
rights,

E. To make donations to organizations which qualify as exempt organizations under Section
501 (C3) of the Internal Revenue Code of the United States or the corresponding provision of any
future Internal Revenue Law of the United States

In conclusion, the aforementioned examples of FCRLDF activities affecting human health
and welfare indicate FCRLDF has complied with 5 CFR 950.203(b)_ It should continue to be eligible
for participation in the CFC as a national organization

Respectfully submitted,

Reebact Yow bat—

Robert Dowlut
Secretary
Firearms Civil Rights Legal Defense Fund


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185

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170

Each of Earth Share's 43 member agencies works for the
prevention of human health problems through their efforts to
eliminate air, water, and toxic pollution; for the
preservation and conservation of fresh water, marine, and
land resources; and for the development of educational
programs which promote a sound and balanced use of natural
resources.

All Earth Share agencies must meet stringent eligibility
criteria that are intended to assure the public that all
member organizations hold to the highest standards of
accountability and charitable practices. Earth Share and all
its members have been granted non-profit tax-exempt
charitable organizations status under I.R.S. Section 501
(c)(3), and all are subject to strict limitations on lobbying
and are prohibited from political activities, including
endorsing candidates or political parties.

Earth Share now participates in workplace campaigns with
many corporations and governmental employers, including
seventeen state governments. Federal employees have
generously supported Earth Share and its member agencies with
gross pledges from the CFC that have ranged from $5,358,337
in 1989 to $7,449,888 in 1993.

Earth Share also sponsors a public service advertising
campaign with The Advertising Council, which is a multi-year,
electronic and print media effort to encourage individuals to
take easy-to-do action steps to help protect our environment.
The advertisements are distributed to over 11,000 media
outlets twice each year, including all television and radio
stations, newspapers, magazines, and bus shelters. The
campaign currently receives over 40,000 caller responses each
year, and during the past year has received over $20 million
in donated media, placing it third among all national public
service campaigns in terms of donated media time and
placement.

Earth Share believes federal employees should be able to
continue to contribute to environmental and conservation
charities through the Combined Federal Campaign, along with
the other charities now present in the campaign. Federal
employees have demonstrated with their donations that they
support a variety of charitable issues, including medical
research, international relief and development, and social
justice and human rights, along with the environment and
conservation.

What separates these charities from traditional health
and welfare organizations are their varied approaches to
improving our world and the different constituencies they
serve. Modern workplaces are quite diverse, and many people

3


75

that there are 498,000 501(c)(3) charities out there that can some-
how overwhelm the system.

The way the CFC works is that there are two different categories
of organizations. There are national organizations, such as the
Legal Defense Fund, which establish national eligibility and then
participate in CFC’s across the country. But each local CFC can
then decide to let in local or regional organizations, and the vast
majority of the 498,000 501(c)\(3) organizations are such small local
charitable organizations, that get in at the local level. They will not
be in some vast national telephone book-sized list. As a matter of
fact, many of those organizations come in under local umbrella or-
ganizations such as the United Way.

So in the Washington, DC, or New York or San Francisco area,
you may have a large number of organizations on the list. You get
out to South Dakota, and you will have national organizations and
the relatively few local charitable organizations that qualify.

And, as the testimony has indicated, no Federal employee seems
to be bothered by having to go through a list and deciding to whom
they will give their money. The cost of printing that list, whether
it be 1 page or 300 pages, is borne by the charities that participate
in the local Combined Federal Campaign. It is not paid for by the
government.

The other thing I would just like to mention is this issue of level
of participation. It’s true that back in the 1960’s there was a higher
level of participation. It’s also true that at that time you did not
have in place regulations or controls on coercion of employees and
military personnel.

I come with a slightly different viewpoint than Captain
Hollenbach. I was an enlisted man back in the early 1960’s, and
our First Sergeant made it very clear that he would be an unhappy
First Sergeant if 100 percent of his men did not contribute. He
didn’t care how much. It could be $1. But as Privates we knew that
unhappy First Sergeants made for unhappy Privates. We all put in,
and there was 100 percent participation at about $1 a shot.

What has happened with the new regulations, that, hopefully,
control coercion, is that you have a smaller percentage of people
contributing, but they are all people who want to contribute. They
contribute larger amounts, and they now can give to whomever
they want to. And we suggest that is the way it should be, and we
hope that it will remain that way.

‘hank you.
[The prepared statement of Mr. Ralston follows:]


36

aseumption that taxpayers f0nd the CFC.

In truth, t yer monay is only used to Bey the dirett cost
of the administrative offices within OPM. This is only §750,000
per year. The other "cost" of the program the indirect costs
associated with federal keyworkerw volunteering to assist the
program by passing out information and collecting pledges. To
ask this Congrese to assume that this volunteer work coste the
federal taxpayer more than §55 million per year is to require us
swallow a number of inaccurate asgumptions. Most ludicrous of
these is the assumption that employees who act as keyworkers do
go at the expense of their other work -- that somehow the 8 hours
they spend on the CFC per year reduces the work they are doing
for the federal taxpayers. Thia may seem feasible on an
accountant's ledger but it does not happen in the real world.

Purthermore, we would not be saving any money if we
restricted the CFC, The direct administrative cost would
presumably be the same although there may @ reduced workload.

The indirect costs would also remain. @ keyworkers would etill
have the same responsibilities and demands.

Mr. Chairman, the Combined Federal Campaign works well. It
helps federal employees contribute to charities. It helps the
federal government limit tha charity campaigns in the federal
workforce, and it helps the charities. I hope this subcommittee
will not endanger this successful program, and open the door to a
number of lawsuits, to ay eo those who are upset bacause some
federal employees are giving to liberal organizations.



181

‘+ In Montana, TU is leading the Big Blackfoot River watershed restoration project.
This project will reduce and in some areas eliminate harmful polluted runoff that
‘would otherwise degrade this famous river, which author Norman Mclean wrote
about in his novella A River Runs Through It.

‘+ InNew York, TU has undertaken an extensive effort to evaluate the factors causing
degradation of the Beaverkill and Willowemoc, two famous trout rivers that are
considered collectively to be “The cradle of American fly fishing,” Thus evaluation
will allow TU to undertake efforts to clean up and restore the river, improving it for
fish and humans alike.

‘In Arizona, TU is leading the effort to restore the federally-listed threatened Apache
trout. Working with private landowners, state and federal agencies, and local
businesses, TU has reduced polluted runoff and restored riparian areas on the West
Fork of the Black River on the Apache-Sitgreaves National Forest, thus improving,
water quality and habitat for this species and humans.

‘TU chapters also do numerous conservation education projects that help children. An
excellent example of this is the annual TU/4-H Fisheries & Fishing Camp put on every
summer by the Northen Virginia Chapter of Trout Unlimited and the Northera Virginia
4-H Educational Center. Each year, children from around the state atend this weekend.
camp and are educated about the aquatic environment and are schooled in a variety of
useful outdoor and fishing skills. Many of these children, recruited by county extension
offices, are considered “youth at risk” because of unwholesome conditions at home and in
their community. Fishing and related skills are taught as a wholesome and fun
altemative to drug use. This clearly is another example of how TU benefits human health
and public welfare

HL, TU Is Not An Advocacy Group

‘Your proposal would eliminate most charities from the CFC because they are “advocacy”
groups. This is unnecessary because Internal Revenve Service (IRS) regulations already
restrict so-called “advocacy” groups. All charities must be (1) IRS approved; (2) cannot
engage in partisan political activity; (3) are restricted from using more than a sum portion
{approximately 15%) of their receipts for lobbying activities; and (4) must keep fund
raising costs below 25% of collections

‘TU does engage in some advocacy activities, but our expenditures on these activities
constitute only a small portion of our overall expenses, well within IRS requirements.
Further, our stream and salmonid restoration efforts would be undercut if we did not
participate in federal and state government decision-making processes - processes that
can have potentially huge impacts (positive or negative) on trout, salmon, their
watersheds, and the people that utilize these resources for commercial and recreational
benefit. To be true to our mission, participation (albeit limited) in government decision-
‘making processes is essential.


Fabrizio
—_=—
& Amoctates

a

ull
brizio
Ta

HT
‘al
Metat

FINAL VERSION
FABRIZIO, MCLAUGBLIN & ASSOCIATES
NATIONAL SURVEY OF FEDERAL EMPLOYEES
JUNE 2-5, 1995
10800 = +/- 3.5%

Introduction: Good evening. My name is and I'm calling from Fabrizio, McLaughlin
& Associates, a national public opinion firm. This evening we're conducting a very short survey
regarding your experiences and perceptions as a federal employee with the Combined Federal
Campaign or CFC. We would like to get your opinions. Your responses will be held in the
strictest of confidence and your identity will remain anonymous.

1, Are you currently employed by the Federal government?

1 Yes 100.0 2. No/A¥ other responses (Terminate)

Have you ever contributed to the Combined Federal Campaign?
1 Yes 928 2 No 70

3. DK Refused 0.3

3. Do you expect 10 contribute to the Combined Federal Campaign during the next year?
1 Yes 69.5 2 No 22.6

3. DK Refused 19

4. Overall, would you say you are satisfied with the way the Combined Federal Campaign is

run?
1. Yes, satisfied nS 2. No, aot satisfied 17.3
3. DK/Refused 3

Fabrizio, McLaughiin & Assoctates, Inc. - (703) 684-4510 FAX (703) 739-0664
‘801 North Fairfax Street - Suite 312+ Alexandria, Virginia 22314


ug

-6-
intimidation and coercion, the solicitors were supervisory personnel; and in still other instances
the solicitors were outsiders invited in, or otherwise present, in Federal workplaces.

‘These were not happy arrangements. Feelings were often bruised, and ill will resulted,
Charitable agencies could not understand why they were allowed to solicit in some Federal
establishments and not in others, nor did they appreciate the fact that some charities seemed to
have the support of Federal management while others were allowed, at most, to collect passively
by the placement of an unattended contribution jar in an obscure comer of a lunchroom.
Meanwhile, Federal employees were often made unhappy by repetitive solicitations that seemed
to abuse their philanthropy.

Informal, unregulated, and proliferating, such fundraising efforts finally received
Presidential attention during the Second Eisenhower Administration, when the President
attempted to impose order by issuing Executive Order No. 10728 (September 6, 1957) which
established the President's Committee on Fund-Raising Within the Federal Service. President
Eisenhower sought to continue the practice of allowing charitable solicitations in the Federal
workplace, but to minimize disruption of business and to impose uniform standards of
accessibility to the forum. His order called for a “uniform fundraising programTM* in which
“national voluntary health and welfare organizations"* would be allowed to participate in no

more than three annual solicitations'® held during time periods that would be specified by

* Executive Order No. 10728, § 1(a) (September 6, 1957).
* id. § 3d).
” 1d. § 10).


58

Testimony Submitted to House Civil Service Subcommittee 3
by Michael Howland, President, Independent Charities of America
‘on the Combined Federat Campaign

My experience convinces me that the taxpayer subsidy of the Combined Federal
Campaign is minimal, while generating stronger morale in the federal work force, positive
perceptions of federal employees and the federal government in the eyes of the public, greater
awareness of charities that often leads to volunteerism outside of the workplace by federal
employees, and developmental experiences for employees at all levels, in addition to the obvious
benefit of funding a plethora of causes that employees feel are worthy of their commitments of
personal after tax dollars. The indirect benefits of the CFC far exceed the indirect costs of
human manpower. My phone rang off the hook when San Francisco columnist Herb Coen
mentioned my involvement in the Combined Federal Campaign: every caller to a person
applauded the existence of the campaign, the example being set by federal employees and my
personal commitment to the effort. Learning about Independent Charities of America and the
Cystic Fibrosis Foundation though the campaign led me to use much of my annual leave to
volunteer on behalf of those organizations. In fact, federal employees, led by the Internal
Revenue Service’s San Francisco Deputy District Director James Casimir, founded Independent
Charities of America in 1988.

By way of illustration, the San Francisco District SBA office uses two employees to
coordinate the campaign for roughly 60 employees. One of the two may attend a half day
training session. The kick-off lasts 30-45 minutes. Some employees donate on the spot;
coordinators may spend two hours each collecting pledges from others. In the last district office
campaign I led, our average gift was $258, a tremendous return to society on a very modest
investment of employee time. As Chair of the San Francisco Bay Area Combined Federal
‘Campaign, I worked for 20 hours per week on the campaign at its peek, but I assure you that
it was in addition to, not in lieu of, my responsibilities of leading SBA. That is how I believe
all the Combined Federal Campaign leaders view their campaign commitments: it is an honor
to serve on the Campaign, but federal missions must be accomplished.

Research and trends in the Combined Federal Campaign and other workplace fund drives


204

Statement on behalf of the
American Heart Association

The American Heart Association (AHA), on behalf of its 3.7 million volunteers,
would {ike to take this opportunity to submit a statement to the Civil Service
subcommittee on the Combined Federal Campaign eligibility issue.

The AHA is dedicated to the reduction of disability and death from
cardiovascular diseases and stroke. Cardiovascular diseases take an enormous toll
both financially and emotionally on this nation. Cardiovascular deaths cause almost as
many deaths as all other causes of death combined, at an estimated cost in 1994 of
nearly $128 billion in medical expenses and lost productivity. To combat and prevent
more deaths from cardiovascular disease the AHA places an emphasis on
cardiovascular research, cardiovascular education and revenue generation. itis in
these areas that the AHA invests its resources. Over the years, AHA-funded research
has yielded many important discoveries, such as cardiopulmonary resuscitation (CPR),
life-extending drugs, bypass surgery, and other surgical techniques.

The American Heart Association is concemed over recent statements by
Chairman Mica relative to the Combined Federal Campaign, particularly the
correspondence to the Director of the Office of Personnel Management (OPM), James
B. King, urging him to exclude certain advocacy groups from participating in the
combined Federal Campaign. For more than 25 years, the CFC has been the primary
means through which employees of the federal government may contribute to private
voluntary organizations such as the AHA.

Congress has stated that advocating for legislative and regulatory actions is an
appropriate and legitimate activity for charitable organizations like the AHA, although

501(c)3 organizations play a decidedly limited advocacy role as a result of strict caps


138

-27-
expressive activity occurring on federal property.” 473 U.S. at 805. It would be perverse,
therefore, to mount a workplace charity drive in the name of minimizing ad hoc disruption only
to replace it with disruption that, albeit orderly, is pervasive, systematic, and therefore ever so
much more expensive to the taxpayers.

Disruption is avoidable, and with side-benefits. The same lowering of the volume in
campaign solicitation that diminishes the work-a-day diversion of Federal resources also reduces
the kind and number of opportunities for donor intimidation or coercion. What is more,
campaign solicitation events that are government-orchestrated or sponsored necessarily involve
favoritism. When employees are herded into a departmental auditorium to watch a CFC film,
for example, there is a necessary editing process that awaits them. {It is not possible for them
10 see 60 seconds of programming about every one of the 300, 600, 900, or 1,200 agencies that

ies will be

are listed in their local CFC brochures. One, two, five, or ten particular ch:
singled out and favored -- and probably on a recurring basis. This is actually subversive of
OPM's strict regulation of CFC brochures, in which words are numbered and position placement
carefully determined in efforts 10 ensure equality of access to the forum,

It is legitimate for the Government 10 assist charities in soliciting and receiving
contributions for the purposes laid out by President Reagan in Executive Order No. 12404.
Some charities are more valuable than others to the Government precisely because they lessen
the Government's burdens. But within the framework of those purposes it behooves the
Government to maintain a posture of neutrality and evenhandedness. This is fair not only to the
participating charities but 10 donors and taxpayers as well, who rightly wish to insulate

themselves, in the context of voluntary philanthropy, from the support of programs to which


49

Do you feel Congress should limit the types of charities that you can support in the
Combined Federal Campaign?

L Yes, limit 248 2 No, not limit 66.3

3. DK/Refused 9.0

the types of charities that could receive your donations were significantly reduced,
would you be more likely or less likely to contribute to the Combined Federal Campaign in
the future?

1. More likely 28.9 2. Less likely 38.5
3. Not sure (Vohunteered) 20.8 4. DK Refused ite)
Do you approve or disapprove of continuing to allow Federal employees the right to

voluntarily make charitable contributions through workplace giving to the charities of their
choice? (PROBE: Strongly approve/disapprove, Somewhat approve/disapprove)

1. Strongly approve 786 2. Somewhat approve 14.4
3. Somewhat disapprove 26 4, Strongly disapprove 2.8
3. DK/Refused 19

TOTAL APPROVE 93.0 TOTAL DISAPPROVE 5.1

Do you believe that federal employees should be able to choose to support - through the
‘Combined Federal Campaign - charities that speak out on behalf of the people they help?

1 Yes 88.0 2. No 48

3. Dik/Refused 73




18

hospital facilities. Apart from their litigation activities, each plaintiff also
provides “direct services’ through scholarship programs and education
efforts?

The government did not appeal this decision, and, indeed, enacted new regulations
that opened up the CFC to legal defense funds and other organizations. However, eatly
in 1983, a new executive order and regulations were promulgated that excluded
‘organizations that sought to mfluence the “determination of public policy” through “political
activity or advocacy, lobbying, or litigation on behalf of parties other than themselves.*
This provision was interpreted to bar organizations such as the NAACP Lega! Defense
Fund from further participation.

We brought new litigation, this time joined by a number of other organizations.
‘Once again, the District Court held the segulations unconstitutional, and its decision was
affirmed by the Court of Appeals for the District of Columbia Circuit.” The government
obtained review by the Supreme Court, however, and, in # 4-3 decision, the Supreme Court
reversed. This was not the end of the litigation, however. The Court's decision was,
basically, that on the record before it the regulations were not unconstitutional om their
face. The case was remanded for further proceedings to give the plaintiffs the opportunity
to demonstrate that the actual reason for their exclusion was opposition to the viewpoints
of their programs. On remand, the district court issued a preliminary injunction that would
keep the plaintiffs in the CFC while there was a full trial on the merits. The government
appealed, but the appeal was mooted out because of Congressional action that prohibited
the enforcement of the regulations at issue, The regulations were subsequently modified,
and the Legal Defense Fund has participated in the CFC continuously since 1981.

uL
‘Tue NAACP LEGAL DEFENSE FUND PROVIDES DIRECT BENEFITS
IN THE AREA OF HUMAN WELFARE TO PEOPLE IN NEED.

‘As noted above, the basis for the Legal Defense Fund's originally exclusion was that

*NAACP Legal Defense and Educational Fund, Inc. v. Campbell, 504 F. Supp. 1365, 1368
(DDC 1981),

°NAACP Legal Defense and Educational Fund, Inc. v. Devine, 567 F. Supp. 401 (D.D.C.
1983), aff, 727 F.2d 1247 (D.C. Cir. 1984),

‘Comelius v. NAACP Legal Defense and Educational Fund, Inc., 473 USS. 788 (1985).
Justice Marshall recused himself because of his prior directorship of the Legal Defense
Fund. Justice Powell was ill, and so did not participate. The participation of either or both
justices could have changed the result of the decision. See Perry Ed. Assn. v. Perry Local
Ed. Assn, 460 US. 37 (1983), in which Justices Marshall and Powell dissented,

3


88

Mr. RALSTON. No. We publish it in our annual report every year.

Mr. O'’STEEN. No.

Mr. HOWLAND. Not at all.

Mr. Mica. We've had trouble getting the information at this sub-
committee. I don’t mean that any of the groups testifying today
have been part of that problem.

Mr. RALSTON. The problem, again, I think comes from this—
comes from local CFC’s, and so it is very difficult——

Mr. Mica. To compute the total?

Mr. RALSTON [continuing]. To compute the total.

Mr. Mica. The other thing is, we have had testimony this morn-
ing that makes me think OPM views this as something they wish
would go away—any controversy about changing eligibility. By the
same token, it appears that we could have in the neighborhood of
hundreds of thousands more organizations join the ranks that are
already swelled.

In this volume, there are 489,000-some-odd number of 501(c)(3)’s,
and a large portion of those would currently be eligible. Is there
any way or need to limit these or change the criteria you might use
in Timing future participation? Any of the panelists? Mr. Sodo.

Mr. Sopo. I think the first place I would like to suggest looking,
Congressman, is to what the potential universe is. Since 1987——

Mr. Mica. 489,000. In fact, sitting in that same chair was the
Deputy Director who said that we might be, in fact, publishing a
catalog the size of the Washington telephone directory before she
is through.

Mr. Sopo. If I could, I’d suggest that, if in fact there was that
real possibility, those folks would already be in. This campaign has
published these regulations and has had them on the record since
late 7.

I think if you look at rate of growth in terms of charities in the
CFC, it has dropped significantly in the last few years. So I think
what it’s told me—I’ve had that same question myself. Where are
we capping this? And I think we’re near that point, honestly.

Mr. O’STEEN. If I might comment, sir, as a charity that had to
work to show that we do provide a human health and welfare serv-
ice it’s not particularly easy to get into CFC. You really have to
demonstrate this. It’s more than just being a 501(c)(3). I think the
marketplace begins to play a role.

For a charity that’s not likely to receive significant contributions,
the effort is simply not worth it. There are a lot of people out there
that want to support the NRL Educational Trust Fund. We do
about a half million a year. But I think for a high number of
501(c)(3)’s which may be strictly local or have a more narrow mis-
sion, many of them wouldn’t experience that kind of support, and
it really wouldn’t be worth their effort to meet the eligibility re-
quirements and go through the process of applying which isn’t
easy.

So I agree with Mr. Sodo. You probably are coming near this
being capped, really.

Mr. Mica. OK. So we have no objections from the panel partici-
pants to publish amounts or make that information available. No
one is really decided on whether or not there should be any addi-
tional contribution from the participants, and we don’t have any


43

organization has engaged in an improper amount of "advocacy", and
to deal with the inevitably large number of appeals to stay in the
campaign from threatened charities.

Currently, there is a great emphasis among the public and
within Congress on reducing the cost and size of government and

reducing the degree of government interference in the economic
lives of individuals.

In this context, it is not logical to increase government’s
regulation of, and cost associated with, the CFC in order to
severely restrict the ability of the individual federal employee to
give his or her own contribution, through workplace giving, to the

organization he or she wishes, for the purpose he or she feels is
most important.

The Combined Federal Campaign is currently functioning very
well, ‘and we respectfully request that you to reject the proposed
change in criteria for participation.


129

-18-
Meanwhile, mail from Federal workers and Federal employee unions and organizations was
overwhelmingly in favor of a reversal of course. The CFC was, in their view, turning into a
spectacle that mocked the meaning of charity and ran the risk of making institutional greed so
visible that the attitude of donors would be soured toward all philanthropies. That sentiment was
captured in mid-January 1983 by one particularly memorable cartoon in The Washington
Times.

We in the Reagan Administration did, indeed, spend the fall of 1982 and the winter of
1983 in rethinking the CFC, a process of discussion and consultation that culminated in a
Cabinet meeting at the White House presided over by President Reagan on February 2, 1983.
On that day, after a lengthy and particularly lively debate, the President directed OPM to change
the CFC in its fundamentals, President Reagan decided to refocus the CFC narrowly on
alleviating the burdens of government in combatting threats to human health and welfare. Eight
days Jater, on February 10, 1983, President Reagan issued Executive Order No. 12404.

The 1983 Executive Order entirely changed the nature of the CFC, guiding the

s

establishment of CFC eligibility criteria by “the following principles and policie

(1) The objectives of the Combined Federal Campaign are to lessen the burdens of
government and of local communities in meeting needs of human health and welfare;
to provide a convenient channel through which Federal public servants may contribute
to these efforts; to minimize or eliminate disruption of the Federal workplace and costs
to Federal taxpayers that such fund-raising may entail; and to avoid the reality and
appearance of the use of Federal resources in aid of fund-raising for political activity or
advocacy of public policy, lobbying, or philanthropy of any kind that does not directly

3 See Appendix, Exhibit 20.

3 A copy of the full text of Executive Order No. 12404, 48 FEDERAL
REGISTER 6685 (February 10, 1983), is set forth at the Appendix, Exhibit 21

Executive Order No. 12404, § 1(b)


@

@

@)

(4)

113

-2-
It raises large amounts of money and is therefore too tempting for fundraisers and
charitable groups, particularly those not already benefiting from its largesse, to
ignore?

Large amounts of the money that it raises are, or appear to be, given by donors
who fail to specify who shalt receive them, leaving it to others to allocate the
funds?

‘Whether or not a participating organization succeeds in

ing money through the
CEC, the process of solicitation accords it a means of broadcasting a message to
the Federal workforce, a large and influential population, and to do so with the
apparent imprimatur of the United States Government,

Administration of the CFC, involving the assignment of numerous loaned
executives, the staging of myriad promotional events, the production and

distribution of campaign materials, the devotion of hundreds of thousands of

2 In 1991 the CFC produced a total of $204,384,007 in charitable
contributions; in 1992 the total was $198,831,189; and in 1993, the most recent
year for which data were available 10 me, the total was $196,826,303. A
downward trendline will be noted, with 4,692,797 employees solicited in 1991
and 2,484,655 contributing: 4,458,117 solicited in 1992 and 2,190,150
contributing; and 4,193,355 solicited in 1993 and 2,009,753 contributing. A
merely shrinking Federal workforce (civilian and military) will not account for
this trend, for, perhaps more significantly, participation rates are steadily
declining, too: It was $2.94% in 1991, 49.12% in 1992, and 47.92% in 1993.
Source of data: OPM, March 31, 1995. None of this can be blamed on Ronald
Reagan, by the way: In the peak year of the "Reagan controversy", 1982, the
CFC participation rate was 63.2%.

Of all the CFC funds raised in 1991, $19,138,314 were undesignated; in
1992 the undesignated total was 14,959,599; and in 1993 it was 13,337,298, A
message is getting through. Source of dara: OPM, March 31, 1995.


122

“ue
otganizations are therefore excluded.”
It proposed, instead, a simple, straightforward standard:
We urge that all organizations so recognized {as valid, non-profit, tax-exempt, and
charitable] by the Internal Revenue Service be able to be included in the CFC, and that
federal employees be able to designate any such organization to receive their
contributions. ”*
‘That standard was rejected by the Office of Personne! Management, apparently on the ground
of impossibility of administration. The total number of organizations that are recognized by the
Internal Revenue Service as tax-exempt charities is huge. It would be impossible to list them
all in a single campaign brochure or pledge card. It would cause monumental headaches in
payroll offices throughout the Government to allow employees to write-in the name of any tax-
‘exempt charity in America (a local church? a Boy Scout troop? one’s old elementary school,
a thousand miles away in one’s old hometown?) on a payroll deduction form and then make sure
that the beneficiary's name was correct, track down ils address, and figure out how to forward
the money. The Government's costs of processing a contribution could easily exceed its value,
‘The LDF did not get the macroscopic change it favored and it was excluded from the 1980
fundraising drive.
So the LDF sued. Joined by the Puerto Rican Legal Defense and Education Fund, Inc.,
it challenged as unconstitutionally vague the “direct services” requirement of the Carter
Administration's Manual. On January 19, 1981, the eve of President Reagan's first

inauguration, Judge Gerhard Gesell of the United States District Court for the District of

* id, a2.
* Ibid.




127

-16-
in the Appendix a representative sampling of the attention that the 1982-1983 CFC received in
the news media.” The well-publicized threat of the National Association of Letter Carriers to
boycott the CFC“ was only one such instance; another, the announcement by the Hawaii
Federal Employees Metal Trades Council that it, too, would boycott the CFC led Hawaii's entire
congressional delegation to write to the president of the union to urge reconsideration.

At the height of the controversy Director Devine received 2 curious letter from Abner
J. Mikva, then sitting as a judge of the United States Court of Appeals for the District of
Columbia Circuit, who seemed to believe that OPM was excluding organizations from the
CFC." Uncertain of how to reply to what he regarded as an instance of judicial lobbying of
the executive, Director Devine referred Judge Mikva’s letier to me for reply. 1 wrote back to
Judge Mikva at length, explaining what we were trying to accomplish and why.”

‘The controversy was real. As the news clippings make clear, Federal employees across
the country were awakening to the prospect that their charity contributions might end up in the
coffers of organizations that they found objectionable. Anger surfaced on the left and the right,
Director Devine's response was a clear, consistent educational campaign intended to emphasize

that donor designations would be strictly honored.” All that a CFC contributor had to do to

“See Appendix, Exhibits 9, 10, 11, 12, and 13.
“See Appendix, Exhibit 13.

See Appendix, Exhibit 14.

“ See Appendix, Exhibit 15.

© ‘See Appendix, Exhibit 16.

‘See, e.g., Appendix, Exhibit 17.


151

ee Burrus. I really wouldn’t have a comment on that. I don’t
ow.

Mr. Mica. Mr. Morris.

Mr. Morris. Mr. Chairman, if the purpose of the campaign is to
provide support for human health and welfare agencies meeting
needs of hungry, hurt, sick, destitute people, people who have been
devastated by natural disasters and the like, in other words, a tra-
ditional charity campaign, then it’s a legitimate, appro riate exer-
cise of governmental function, it helps lessen the burdens of gov-
ernment and it’s a good investment.

If, however, this is simply a free-for-all, it’s an open channel for
any 501(c(3) organization to come in to the largest captive
workforce in America and have access to that workforce and obtain
contributions from it, then under those circumstances there is no
necessary connection at all between the interests of the taxpayers,
their burdens are not being lessened by this. If there is no connec-
tion at all, then I see no reason why user fees proportionate to ben-
efits should not be imposed to carry the entire cost.

Mr. Mica. Mr. Barrett? Any comment?

Mr. BaRRETT. The charities do pay the certain percentage of the
administrative expenses.

Mr. Mica. They do.

Mr. BaRRETT. As far as the other one, no, I have really no other
thought on that.

Mr. Devine. I think Mr. Morris’ point is very valid. If they are
legitimate health and welfare charities, I think a good argument
can be made that the benefits outweigh the costs. Where it is a
free, open rein to any group that wants to apply, then I think they
should bear the cost.

Td also like to make one point. Take the OPM estimate of $21.2
million cost. It’s also important to add the 7-percent local adminis-
trative costs that were just mentioned, or $14 million. The actual
overhead that is admitted now to be $35.2 million, simply what’s
already admitted on the record. Then add the back-end costs of the
payroll and you will be darned close to that $50 million that was
in he earlier estimate, although they weren’t counting that then
either.

One of the points of establishing these—local principal funds is
what we originally called them—was so they would account for
what was going on in each local campaign, which they did not do
previously. I haven’t followed the administration, but your desire
to get that information is legitimate because these institutions
were specifically set up so that they could do that administrative
work. They ought to do it to get a 7-percent fee.

Mr. Mica. Well, that does amplify one of the points that I have
been trying to make here about government should at least have
some idea of where the money is going and the amount of money
these organizations are receiving and administrative costs, et
cetera.

You said, I think, Dr. Devine, in your testimony also that based
on some of the percentages of costs, now they cited 11 percent and
it would be much higher under the 88 estimates or your guess-
timates, you could be up in the 25 percent range of cost. Is that
acceptable under standards for charitable administration? You said


155

Concerns have been raised that some of the charities in the
CFC are counter to the philosophy of some taxpayers. Opponents
argue that only organizations that do not advocate particular
positions should be included.

However, this argument is based on the false assumption that
taxpayers in some way fund the CFC. Beyond the time that Federal
employees spend collecting pledges, there is no direct
contribution of Federal funds.

I understand that CFC traces its roots to another Republican
President, Dwight Eisenhower, who first signed an executive order
instituting an annual charitable campaign for all Federal
workers.

In a letter to the Chairman, OPM Director King states that
the cost of running the CFC would be no greater or smaller if
more organizations were added to or dropped from the CFC. The
same amount of time is involved with passing out the information
and collecting the pledges. Let me underscore that the money
donated to the CFC comes from Federal employees’ own funds.
There is no Federal contribution to any of the charities and the
cost of producing annual campaign materials is paid for by
participating charities.

While the government may fund some programs of organizations
within the CFC, those grants or other funds are separate and
distinct from CFC contributions.

I am aware of no outcry against the charities which
participate in the CFc from either Federal or private sector
employees contributing to the CFC and the United Way campaigns.
I£ someone does see an organization on the list with which they
disagree or which they do not view as a priority for
contributions, they can simply choose another charity to
designate for their gift.

Any attempt to restrict CFC membership would appear to be an
attempt to "defund" the charitable advocacy groups which
currently participate in the CFC. Throwing these organizations
out of the CFC could violate the Supreme Court decision in
Cornelius vs. NAACP Legal Defense Fund, 473 U.S. 788, 811 (1987)
which stated that restricting workplace giving in order to
suppress a particular point of view is unconstitutional.

Today the Committee will hear arguments that, regardless of
what restrictions are placed on CFC participation, Federal
employees can still mail a contribution to any charity that they
wish to support. While true, this does not reflect the ease of
making a small payroll deduction each week versus a larger one-
time check. Overall giving is no doubt higher because employees
can, for example, donate $10 per pay period as opposed to writing
a $260 check.


CONTENTS

Hearing held on June 7, 1995
Statement of:

Devine, Donald J., former Director, Office of Personnel Management;
Jeremiah J. Barrett, former Director of CFC Operations; Joseph A.
Morris, former General Counsel, Office of Personnel Management; and
Ronald C. Burrus, executive director, NVHA San Diego County Com-
mittee .

Green, Lorraine sputy fanagement,
accompanied bs Gerri Mason ‘all, "Gounsel, De uty uty Director's Office
O'’Steen, David N., executive director, National ‘Hehe to Life Committee;

Michael R. Howland, president, Independent Charities oe America; Don
Sodo, executive director, America’s Charities, James W. Hollenbach,
Christian Service Organizations of America; and Charles Stephen Ral-
ston, senior staff attorney, NAACP Legal Defense Fund
Letters, statements, etc., submitted for the record ws
Barrett, Jeremiah J., former Director of CFC Operations, prepared state-
ment of ..
Burrus, Ronald C., executive director, NVHA San Diego County Commit-
tee, prepared statement of .
Dowlut, Robert, secretary, Firearms Civil Rights Legal Defense Fund,
prepared statement of .,
Green, Lorraine A., Deputy Director, Office of Personnel Management,
prepared statement o
Hollenbach, James W.
pared statement of
Howland, Michael R., p: depe
Information concernin, ng poll of 800 Federal employees
Prepared statement of
Hoyer, Hon. Steny H., a Rep
of Maryland, prepared statement of ..
Moran, Hon. James P., a Representative in Congress from the State
of Virginia, prepared statement of ...
Morella, Hon. Constance A., a Representative in Congress from the State
Maryland, prepared statement of ..
Mone joseph A., former General Counsel, Office of Personnel Manage-
ment, prepared statement of .
O'Steen, David N., executive director, National Right to Life Committee,
prepared statement of ..
Ralston, Charles ‘Stephen, senior staff attorney, NAACP Legal Defense
Fund, prepared statement of
Sodo, Don, executive director, America’s Charities, prepared statement

ay

37

103
143
91
10
70

52
154
35
23
112
40
76


145

SDCE Lestnneaty «Kot Huts
Presented > Conumittce on Goveruncnt Reforms and Oversight
‘Sub-Comnminee on Civil Service

Page 3

Jane 7, 1995

We support the continuation of federal employees running the CFC campaigns by serving as loaned
executives, key workers and group coordinators and maintaining the current policy that only federal employees
can solicit other federal employees for charitable purposes. This helps to separate the combined federal
‘campaign from other annual charitable drives,

oo NVMA | TOTAL CAMPAIGN
‘$1,047,375 $5,773,736
$1,203,482 $6,019,266
$ 1,365,500 $7,032,489
$1,526,450 $7,075,460
‘$1,686,531 $6,679,017

San Diego CFC dollars have decreased each year beginning with the 1992 campaign. This decrease can
be directly attributed to the loss of potential donors due to downsizing and base closures. Decreases in San
Diego NVHA designations during 1990 - 1994 are also due, in part, to the loss of potential federal donors
in the area. However, itis also apparent that the inordinate increases in organizations that have been deemed
eligible to participate have also impacted on donations to these traditional charities.

We applaud Congressman Mica’s notion of “restoring the CFC's pre - 1980s. status as a vehicle for
solicitations by traditional charities providing direct benefits to human health and welfare.”

‘Again, we would like to commend your interest and hope that the sea of charities certified to participate in the
CEC can be restored to its rightful intent,


106

Mr. Mica. Thank you, Mr. Barrett. We will now call on our next
witness, Mr. Joseph A. Morris, former General Counsel of the Of-
fice of Personnel Management.

Welcome, and you are recognized.

Mr. Morris. Thank you, Mr. Chairman. I also would like to com-
mend you and the subcommittee for taking up this issue. It is an
important one as the contentiousness that surrounds it may sug-
gest.

If I might take a peculiar moment of personal privilege here,
there is a ge tleman sitting behind us here, a civil servant, James
S. Green. Mr. Green was Principal Assistant to the General Coun-
sel of OPM under President Carter. He was Principal Assistant to
the General Counsel under President Reagan. He was Principal As-
sistant to the General Counsel of OPM under President Bush. He
was Principal Assistant to the General Counsel of OPM now under
President Clinton.

I have no idea what Mr. Green’s personal views are regarding
the Combined Federal Campaign or questions of eligibility in it,
but I do know, however, that for two decades Jim Green has been
giving solid legal advice to a succession of General Counsels in ad-
ministrations that have had significantly differing points of view
about what the Combined Federal Campaign ought to be and how
it ought to be run.

As a lawyer, professional to professional, I would like to take this
public opportunity to commend Jim Green on behalf of my prede-
cessor, my successors and myself for that good work he has done
for_us.

The fact, Mr. Chairman, that lawyers have their hands so deeply
in the business of the Combined Federal Campaign is one of the
most telling things about it. It is a peculiar thing that here is a
charity drive and here sitting to my right is the fellow who was the
principal operations officer of a charity drive who ran a govern-
mentwide charity drive out of a law office for years because of the
contentiousness that has surrounded the Combined Federal Cam-
paign, because this is no charity drive, Mr. Chairman.

What this has become is a mechanism, a machinery, a funnel for
channeling money in the least extensive, most efficient way pos-
sible to political, legal and other advocacy organizations. That is
what this fight is about. That is what it has been about for two
decades.

You have before you this morning a witness representing the or-
ganization that more than any other is responsible for this fun-

lamental change in the character of the CFC. For good or for ill,
it is the NAACP Legal Defense and Educational Fund which made
it its project in the late 1970's, early 1980’s, under President
Carter, and resisted by the Carter administration, to punch a hole
in the wall that President Eisenhower, President Kennedy, Presi-
dent Carter and President Reagan attempted to draw that limited
participation in the CFC to genuine traditional human health and
welfare services that delivered services directly to needy people.

For good or for ill, the NAACP Legal Defense and Education
Fund has gotten its way over the course of the last decade-and-a-
half to the point that the hole it punched in 1980 in a decision that
was handed down the night before Ronald Reagan was sworn in as


66

TOTAL CFC PLEDGES TO AMERICA’S CHARITIES

1990-94
campaign ‘Total ledges
1990 $13,234,374
1991 13,092,427
1992 12,682,705
1993 14,602,953
1994 9,000,000 est.)
Note: ‘The pledge amount received varies depending on the

number of members in America’s Charities, the number of charities
participating in the overall CFC, total giving in the CFC, and
federation listing in the campaign materials


52

Testimony Submitted to House Civil Service Subcommittee 2
‘by Michael Howland, President, Independent Charities of America
‘on the Combined Federal Campaigo

‘Thank you, Mr. Chairman and distinguished subcommittee members for the opportunity
to testify on the Combined Federal Campaign.

While I am here today as the full time President of Independent Charities of America,
an umbrella organization consisting of 12 federations representing 416 agencies approved by the
U.S. Office of Personnel Management (OPM) for the fall 1995 Combined Federal Campaign,
T have also participated in the Combined Federal Campaign in many capacities: donor; Director
of U.S, Small Business Administration (SBA) offices that held campaigns; chair of the record
breaking 1987 San Francisco Bay Area Combined Federal Campaign; chair of the 1990 San
Francisco Bay Area Federal Executive Board that acts as the Local Federal Coordinating
Committee (LFCC) for the Combined Federal Campaign and as a member of that Board for 5
years; and as a volunteer leader of the United Way of the Bay Area, the Cystic Fibrosis

Foundation and Independent Charities of America, all of which parti te in the campaign. I
also testified before OPM’s Blue Ribbon Task Force on the Combined Federal Campaign in San
Francisco.

The Combined Federal Campaign should continue to serve the dual purposes it serves
so well: (1) Offer federal employees the opportunity to give to eligible charities with the current
penultimate freedom of choice, efficiency and effectiveness that have made the Combined
Federal Campaign a model for workplace campaigns not oniy in the public sector, but the
private sector as well. In fact, even the once exclusive United Way campaigns in San Francisco
and Washington D.C. have moved to inclusive CFC-style campaigns; not surprisingly, the
expanded choice has yielded stronger campaign resuits; and (2) Provide participating charitable
organizations the opportunity to solicit funds for their respective missions in the least obtrusive,
east costly means of fundraising possible. This is especially critical for many of our agencies

_. in an era in which the federal government programs that helped to fund many of them are being
eliminated or reduced dramaticaily.


178

protect water supplies, counsel community citizens' groups,
provide information and support in situations of
environmental crisis, and arrange for the acquisition and
protection of land and wildlife for use and enjoyment by all
citizens.

Earth Share member agencies organize citizens' groups to
initiate recycling programs, and help businesses maintain
environmentally sound operations. They educate the public
through publications and hands-on training sessions about how
we can make our lives better, and healthier, by protecting
our natural resources.

he public has benefitted from our member agencies’
programs and services for many years. Children are widely
protected from asbestos poisoning, and from hazardous PCB
contamination, thanks to the work of our member agencies.
Residents enjoy the National Parks, wilderness areas and open
spaces across the country because of the help of our member
agencies. The air and water that surrounds residents is
protected by federal, state and local policies that Earth
Share member agencies helped achieve through their
educational efforts.

In summary, environmental and conservation charities
provide important health and human services -- in fact, there
is little more vital to our health, not to mention our
general well-being, than a healthy environment. Federal
employees have recognized and supported the crucial health
and human services provided to the public by environmental
and conservation charities by supporting Earth Share and its
members in the CFC. Federal employees benefit from our member
agencies' work. They deserve the opportunity to continue to
show their support through the CFC for the benefits they
receive every day.


101

Obviously, no one can support all of these groups, their goals.
You would have to object to one or the other being in. But they
have all been there, and the impact has not been that adverse.

I would like to recall one particular thing about coercion. You
were talking about there when they had 80 percent participation.
Back in the 1960’s, at Randolph Air Force base in San Antonio, the
then commanding general would line up and start the campaign,
all the flags of all the commanders under him on the right side of
the drive. And as they made their goal they moved to the left side
of the drive so every morning as he drove in he could see what was
happening. That was the end of coercion where we had 80 percent
participation.

Once we passed regulations—once the regulations were changed
to try and avoid coercion, the participation rate did drop.

In addition to the participation of groups that I might find objec-
tionable, Directors of the Office of Personnel Management and local
campaign officials have, through their own eligibility decisions, re-
defined human health and welfare organizations as far as the CFC
is concerned.

An amazing variety of organizations providing numerous and
varied services have been found eligible. The introduction of these
different voluntary agencies has caused the campaign to grow, but
based on receipts has not caused an adverse effect on CFC. Except
in the 1 year that Dr. Devine mentioned, all years after that the
campaign did grow in total receipts. Participation did go down. It
was individual gifts that were rising.

The CFC regulations and IRS regulations allow ineligible organi-
zations to create fronts that are eligible for charitable donations
which in turn they funnel to their parent groups. This happened
a few years ago. One particular national organization lost its IRS
501(c)\(3) status because it had participated in a partisan campaign.

There were 2 years of funds still to be distributed to the group.
The Department of Justice advised OPM to arrange for the funds
to be distributed to a charity that was providing similar services.
The ineligible group formed a legal defense and education fund to
receive the outstanding funds and these were given to the parent
group. This new group still participates in the CFC today.

As you requested, I would like to share my view of what is the
central purpose of the CFC. The CFC is the vehicle that gives Fed-
eral employees the opportunity to make donations to charitable or-
ganizations of their choice. It is not to keep a specific charity alive
or to have the government decide what are appropriate organiza-
tions for employees to give their gifts.

This leads me to conclude that the CFC as presently established
should be abolished. First, the CFC is very costly. A few years ago
when we calculated—this was the one of $50 million_—we made cer-
tain assumptions that came up with that figure. This was to raise
$200 million. That sort of percentage of administrative fundraising
expenses would bar most arities from participation in CFC.

ond, the CFC is a very small, insignificant part of charitable
support in the United States. As a Nation, Americans are incred-
ibly generous in their charitable giving. The $200 million that is
raised in CFC is not even 1 percent of the total charitable dollars
raised annually.


26

costs of adding new organizations are marginal. We have
not seen any detailed costing of these claims by OPM, but |
would assume Deputy Director Green, who is here today, will
provide this information.

The restricting of CFC eligibility also raises another issue
that troubles me. It presupposes that Federal workers cannot
{and should not) make their own decisions in selecting
charitable organizations. As you know, | have immense
respect for Federal workers. I’ve seen the faces of those who
give to CFC. I’ve shared their pride in receiving Eagle awards
for contributions of one percent of their salaries. These are
uplifting experiences. And even with all that has happened
to Federal workers and all that is proposed to happen to
them, Federal workers remain the most giving, the most
resilient, and the most professional workers in the country.
And, | do not want their freedom of choice limited in this
respect.

In addition to denying the rights of Federal workers to
give to the organizations of their choice, modifications to

program eligibility could exclude hundreds of organizations


22

So I know that the proposal is well-intentioned. I know we are
going to learn a great deal from it.

I would also point out that when Ms. Green said—or her col-
league mentioned—that there are very few GS-15s, that is, in fact,
true. And so I would certainly say that the GS-9 level, in trying
to figure out whether or not it’s $22 million, 11 percent, or whether
it is 25 percent, is indeed something that could be verified.

So as an opening statement, I think you know my direction, but
1 am open-minded in terms of the issue at stake here.

(The prepared statement of Hon. Constance A. Morella follows:]


105

Fourth, deciding eligibility of organizations by the Government
gives the false impression that they are approved by the
Government. this is not the case but the Government still can be

held up to ridicule for permitting a suspect organization to
participate.

I recommend that the Congress encourage the Government to permit
employees to establish a charitable allotment during a specific
period of time each year without the CFC operational details. The
allotment would be the same as the one used to pay off a car loan
or other recurring payment that employees have.

This would remove the Government from the costly eligibility and
appeal process and the possibility of potential legal claims.

It would allow the donor to continue support for an organization as
long as he or she wished. An allotment such as this would require
the employee to change or cancel it.

It would encourage the recipient charities to develop and maintain
their relationships with their Federal donors.

It would treat employees as responsible adults who can make these

decision without the approval of a paternalistic bureaucratic
overseer.

It would inhibit, if not stop, cases where employees have used
their designation to pay tuition to private schools or to day care
centers. The charity would receive with each check, a statement to
the effect that this is a tax deductible gift for which the donor
should receive no benefit.

1 appreciate the opportunity to present my views and I am available
to answer any questions.


162

(plurality opinion), 832-833 (dissenting opinion of Justices
Blackmun and Brennan); 833-36 (dissenting opinion of Justice
Stevens). As Justices Blackmun and Brennan noted, exclusion of
organizations that employ ‘advocacy or litigation is inherently
viewpoint discrimination: -

By devoting its resources to a particular activity, a
charity expresses a view about the manner in which
charitable goals can best be achieved. Charities
working toward the same broad goal, such as "improved
health," may have a variety of views about the path to
that goal. Some of the "health services" charities
participating in the 1982 National Capital Area CFC,
for example, obviously believe that they can best
achieve "improved health care" through medical
research; others obviously believe that their resources
are better spent on public education; others focus
their energies on detection programs; and still others
believe that the goal is best achieved through’ direct
care for the sick. [Some groups] concerned with the
goal of improved health, on the other hand, obviously
think that the best way to achieve that goal is by
changing social policy, creating new rights for various
groups in society, or enforcing existing rights through
litigation, lobbying, and political activism.

As Justices Blackmun and Brennan noted, to exclude groups
based on their belief that advocacy or litigation is a valid
means to achieve charitable goals is “blatantly” viewpoint
discrimination. To do so would explicitly favor charities that
believe charitable goals may best be achieved through working
within the confines of existing social policy and the status quo,
at the expense of other charities that hold equally sincere views
that the public interest may best be served through seeking
social change. The federal government has no business, and no
right under the Constitution, to make that choice for its
workers. :

Cc. Burt ility Restrictions jon-S.
Ne

Reducing the number of participating organizations --
whether based on advocacy-related criteria or otherwise -~ is
simply unnecessary. We are not aware of any significant number
of complaints from federal employees regarding the current CFC.
As described above, 71.5% of federal employees are satisfied with
the current cFc.‘ In fact, total giving increased 137% (from
$82.8 million to $196.8 million): from 1979 to 1993. OPM
testified that "federal employees have been well served by [the

“3a.


165

campaign costs due to increased paperwork, controversy, and
general inefficiency requiring more OPM staff time.

Whereas direct and indirect* costs of the CFC will not
decrease (and may increase) if the number of participating
agencies is reduced, the indirect benefits of the campaign could
be greatly reduced by a change in the eligibility requirements.
The indirect benefits include a positive impact on productivity
and pride among federal employees."°. These positive attributes
could be diminished if changes to the CFC limit employee choices
and thus result in a campaign that is controversial and does not
share the support of the majority of federal employees.

Iv. conclusion

The Legal Defense Fund strongly recommends that Congress not
attempt to politically micromanage the CFC -~ a program that is
effectively and efficiently enabling federal employees to
contribute to the health and welfare charities of their choice
through a payroll deduction program.

’ ‘The indirect costs of the CFC constitute the value of time
voluntarily donated by federal employees to the campaign.

we Ide


169

WRITTEN TESTIMONY OF
EARTH SHARE
3400 INTERNATIONAL DRIVE NW
SUITE 2K
WASHINGTON DC 20008

The purpose of this document is to submit written
testimony by Earth Share to the Congress of the United
States, House of Representatives Committee on Government
Reform and Oversight, Subcommittee on Civil Service's June
1995 hearings on the Combined Federal Campaign (CFC).

Earth Share believes that the current laws and
regulations which govern the CFC are working well and should
not be altered, with the exception of the continued
development of regulations which help make the campaign more
efficient. The lack of litigation over the last several years
is a testament to the sound approach the CFC has developed,
and we are certain that any major change now in the
eligibility of charities would have the effect of critically
impairing the CFC's ability to raise funds for all its
participating charities, including traditional health and
human service charities.

The CFC was never intended to support any specific
charity or cause. The purpose of the CFC has always been to
make it easy for federal employees to give to charities in a
manner which is both efficient and fair. No one person would
ever support all the charities which are now eligible to
participate in the CFC, but the CFC helps makes people more
charitable by offering a wide variety of charitable choices
which meet objective standards.

Consequently, the CFC is a classic example of how a free
market can efficiently and capably allocate scare resources,
and it recognizes both the inherent wisdom and generosity of
individual federal employees. The CFC has established a
responsible course expanding its list of eligible recipients,
and it should be applauded by all Americans who support the
rights of each of us to support the charity of our own
choosing.

Earth Share was incorporated as the Environmental
Federation of America in 1988 by prominent national
environmental and conservation agencies to educate the public
and broaden financial support for the member agencies,
principally by obtaining access to government and corporate
employee payroll deduction fundraising campaigns, including
the CFC. The Earth Share operating name was adopted to
reinforce the concept that individuals and companies can
produce positive environmental changes by "doing their Earth
Share".


34

passion, the commitment to community that Federal employees
ve and express through the Combined Federal Campaign.
So, with that, Mr. Chairman, you want to go back to the proceed-
ing of the hearing in the way that you had a lanned?
The prepared statement of Hon. James P. Moran follows:]


115

about public policy is so cherished a public value that in the
United States it is written into our Constitution, which guarantees
both the freedom of expression and the right to petition the
government for the redress of grievances.

In fact, many "conventional" charities express their views
about public policy, because they see both their own direct
assistance and public policy as appropriate, complementary ways of
dealing with the human problems that it is their organizational
purpose to reduce. Or, in some cases they may see public policy as
adding to these problems. We see no way that distinctions among
currently eligible organizations can be drawn between service and
advocacy organizations that would be both meaningful and fair.

Nor would society benefit from forcing organizations to choose
between service provision and expression as a result of new CFC
eligibility rules. Feeding the hungry, to take a most basic
example of conventional charity, is a most worthy organizational
activity. But worthy also is activity that educates the citizenry
about hunger, that seeks policies to remove the root causes of
hunger, and that educates those who live at the economic margins as
to how they can stretch their food dollars to get the best possible
nutrition. A federal employee who is concerned about alleviating
hunger and who wishes to make a contribution through CFC to help do
so should have the choice to contribute to an organization that
does any one or any combination of these activities. We can
discern no valid public policy reasons why the educational or
advocacy activities of some organizations that participate in the
CFC should disqualify them and thereby reduce that federal
employee’s choice.

If the Congress truly believes in personal responsibility, it
will permit federal employees to make these choices. It will not
remove organizations from the CFC based on the particular forms in
which they perform their work. And it will not do so, as it is
constitutionally forbidden to do, based on the content of the
organizations’ views about solutions to the conditions to which
they address their work. (See Cornelius v. NAACP Legal Defense
Fund, 473 U.S. 788, 811 (1987).

We commend the Chairman for holding hearings to air the views
on all sides of this issue. We believe that the hearings have
demonstrated the wisdom of the current rules regarding
participation in the Combined Federal Campaign. We urge the
Subcommittee to leave stand the current CFC eligibility rules. We
also urge the Congress not to change the Hoyer-Hatfield provisions
of law, signed by President Reagan in 1986, which assure that the
Office of Personnel Management does not allow its political views
of the moment to interfere with federal employees’ rights to choose
the organizations to which they give through the Combined Federal
Campaign.


116

-4-
what must have seemed to its beneficiaries to be amazing odds, the CFC has nonetheless
managed each year to produce wonderful levels of financial support for worthy charities, But
this has come mainly despite, not because of, the groundrules that have evolved for the CFC,
including, most conspicuously, the rules imposed by Congress in 1988 that prevail to this day.

Congress has the power to restore the CFC to what it was originally intended to be, and
what hundreds of thousands of its contributing supporters innocently believe that it is: An
efficient means of giving voluntary support to honest programs that meet real needs of human
health and welfare, thereby lessening the burdens of government. For that reason 1 am grateful
to you, Mr. Chairman, and to this Subcommittee for being interested in the campaign, for
convening this hearing, and for asking me to appear before you.’

You have asked me to testify as 10 my experience with the CFC while General Counsel
of the Office of Personnel Management and, in so doing, to discuss the Reagan Administration's
attempt to restrict the CFC to human health and welfare organizations and the attendant litigation
and then to answer three broad questions regarding the purposes, operation, and legal foundation
‘of the campaign. I am happy to do so.

To assist in this undertaking 1 have prepared, and submit with this Statement, an

Appendix of Exhibits that sets out the documentary history necessary to understand the CFC and

how it came to its current pass.

+ A copy of the letter of May 30, 1995, of John L. Mica, Chairman of the

Subcommittee on Civil Service of the Committee on Government Reform and
Oversight of the United States House of Representatives, to me inviting me to
appear at this hearing is attached to this Statement as Annex B.

6 ‘The Table of Contents of the Appendix of Exhibits is attached to this
‘Statement as Annex C.


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186

-25-
Executive Order and its efforts in following years to administer the CFC in faithful adherence
to that Order despite successive, adverse. but ultimately reversed court orders and the “Hoyer
Amendment": “The campaign arrangements used from 1984 through 1987 were fundamentally
unsound and raised administrative costs excessively. They proved to be controversial and
disruptive of the Federal workplace."”"

Controversy is inescapable, even with the most liberal of eligibility rules. In 1989 as
venerable an institution as B'nai B'rith became embroiled in a CFC dispute with OPM over
Paperwork requirements and the interpretation of the 25% cap on administrative expense.”

In 1991 OPM revised the CFC regulations yet again,” in part to take into account the
fact that “since the more encompassing legislation was passed in December 1987, many
additional charitable organizations have joined the CFC."" Perhaps most significantly, the
1991 regulations adopt an entirely new formula for the distribution of undesignated
contributions: “Undesignated funds will be distributed...to all of the agencies in the brochure
in the same proportion that the agencies and federations received designations in the CFC."

For the convenience of the Subcommittee, the CFC rules as they now stand, codified at

5 CFR Part 950 (1995), are set forth in full in the Appendix.”

Id, at 19147.
TM See Appendix, Exhibit 33.

$6 FEDERAL REGISTER 42677 (August 29, 1991). The full text of the
1991 rule is set forth at the Appendix, Exhibit 34.

TM pid.
% Id, at 42682, 5 CFR § 950.502 (1992).
© Sce Appendix, Exhibit 35.


117

Prohibitive fees would preclude a number of groups from participating in the CHC.
Additionally, requiring a charity to pay a user fee means draining funds from an
organization's primary purpose - its charitable activity.

The Alliance in most concerned about the third peopneal, changing eligibility
criteria. In the Chairman's statements und in remarks and writteu tevtimuny of a
number of witnesses, attempts have been made to distinguish between “advocacy

groups" and "traditional" charities. This is a

tinction without merit. Advocacy is
part of the work of all charities. Charitable organizations play u vital role in the
development and implementation of public policy. Groups that feed the hungry and
house the homeless have experience and views that are of great value to policy
makers; advocating on behalf of the constituencies they serve is an integral part of
charitable activity.

Efforts to prohibit groups that advocate from participating in the CFC set up «
false dichotomy and do a disservice to the charitable community. Who is to say that
yecuring a consent decree to insure that poor children arc tested for the level of lead in
their blood or obtaining a court order to protect a bavered woman is any less worthy
or charitable than operating a soup kitchen or housing refugees?

‘Stutements which characterize advocacy groups as political are also inaccurate.
In 1954 language was added to the 1934 Revenue Act prohibiting public charitics from
intervening in clections and supporting candidates fur office. A 1987 amendment to
the legislation provided that opposition to candidates is also prohibited. Using the

term political to depict charities merely injects a loaded term into discussion, silencing


58

Mr. Mica. I now call on Don Sodo, executive director, America’s
Charities.

Mr. Sopo. Congressman Mica and subcommittee members, thank
you for this opportunity to testify. In addition to my remarks, I am
including additional written testimony.

My name is Don Sodo. I am the executive director of America’s
Charities. I have worked in the non-profit sector for over 25 years
with a variety of organizations serving children, the disabled and
the economically disadvantaged in the United States and overseas.

America’s Charities is a federation of 80 national charities which
participate in the CFC, as well as in over 100 other public and cor-
porate workplace-giving campaigns throughout the United States.
Our members include such charities as the Make-A-Wish Founda-
tion of America, Habitat for Humanity International, the National
Right to Life Educational Trust Fund, the Multiple Sclerosis Asso-
ciation of America, the NAACP Legal Defense and Education Fund
and Give Kids the World.

I am also here to acknowledge the position of Independent Sec-
tor. Independent Sector is a coalition of 800 corporate, foundation,
and charity members, including the Girl Scouts, the YMCA, Amer-
ican Cancer Society, American Red Cross, Salvation Army and cor-
porations like Aetna Life. Independent Sector is respected nation-
ally for its role in encouraging volunteering and helping all of us
to be better people and serve our communities better.

Independent Sector testimony strongly opposes restricting
choices in the CFC, noting the irrevocable harm that could be
caused to the charitable community.

I would also like to stress several other points:

First, after years of contention, litigation and legislation in the
1970’s and 1980's, the CFC has functioned effectively and success-
fully since the passage of bipartisan CFC reform legislation. Since
1987, giving levels have increased at twice the rate of growth as
traditional limited choice campaigns.

Giving to “traditional” charity members of America’s Charities
has increased by 7 percent between 1988 and 1994, and I believe
that the group of all traditional charities in the CFC today is re-
ceiving millions of dollars more annually than before choices were
expanded in 1987.

Overall giving in the CFC has skyrocketed, increasing from $83
million in 1979 to $197 million in 1993, an increase of 137 percent.
Between 1987 and 1991 the average contribution rose from $59 to
$89. Federal employees have demonstrated their preference for the
added choices in the CFC by their increased support.

And we should note that, due to anti-coercion rules that were put
in place in 1979 and 1980, which were the result of a successful
contention by Federal employees that they were too highly pres-
sured to give, which I think we all agree is not appropriate, of
course participation rates did drop after that.

The CFC today is the most successful workplace-giving campaign
in the country and a model for many others.

Second, the free market works in the CFC, just as in the private
sector. Like the CFC, numerous corporations today provide hun-
dreds of charity choices to their employees, and more are doing so
every year. Corporations are providing these choices because they


112

Morris, RATHNAU & DE LA ROSA

STATEMENT
of
JOSEPH A. MORRIS:

Before the
Subcommittee on Civil Service
of the
Committee on Government Reform and Oversight
of the
United States House of Representatives

on
REFORM OF THE COMBINED FEDERAL CAMPAIGN

June 7, 1995

Mr. CHAIRMAN AND MEMBERS OF THE SUBCOMMITTEE:

Introduction

‘The Combined Federal Campaign is probably the single most important source of donor

support for the private, voluntary health and welfare charities that serve the people of this
nation, It 1s also supplies a major channel of expression of the charitable impulse that runs

deeply in Federal workers, including civil servants, members of the armed and uniformed

services, judges, congressmen, and their staffs.

Five things about the Combined Federal Campaign (the “CFC") have long made it a

magnet for controversy:

‘A copy of my biographical sketch is attached to this statement as Annex


16

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ANA at

vases oer Fa ae

MEGA me RENEE NToaw noni so coymine

STATEMENT OF THE NAACP LEGAL DEFENSE AND EDUCATIONAL FUND, INC.
BY CHARLES STEPHEN RALSTON, SENIOR STAFF ATTORNEY.
BEFORE THE SUBCOMMITTEE ON CIVIL SERVICE OF THE
HOUSE COMMITTEE ON GOVERNMENT REFORM AND OVERSIGHT

HEAWING ON TIE CoMMINED FEDERAL CAMP
JUNE 7, 1995

GN

Chairman Mica, members of the Subcommittee, first. the NAACP Legal Defense
and Educational Fund, Inc. (NAACP LDF) wishes to thank you for the opportunity to
present its views concerning proposals that eligibility for participation in the Combined
Federal Campaign (CFC) be restricted so as to exchide organizations that have been called
“advocacy groups’ that, itis claimed, do not directly benefit human and welfare. Second,
the NAACP LDF, which is one of the organizations that has been categorized by some as
such an “advocacy group" wishes to make clear from the outset its absolute and unwavering
‘opposition to any such limitations on eligibility.

Briefly stated, the assumptions upon which such proposals are based are in error,
both factually and legally. The Legal Defense Fund and simitar organizations are not
advocacy groups,” however that term may be defined. The Legal Defense Fund is a bona
fide, legitimate 501(c)(3) charity that in fact provides direct benefits to human beings in the
areas of health, education, income support, housing, and a variety of other areas of human
welfare. Moreover, it does its work so efficiently that the benefits it provides far exceed
its own income and expenses. Finally, it does not seek nor does it receive either funding
cf subsidies from the federal government.

Before elaborating on the above, 1 would first like to briefly describe the Legal
Defense Fund and the history of its involvement with the Combined Federal Campaign.

L
‘THE NAACP LEGal. DEFENSE FUND AND THE COMBINED FEDERAL CAMPAIGN

‘The NAACP Legal Defense and Educational Fund, Inc., is an entirely separate
organization from the National Association for the Advancement of Colored People. The
Legal Defense Fund was originally exbished by the NAACP as separate corporation
that could obtain tax-exempt status for NAACP activites that so qualified.

Defense Fund was chartered under New York state law as a legal aid society and parece
tax-exempt status in 1940 from the federal government under the predecessor statutes to
section 501(c)(3) of the Internal Revenue Code The Legal Defense Fund's first Director-

aoe

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28

Mrs. MORELLA. And I guess I would like to ask Ms. Green, do
you know if private-sector organizations place limits on the kinds
of charities that their employees can give to? And, if so, how are
these drives working?

Ms. GREEN. No, I’m not aware that there are limitations. I do
know that we're used as an example—the CFC is used as an exam-
ple—of a successful workplace campaign, and the trend_now is to

e more inclusive, to give more choices to employees. So, if any-
thing, I see that we're being modeled.

Mrs. MoRELLA. If we limit CFC eligibility, would you like to spec-
ulate on what you think the ramifications would be? Would dona-
tions, for instance, go up for the remaining charities that are on
the list? Would they go down? Would the removed charities suffer
reductions in Federal worker contributions? Will we be back in
court? I mean, what ramifications do you see of further restricting
this?

It’s interesting, because when you mentioned from 1988 in your
testimony we are now down to 435, which is the exact membership
of the House of Representatives—whether that has any connection
or not, it just seemed interesting.

Ms. GREEN. Taking your latter statement first, yes, we would
probably be back in court; and we would also probably have some
resentment among Federal employees. The indication is that we
would because we would be limiting their choice. It also wouldn’t
save money.

Again, talking about the time that it takes Federal employees to
run the Combined Federal Campaign, the amount of employees’
time that’s spent wouldn’t matter if it was 100 or 1,000 charities.
We think we would see some downswing in the Combined Federal
Campaign if there was more limitation.

Mrs. MoRELLA. And you don’t think there would be a significant
reduction in the costs of implementing the program.

What is the percentage of individuals who give to CFC? You
know—you know, the ones who use the payroll deductions.

Ms. GREEN. The payroll deduction of 88 percent of employees
who give—

Mrs. MORELLA. Eighty-eight percent.

Ms. GREEN [continuing]. Eighty-eight percent of employees who
give. Approximately 50 percent of the workforce gives and 88 per-
cent of those who give, give in payroll deduction.

Mrs. MORELLA. Would you not say, looking around at other pri-
vate sector organizations, that that is a pretty high percentage?

Ms. GREEN. It is high.

Mrs. MORELLA. Both of giving as well as payroll deductions?

Ms. GREEN. It certainly is. It’s very high.

And just using my own personal experience, having an Eagle pin
myself—if it wasn’t for payroll deduction, I probably wouldn’t have
that Eagle pin. And I think we would see that throughout the
country in Combined Federal Campaigns.

Mrs. MORELLA. Have you received any comments in your office
about Chairman Mica’s proposal?

Ms. HALL. Yes. I certainly did; and, obviously, a number of the
panelists who will be speaking after us provided their comments.
We received phone calls from outside campaigns, from Federal em-


94

Freedom of Speck on Right to Keep and Bear Arms

Minnesota; David Gross v. Minneapolis. This case involves the taking of an adverse
personal action against an employee (attorney) of a local unit of government on account of his
constitutionally protected expressions in support of the right to keep and bear arms. The case went
to arbitration, and Gross was ordered reinstated. He is now contemplating filing a civil rights action
for violation of constitutional rights. The case is being analyzed by a national jury project to
determine the probability of success.

Ohio; Thomas v. Whalen, et al This is a civil rights action under 42 US C.A. § 1983 in
U.S. District Court, The case involves disciplinary action taken against Police Lieutenant Harry
Thomas for speaking on behalf of gun rights and the NRA. Disciplinary proceedings instituted
against Lt. Thomas were an attempt to stop the exercise of his First Amendment rights. Upon
deposing of Lt. Col. Ammann, it was discovered that the Cincinnati police administration seeks to
reduce Lt. Thomas’ credibility when speaking on matters of gun control by preventing him from
identifying himself as a Cincinnati police officer. The court disallowed a claim of qualified immunity
by the defendants, and they filed a notice of appeal on October 13, 1993, to the U.S. Court of
Appeals. The appeal will delay a jury trial

Civil Rights Cause of Action Based on Equal Protection

Colorado; Thomas C. Miller & R.W. Peterson v. Denver. The plaintiffs are private
investigators, Denver has a policy of refusing to even process applications for a permit to carry a
pistol concealed. The issue is whether the city may be compelled to process applications as required
by statute and ordinance even if it ultimately decides to deny a permit. The fund filed an amicus
curiae brief in May 1993. It was prepared by counsel volunteered to the fund from the NRA’s
General Counsel's Office at no cost to the fund The Colorado Court of Appeals on June 16, 1994,
held that the complaint stated a cause of action and reversed the tral court's decision dismissing the

The case is reported at 878 P.2d 141. The court held a cause of action was stated under
42 US. Code § 1983, based on a claim that the defendants handled private investigators’ applications
for concealed pistol permits differently than applications submitted by current or retired law
enforcement officers and that no rational basis existed for this disparate treatment. The police, in
effect, were attempting to protect the outside employment of current law enforcement and retired law
enforcement officers to conduct a private business at the expense of the appellants, The appellants’
right to work was stifled by an attempt by the organs of the state to have a monopoly in the field of
armed private investigation and protection

Right to Self-Defense
District of Columbia; George Cowan. Mr. Cowan discharged his pistol and struck a burglar

discovered in his home in the night The burglar subsequently expired Mr Cowan has not been
charged with any offense or summoned to appear before the grand jury thus far He has consulted


9

lawsuits and much acrimony regarding participation. It would be
a mistake to return to the ill will and turmoil of the past.

If the subcommittee has specific proposals for improving CFC, we
would be glad to comment on them. If the Congress passes new
rules to guide the CFC, we will enforce them. But in candor I must
say that we do not consider CFC to be in need of major changes.

Thank you very much, and I’ll be glad to take your questions.

Mr. Mica. Thank you Ms. Green.

(The prepared statement of Ms. Green follows:]


Counsel was the late Thurgood Marshall.

In 1957, after investigations by the IRS that were instigated by members of Congress
‘opposed to the Legal Defense Fund's work that led to Brown v. Boand of Education, the
Fund became completely separate from the NAACP, and since that time the Fund has had
a separate board of directors, staff, funding, and program. ‘The Fund has continued to
‘work cooperatively with the NAACP, NAACP local branches, and many other civil sights
‘organizations on matters of mutual interest. Our current Director-Counsel is Elaine R.
Jones.

‘The Legal Defense Fund's charter recites that its central purpose is to provide legal
assistance to indigent African Americans who are unable to afford legal assistance
‘themselves because of their poverty, and who are suffering a denial of their constitutional
and civil rights. The charter also provides that the Fund provide educational services and
benefits to African Americans and the American public as a whole. ‘Tax-exempt status was
granted based on the principle that the provision of legal services to specific groups who
suffer oppression because of their minority status is a bona fide charitable purpose, long
recognized in the law. The Legal Defense Fund has maintained its tax-exempt stamus as a
charitable, not-for-profit organization continuously since 1940, making it the oldest
‘organization of its type in the country."

‘The Legal Defense Fund first applied to the CFC in 1980 but was turned down
because of the then-existing “direct services" rule, which provided that only legal
‘organizations that provide “direct services" to represent individuals “without regard to how
that individual's case can influence public policy’ could participate in the CFC. The Legal
Defense Fund and the Puerto Rican Legal Defense and Education Fund (PRLDEF)
brought suit challenging the “direct services' rule as unconstitutionally vague. The United
States District Court for the Distriet of Columbia held that the rule violated the First
‘Amendment because of its vagueness. In its decision the Court noted:

Plaintiffs argue at length that they do provide “direct services" in a variety of
ways. The record is replete with the results of plaintiffs’ work, indicating that
law suits by plaintiffs have provided millions of dollars in back pay and
benefits, and invaluable other "services" such as increased training
opportunities, additional promotions, improved school programs, and better

‘In the early 1960's, the Internal Revenue Code was amended to permit organizations,

twch ts Ge NAACP and the Ameria Chil Liberiea Union that did sot qually

for tax-exempt stanus, to tocarry out activities

‘Asa remit the NAACP established the NAACP Special Contrfovtion Fund andthe ACLU

established the ACLU Foundation, both of which qualify for tax-exempt status. Since that

time, many “legal defense funds" have been established, using the NAACP Legal Defense
‘and Educational Fund, Inc., as their model.

2



83

Mr. Mica presiding]. I thank each and every one of you for your
testimony before us today. We will proceed with a couple of ques-

tions.

First of all, Mr. O’Steen, you spoke about the Planned Parent-

hood organization, and you are in opposition to their position. Do
ou think that taxpayers should fund the activities of the Planned
arenthood organization?

Mr. O’STEEN. I will make a distinction. If we are speaking of a
direct Federal grant to Planned Parenthood, no. If we're speaking
of Planned Parenthood’s ability to be in the CFC, yes. I think there
is a distinction.

As I indicated in my testimony, the cost to the taxpayer of the
CFC we really don’t believe is going to change no matter who is
in or who's out.

Mr. Mica. Of the direct money, which is three quarters of a mil-
lion dollars, they are benefiting by that. And then if you use the
figure of $22.1 million total, expenditures are 11 percent, taxpayer
resources and funds being used to promote the position of the
group with which you are in direct conflict. And you still support

t

Mr. O’STEEN. Let me clarify. I was including the three quarter
million figure in what I don’t consider a direct subsidy. The first
was a check made out to Federal funds out——

Mr. Mica. You testified that the Deputy Director said that is a
direct, appropriated fund from general treasury.

Mr. O’STEEN. For the administration of the entire campaign. And
that figure, again, is not going to change. That money does not di-
rectly go to Planned Parenthood or to us. That figure is not going
to change regardless of whether they are in or out of the campaign.

Mr. Mica. So you will deny the headline that says, O’Steen sup-
ports Federal funds for Planned Parenthood subsidization of activi-
ties?

Mr. O’STEEN. Sure. I may see such a headline, but there really
is a distinction, I believe, whether in America an individual Fed-
eral worker has the ability, through workplace giving, to say, hey,
I agree with Planned Parenthood. I want to put my $20 there. Or
T agree with NRL Educational Trust Fund.

Mr. Mica. What about a compromise? If some of these folks are
going to participate, it is obvious that whether the charities are ad-
vocacy or nonhuman welfare groups, there is some cost to the tax-
payers. Would you support changes in applying some of the costs
to these groups to absorb this administrative overhead?

Mr. O'STEEN. Id like to get back with the definitive answer. I'm
not speaking in opposition to that. That’s a new question to me. I
would give you that back in writing.

I would suggest, though, that if there is administrative cost
borne it should be borne equally and proportionately by all char-
ities in the campaign.

Mr. Mica. So you could support some changes in that regard.
Then you wouldn't have to see that headline.

Mr. O’STEEN. With the—I’d like to come back before I give you
a definitive yes since I have a board of directors of 54 persons. But
Tm not speaking in opposition to that, and I don’t believe NRLC
would oppose that.


5

man’s original press release. In fact, Ms. Green will tell us that,
at most, last year’s direct costs were a little over $731,000. That’s
not bad for a campaign that raised nearly $200 million. Remaining
costs are fixed costs, which would essentially stay the same no
matter how many or how few groups are included on the eligible
ist.

After mulling the issue over for a while, I have decided that the
basic issues confronting us this morning are should we continue
with the Combined Federal Campaign and do Federal workers de-
serve the right to choose from a broad list of organizations where
to give their charitable dollars? The answer in my book to both of
these questions is a rousing yes.

A Federal worker from Pennsylvania summed up the argument
in a letter to me saying: “It is my money and should be my choice.
The Combined Federal Campaign is a convenient place I can make
an informed decision about my charitable contribution for 1 year.
I would like my full range of options open.”

I think Federal employees and worthy charities all across the
country deserve no less. If we attempt to restrict which groups are
on the list, who will be the arbitrator? We will be creating a subjec-
tive mess that will only result in added costs for OPM and a long
line of lawsuits.

My Republican colleagues are usually all for open markets, free-
dom of choice and no hint of big brotherism. Unfortunately, this
venture is exactly the opposite. If we are going to end up creating
a monster of an annual charitable campaign, the next step is sim-
ply ending the campaign altogether. I do not think that’s what my
Republican colleagues want.

I think we should step back and ponder this whole issue. I think
the Pein employees and the charities would be better served if
we did.

Thank you, Mr. Chairman. I yield back the balance of my time.

Mr. Mica. Thank you, Mr. Mascara.

I would like to call our first panel forward: Lorraine A. Green,
Deputy Director of the Office of Personal Management, who I un-
derstand oversees the program. And you have someone with you?

Ms. GREEN. Yes, I do, Mr. Chairman.

Mr. Mica. Could you identify her, please?

Ms, GREEN. Gerri Mason Hall.

Mr. Mica. It’s the custom of this subcommittee and committee to
swear in our witnesses. So if you would stand and raise your right
hand.

[Witnesses sworn.]

Mr. Mica. Let the record reflect that the witnesses answered in
the affirmative.

Mr. Mica. Welcome, Ms. Green and Ms. Hall. We look forward
to your comments. If you have a prepared statement, we will be
glad to include the entirety of it in the record. If you would like
to summarize, we would appreciate that. Ms. Green, you are recog-
nized.


1

to collect for the likes of the LDF, the National Right to Work
Legal Defense Fund the Conservative Legal Defense Fund, Planned
Parenthood, the Right to Life Committee and so on.

It was that experiment that then brought us to the point of
President Reagan’s 1983 Executive order which really changed the
course of the debate. Ironically, the Reagan 1983 Executive order
is still the underlying law that governs the CFC.

Those are the rules that govern the Combined Federal Campaii
today except for, of course, the Hoyer amendment and the 1988 Ur-
gent Supplemental Ap ropriation Act, section 618 of that act,
which gutted the eligibility standards and in effect opened up the
CFC to participation under, in effect, the term, made permanent
the terms of the 1982 experiment.

Mr. Chairman, you have asked me to advise on what I think are”
the best ground rules for the campaign. I think they are embodied
in Reagan’s 1983 Executive order, and in the 1983 eligibility stand-
ards that gave voice to that order.

I would urge the Congress to repeal section 618 of that Fiscal
Year 1988 Urgent Supplemental Appropriations Act and, instead,
enact the substantive eligibility standards of President Reagan’s
1983 Executive order and Director Devine’s 1983 regulations. If
Congress did that, Mr. Chairman, it would restore integrity to the
CFC and would make the Combined Federal Campaign somethin;
worthy of taxpayer subsidy and worthy of intrusion into the Fed-
eral workplace because it would focus affirmatively the Combined
Federal Campaign on raising money for health and welfare organi-
zations that deliver services directly to poor, needy and sick human
beings, and that is what this kind of charity should be about.

[Note.—The annex and appendix of Mr. Morris’ prepared state-
ment can be found in subcommittee files.]

{The prepared statement of Mr. Morris follows:]


81

government funding or subsidies. Simply put, with money comes strings, and the Legal
Defense Fund needs to remain free to pursue litigation against any entity that is guilty of
violating the civil rights of Americans, including agencies of the federal government. ‘The
actual out-of-pocket costs of the CFC are taken from receipts. Thus, each participating
organization is charged for expenses in an amount proportional to the contributions it
receives. This is appropriate and as it should be.

With regard to indirect costs, mainly the salaries and benefits of federal employees
‘who run the CFC at both the national and local levels, these costs have never been charged
to the participating charities. Federal employees do not, and they sbould not, solicit
contributions on behalf of any particular charity. Indeed, inappropriate pressure to
contribute through the CFC is discouraged by the regulations. ‘The activities of federal
employees are designed to encourage charitable giving to whatever charity each employee
freely decides should receive that employee's own money.

If it is now believed that it is inappropriate that taxpayer money go to support the
CFC, the solution would be to reimburse the government for indirect costs from CFC
receipts. Just as in the case of direct costs, each organization would contribute
proportionally to its receipts. The Legal Defense Fund does not advocate that such a
measure be adopted. Our point is that if the problem is the expense to the government of
employees’ salaries, then that and equitably by

i is not equitable that
indeed, that "solution®
the CFC.

is no solution af all, since the government would still be “sub:

Vv.
‘THE PURPOSE OF THE CFC Is TO FACILITATE CHARITABLE GIVING BY
INDIVIDUAL FEDERAL EMPLOYEES.

‘We have all heard the story of the person who is solicited at home by a charity and
declines because “I gave at the office." Workplace solicitation is an unusually efficient and
effective means to encourage charitable giving. Through automatic jeductions,
contributions are spread out and re therefore, viualypaoleas. No reminders or fotow-
ups are necessary $0

‘The minimization of fund-raising costs is central and important. The less
hhas to spend to raise money, the more money it has to spend on its charitable activities and
the more benefits its clientele will receive. Thus, its simply no answer to say that charities
that are exchded ffom the CFC cn rae the same funds in another way. They cannot

Excluded charities do not have access to lists of the names and addresses of federal
employees and even if they did, they would run right up against the “I-gave-at-the-office”
answer.



188

lfitis possible

and representatives of other conserve. for aviver tobe “Until we came along, nobody had
on groupe

"Alhough the jury is still out on the Tcl, then the
succen of tee Cor, aon op hhepoina oon “We have done that and
tic apout he tare aclfoot ives Tae hinge ence”

“Tink we have sted to make & , ng a
sonal dentinalarge problem shes ‘is chy, t's aver tobeluchs.dhen the
"ere doing sea rexoration work kot ive chy ey tee
We've ereatedan awareneasof te prob. lucy these
Sconce eee
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values isn everybouy’s interest in the be geting, is 4 bunch
ong ran, Now fre can get anadher ‘ong, og aoa and at ha
Coupe ofthe cine rachervon beard

therverneedsssmore people ike Trout
‘Unlimited, willing io doeveryth
posily ean o ave *

(ch ofr ds path ig cif
(uy, ava at pe

(rt te Mach pad eh sae et aa cesta wc ae
nates cpg te ec eas ee cel nce
(eat fn rept ity alco sig Sir.
EE ror


107

President and appointed Donald Devine as Director of OPM, Janu-
ary 19, 1991, was the first major decision of a court that ordered
the LDF and in its wake a host of other legal and advocacy organi-
zations into the Combined Federal Campaign.

Mr. Chairman, I know that our full statements are going to be
added to the record. I would like to note that there is an Annex
3 to my full statement that is an index of 35 documentary exhibits.
I have tendered to the committee, as well, a compendium of those
35 exhibits that take the subcommittee through the history of the
Combined Federal Campaign from the earliest Executive orders to
all of the various rules and regulations that have been promul-
gated, the court decision correspondence, including in the early
1980’s very interesting correspondence to Director Devine from
Abner J. Mikva, sitting judge of the U.S. Court of Appeals for the
District of Columbia circuit, who weighed in what Director Devine
thought in those days was an instance of bizarre judicial lobbying
of the executive branch trying-to open up the Combined Federal
Campaign to advocacy organizations.

Director Devine was so nonplussed—it is rare to find him non-
plussed, but he was so nonplussed by this lobbying by Judge Mikva
who apparently continues his letter writing habits to this day, that
Director Devine referred Judge Mikva’s letter to me for reply and
my reply to Judge Mikva will also be found in this compendium.
So I ask that the compendium of exhibits also be inserted in the
record along with my statement.

Mr. Mica. Without objection, we will submit for the record at
least a summary of what is in the compendium and refer to that.
It looks like a lengthy document. I am so cost conscious, we may
refer to that.

Please proceed.

Mr. Morris. Thank you, Mr. Chairman. I think that it is impor-
tant at the outset of your work in considering the Combined Fed-
eral Campaign to come back to a fundamental question about the
role of charity in workplaces in America at large, a question Mr.
Mascara put to one of the witnesses, and I don’t think he got a sat-
isfactory answer.

The question is, are there restrictions put on charitable solicita-
tion in the workplace in the private sector and the answer is, you
bet there is. I rather suspect most private workplaces in America
don’t allow charitable solicitation in the workplace at all.

And most private sector places of employment that do, including
particularly the large corporate organizations where solicitation on
behalf of charities of their employees are routine, tend to limit so-
licitation to, in the typical instance in a large metropolitan area,
the United Way or the Crusade of Mercy or Community Chest, but
some organization, usually umbrella or a federation that selects its
own members. Private sector employers are entitled to decide
whether or not there will be any invasion of their workplaces by
charitable solicitors at all, and if they decide in the affirmative to
allow invasion of the workplaces by charitable solicitors, they are
entitled to decide whom they will admit.

Here we are dealing with an employer. To be sure, it is a some-
what different employer because it is a governmental employer.
And because it is a governmental employer, there are just a few


92

the fund are no different from those submitted by other organizations that were approved for CFC
participation. Therefore, the denial was appealed as beings erroneous and showing disparate
treatment

The Firearms Civil Rights Legal Defense Fund would like to point out to the Subcommittee,
just as it did to OPM, that the fund provides services, benefits, or assistance, and conducts activities
affecting human health and welfare by providing legal aid and conducting educational activities in
defense of the human and civil right to keep and bear arms, as secured by the constitution and by law
FCRLDF donates or renders all of these services gratuitously This benefits a substantial and
indefinite class of persons throughout the nation who are legitimate subjects of charity. A sampling
of the cases described in the fund's February 2, 1995, Attachment F submission to OPM reveals that
FCRLDF provides traditional human health and welfare benefits, services, or assistance by
supporting persons who have been deprived of the right to keep and bear arms on account of
discrimination based on race (black), gender (female), age (senior citizen), and low income In
addition, FCRLDF has provided assistance to persons who have been penalized in their public
employment because the content of their speech supported the right to keep and bear arms. FCRLDF
has also been instrumental in having the courts recognize a civil rights cause of action under 42 U.S
Code § 1983 where licenses to carry a gun were issued in a discriminatory manner so as to deny
‘equal protection of the law

Lastly, a person has to be alive to enjoy any right ' That is why the right to self-defense is
considered "fundamental"? This benefits the primary social interests of safety, security, and order.
Many people too poor to afford legal services have been benefited by FCRLDF._ Providing legal
services, protecting rights, and supporting the defense of life itself are traditional welfare benefits

Examples of cases presented in the February 2, 1995, Attachment F submission to OPM
supporting the above claims are as follows:

A predominant reason to protect a right to self-defense and personal security is that such an
interest may be a prerequisite to exercising and enjoying those rights that are explicitly
enumerated. The dead probably have very little use for the First, Fourth and Fifth Amendments.
Writings that have contributed to our political and constitutional tradition confirm the idea that
individual security and self-defense are basic and natural human concerns." Nicholas J, Johnson,
Beyond the Second Amendment: An Individual Right to Arms Viewed Through the Ninth
Amendment, 24 Rutgers L. J. 1, 38 (1992)

? United States v. Panter, 688 F 2d 268, 271 (Sth Cir, 1982). “[T]he right to keep and bear
arms" is included in the catalog of individual liberties Planned Parenthood v. Casey, 120
L.Ed 2d 674, 696 (1992).


180

that the cost of running the CEC campaign is the same for many charities or a few. Any
additional costs are paid for by the charities themselves.

In an era of reduced goverment spending. it falls upon the non-profit sector and the
public to work together to fix the problems that government has not addressed oF is
unable to address. To do this, the non-profil sector needs the continued financial support
‘of government employees through the CFC, Since the CFC began admitting additional
charities in 1980, workplace giving has increased dramatically. From 1979 through 1993,
as giving opuons continued to increase, giving by federal employees rose 137%. from $83
million to $197 million. ‘There was also a per person increase in giving from $30.50 in
1979 (0 $97.04 in 1993, up by 226%.

‘Throwing chasities out of the CFC would result in a decline in employee giving, at the
same time government spending for a variety of programs is being reduced by the
government, A private sector study by Yale University confirmed that employee morale
‘and giving mcreased when workplace charitable drives were opened up to more charities.
Private sector employee surveys show that 70% want expanded giving choices, Federal
employees want the same.

II. Human Health And Public Welfare Are Well Served By the CFC and TU.
In your letter addressed to the Honorable James B. King, Director of the U.S. Office of
Personnel Management, dated February 23, 1995, you singled out Trout Unlimited as an
organization that does not provide direct benefits to human health and welfare.

This is an erroneous statement. Nothing is more critical to human health and welfare than
clean water, and plenty of it. The old saying “We All Live Downstream” is of particular
interest in this debate, because we all do indeed “Live Downstream” of someone else, and
while efforts to provide clean water and healthy habitat for trout and salmon benefit
anglers and fish alike, other wildlife species and mankind benefit greatly as well

‘TU chapters engage in projects that eliminate or reduce pollutants such as sediments,
nutrients such as phosphorous and nitrogen, and other chemicals, such as pesticides and
hesbicides.. TU chapters have worked for years to reduce and eliminate polluted runoff
flowing into the nation’s rivers, lakes, and streams. Polluted runoff has had fatal effects
in this country. In 1993 in Milwaukee, Wisconsin, 104 people died when they were
subjected to Cryptosporidium in their drinking water, a protozoan that flourishes in
polluted water. TU chapters have worked for years to reduce agricultural polluted runoff
and to relocate livesiock or fence them away from sensitive watershed areas. All of these
projects are done cooperatively with landowners and state and federal natural resource
‘management agencies,

For example, this year TU spent over $121,727 on direct grants as part of our Embrace-
‘A-Stream program, to TU chapters for local stream restoration projects across the
country. A project-by-project listing is attached, Recent projects that have been funded
by TU include the following:


183

NON TAH AS

BlG BLACKFOOT

BY GREG TOLLEFSGS


Testimony to the Civil Service Subcommitt
U.S. House of Representatives
dune 7, 1995

Testimony of Don Sodo

Cong. Mica and Subcommittee Members, thank you for this
opportunity to testify. In addition to my remarks, I am including
additional written testimony.

My name is Don Sodo. I am the Executive Director of
America's Charities. I have worked in the non-profit sector for
over 25 yeara with a variety of organizaticns serving children,
the disabled, and the economically disadvantaged in the U.S. and
overseas.

America‘e Charities ia a federation of 80 national charicies
which participate in the CFC, as well as in over 100 other public
and corporate workplace-giving campaigns throughout the United
States. Members of America’s Charities include the Make-A-Wish
Habitat for Humanity International, the
Educational Trust Fund, the Multiple
the NAACP Legal Defense and
Education Fund and Father Planagan’e Boys’ Hone.

America’s Charities received contributions ranging from
$9 million to almost $1$ million in the CFC from 1990-1994.

I would like to stress eeveral pointe in this testimony:
First, after years of contention, litigation, and legislation

in the 70a and 80s, the CFC has functioned effectively and
successfully since 1987.


56

To

Independent Charities of America (ICA) and ICA Partner Admissions
Standards Compared Combined Federal Cam;

paign Standards

Independent Charities of America (ICA) agencies must reapply and be re-

certified each year. As a minimum starting point, the applicant must
meet the eligibility criteria for admission to the Combined Federal
Campaign (CFC) for that year (i.e. audit, 990, annual report, activity in
15 states, overhead 25% or less). In addition to meeting CFC criteria, the
applicant agency must certify and provide evidence that:

1,

Its combined administrative costs plus fund raising costs, as
reported on its current IRS Form 990 return, are under 25% of total
public support and revenue. An agency that was under 25% last
year but een 25% and 30% this year may be granted a one-year
exception based on good cause. There are no exceptions for agencies
over 30%, or for a second time exception over 25%. (Difference with
CFC is that Director of OPM has authority to make exceptions for
agencies over 30% .)

In addition to meeting the CFC "15 state" test to determine national
presence, the applicant must also meet ICA's "substantive program"
test. To pass test the applicant must present evidence that a
"reasonable donor* would find that the applicant has a pro; that
is (a) substantial; (b) benefits a national treasure, or national interest,
and national constituency.

For CFC eligibility, the Form 990 is conclusive. For ICA, in
addition, the form 990 numbers must match those presented in the
audited finandal statement. That means that audits must be
completed so that the public can easily see what the auditors say is
spent on program and what is spent on overhead.

CFC does not differentiate between ‘in-kind" donations/ "in-kind"
rogram com to "cash* donations/ *cash” program. ICA does.
Tne reason ICA does is that the value of in-kind” income/program is

subject to dispute. Cash is not. ICA first requires applicants to
report their ‘in-kind’ donations/program under the standards
promulgated by the Association of Evangelical Relief & Development


18

nitions that could help us in better defining eligibility as a real
charity and not an advocacy group?

Ms. GREEN. Well, all of the charities that we deal with have to
meet eligibility criteria, as you stated, not oniy those of the IRS but
also the CFC regulations and legislative criteria and all of that. So
short of being very specific about which charities you want included
and which you don’t, there’s always going to be a gray area in the
definitions.

There are some gray areas now that we're trying to clear up in
proposed regs that we have now. So I think more specificity—being
very specific would assist in not having the litigation such as we've
had in the past.

Mr. Mica. So you say there are some gray areas, and there are
some areas that you are having problems with in defining their eli-
gibility.

Ms. GREEN. We’re not having problems now—-

Mr. Mica. But you did state that there are-———

Ms. GREEN [continuing]. In defining their eligibility criteria.

Mr. Mica. So that there are some gray areas. What did you mean
by that?

Ms. GREEN. In defining—well, for the health and human welfare
part of it, we don’t have the problems in defining eligibility based
on a definition.

Mr. Mica. Well, some of these advocacy groups, for example:
Firearms Civil Rights Legal Defense Fund, American Civil Liberty
Unions Foundation, the Federation for American Immigration Re-
form, and the National Abortion and Reproductive Rights Action
League Foundation. These are all advocacy groups. How do they
qualify?

f Ms. GREEN. They meet the criteria for human health and wel-
fare.

Mr. Mica. And you don’t find that within your rulemaking ability
to limit these advocacy groups?

Ms. GREEN. Again, as I mentioned in my opening statement, the
definition of human health and welfare would be the issue—we’re
saying that it affects human health and welfare. So, using the cri-
teria that we have if those organizations meet that criteria for eli-
gibility—affecting human health and welfare——

Mr. Mica. Again, based on the historical experience, I believe
that you can either set these standards by statute or by law or by
court decision. You have no recommendation to us at this time for
any changes to better clarify the definitions legislatively and you
don’t have the power to do that by rule; is that the case?

Ms. GREEN. We don’t have the power to do it by rule.

Mr. Mica. And you have no recommendation to us to change it?

Ms. GREEN. Well, one of the things that we use is to consider the
type of services rendered to the beneficiaries—that always makes
it clearer for us. We look at basic human health and welfare look-
ing at the t; of services that are rendered, using a common sense
definition. So, no, we don’t have any other recommendations as far
as definitions.

Mr. Mica. I don’t want to consume all of the time. I will yield
now to Mr. Mascara for his questions.


47

© __Overatl, 71.5% of the federal employees said they “are satisfied with the way
the Combined Federal Campaign is run.”

&@ A strong majority of the federal employees, 66.3%, do not “feel Congress
should limit the types of charities that you can support in the Combined Federal
Campaign.”

ZA plurality of federal employees, 38.5%, would be less likely to contribute to
the Combined Federal Campaign if the types of charities that could receive
donations were significantly reduced. In contrast, only 28.9% said they would
be more likely to contribute, while 20.8% were “not sure.”

CONCLUSIONS

‘The old saying, “if it isn’t broke, then don't fix it” is the perfect axiom for the
‘Combined Federal Campaign. The results of this survey clearly show that the
Combined Federal Campaign, it its current form, enjoys a great deal of support among
federal employees. In fact, there would be strong levels of resistance to any
Congressional actions which limit the types of charities federal employees can choose
to support by workplace giving. Any new limitations on federal employees
contributory options would, in all likelihood, result in a significant decrease in
participation. In conclusion, it is clear the Combined Federal Campaign is an
extremely popular program which allows federal employees to contribute to their
favorite charities in a comfortable manner.

‘Combined Federal Campaign Survey
June 6, 1995
Page?


51

Mr. HOWLAND. An amazing 93 percent of Federal employees ap-
proved of continuing to allow Federal employees the right to vol-
untary make charitable contributions through workplace giving to
the charities of their choice. Nearly 8 of 10 respondents strongly
approved of continuing this practice, which demonstrates a clear
intensity of support for this issue.

And almost 9 of 10 respondents believe that Federal employees
should be able to choose to support, through the Combined Federal
Campaign, charities that speak out on behalf of the people they

elp.

T encourage you to retain criteria for admissions in the Combined
Federal Campaign as they are crafted today. This is no time to
heap an intricate quagmire of regulations ‘and. definitions on a mar-
ketplace that has served extraordinarily weil. Federal employees
are extremely capable of choosing charitable organizations to whom
they give their hard-earned salaries.

Mr. Mica. I thank you, Mr. Howland.

(The prepared statement of Mr. Howland follows:]


80

Nevertheless, the total benefits obtained for its clients over the filteen years in which LDF
has participated in the CFC have been in excess of $500,000,000 — more than half. billion
dollars. During the same tine, LDF’s total budget has been approximately $100,000. In
‘other words, LDF's program has provided more than 5 times in direct benefits than it has
expended to carry out that program. We challenge any so-called “traditional” charity to
match this record

But these mumbers do not begin to measure the actual value of the benefits our
clients receive. In addition to measurable amounts in back pay, and expenditures for
improved schools, housing, and health care, our clients have received jobs and promotions
that will give them income that will lift them out of poverty and into the ranks of tax
payers, as well as immeasurable benefits in improved education, decent housing, and better
health.

Finally, the Legal Defense Fund administers scholarship programs for undergraduate
and law students. In recent years we have provided berween $400,000 and $500,000 per
year in scholarship aid to deserving students,

u.
THE NAACP LEGAL Drrense FUND Is Not A "Lopayist” ORGANIZATION

‘As 501(¢)(3) organizations, the NAACP Legal Defense Fund and similar
‘organizations are subject to strict controls on legislative activities. The Legal Defense Fund
adheres to these limitations scrupulously, and has never exceeded them. We do some
lobbying in that we support or oppose legislation that we believe will either further or
hhinder our basic purpose of achieving equal civil rights for all Americans. So-called
“wraditional" charities also conduct limited lobbying activities consistent with the Internal
Revenue Code.

The term “advocacy groups” is vague and, we suggest, not particularly helpful
Charities of all sorts act as "advocates" for their clientele and for causes that will benefit
their clientele. Federal employees or taxpayers may disagree with the goals of one or more
charity, in fact, there is substantial disagreement with the goals and purposes of even the
most “traditional” charities. However, there is no evidence that we are aware of that such
disagreement has resulted in a decline in contributions or any degree of controversy in the
CFC.

TM.
‘THE NAACP LEGAL DEFENSE FUND DOES NOT SEEK OR RECEIVE
ANY GOVERNMENT SUBSIDIES,

The Legal Defense Fund has deliberately, throughout its history, declined

3


142

During the past several campaigns where we have been in at-
tendance during solicitation meetings with donors, there have been
a number of complaints regarding the size and volume of the bro-
chure. Some fed donors seem overwhelmed. With each new cam-
paign there are many new agencies added and there doesn’t seem
to be any end in sight. Speaking with CFC friends in San Diego,
they suggest that any action to restrict the number of agencies par-
ticipating in CFC would be a positive move.

One of the most important components for participation in the
CFC campaign is a requirement that the organization is a human
health and welfare organization which provides services, benefits
or assistance to or conducts activities affecting human health and
welfare and enumeration of these benefits should be documented.
That is out of the rules and regulations May 26, 1988, 950.203(6),
which is under the public accountability standard section in the
regulations.

rior to the 1988 rules and regulations, agencies applying to par-
ticipate in the annual CFC campaign were required to provide
more definitive information on the services they provided and how
these services benefited the community. Although such a task re-
quires more effort to produce during application time, it might be
well to again consider such a standard in the future.

The wording of 950.203(6) needs to be revised to better define the
conditions an applicant agency must meet to qualify as a human
health and welfare organization. The current approach tends to
allow many 501(c)(3) nonprofit organizations without regard to the
intent of 950.203.

We support the continuation of Federal employees running the
CFC campaigns by serving as loan executives, key workers and
group coordinators and maintaining the current policy that only
Federal employees can solicit other Federal employees. This helps
to separate the Combined Federal Campaign from other annual
charitable drives, and we believe this is very important.

San Diego CFC dollars have decreased each year beginning with
the 1992 campaign. These decreases can be directly attributed to
loss of potential donors due to downsizing and base closures. De-
-ereases in San Diego NVHA designations during this 5-year period
from 1990 to 1994 also has been impacted by the downsizing. How-
ever, it is also apparent that the inordinate increases in organiza-
tions that have been deemed eligible to participate have also im-
pacted on the donations to these traditional charities.

We applaud Congressman’s Mica’s notion of restoring the CFC to
its proper status as vehicle for solicitation by traditional charities
providing direct benefits to human health and welfare and we
again commend you for your interest and I thank you for being
able to be here this morning.

[The prepared statement of Mr. Burrus follows:]


135

=~
501(h) of the Internal Revenue Code. It also apportioned the distribution of undesignated
ifs.”

By May 1988, when OPM promulgated new rules conforming to the mandates of FY
1988 Continuing Appropriations Act, the agency was exhausted:

In the near decade of controversy that has beset the CFC there have remained
principled voices of reason that have repeatedly pointed out that controversies, however
satisfying, were achieved at a real cost to those least able to bear it: the poor and the
sick. With the promulgation of these rules, it is OPM's hope that an era of cooperative
endeavor will being that allows the full beneficent force of the Federal workforce to
address itself to the alleviation of their needs."

Anticipating still further litigation over the few limiting standards of eligibility that remained,
OPM pleaded “that courts confronting such challenges will recognize from the outset of litigation
that this set of rules was developed in close cooperation with Congress, and that it is anticipated
that the rules will operate to provide fair but not universal access to the campaign."” Further
litigation, at least of dramatic proportions, has in fact nor materialized, and for a simple reason:

The major political advocacy and legal defense organizations have won the day. OPM

completed its 1988 capitulation with an apology for its defense of President Reagan's 1983

© Id. § 618(b)(1)(A).

Id, § 618(b)(6)(B). The allocation formula mandated for every local
‘campaign in the United States includes a fixed 82% share for the United Way, a
7% share for the International Services Agencies, a 7% share for the National
Voluntary Health Agencies, and a 4% share to be distributed, within broad limits,
by the Local Federal Coordinating Committee. OPM was given authority to
modify these allocations in light of future campaign experience.

53 FEDERAL REGISTER 19146 (May 26, 1988). The full text of the 1988
rule is set forth at the Appendix, Exhibit 32.

@ 53 FEDERAL REGISTER at 19146.
Ibid.


13

For 1994, these included $300,000 for a small staff,
about $350,000 for the Inspector General's random audits, and 25
compliance reviews, performed at a cost of $81,000.

Thus we estimate our direct costs for 1994 at a total of
$731,300.

A larger amount is devoted to indirect costs. We are
dealing here with fixed costs and employees’ time. The cost of the
campaign does not significantly differ if we include a hundred

or a thousand. To arrive at a total figure for indirect
ust estimate of the value of time donated by federal

Let me note, Mr. Chairman, that the 1988 Report of the
Director’s Task Force on the Combined Federal Campaign estimated
that the campaign that year cost between §55 million and $60
million. However, we strongly believe the methodology used in that
Report was seriously flawed. For example, it assumed one keyworker

for every ten Federal employees and that the average keyworker vas
a GS-9.

We find those and other assumptions to be highly
questionable. one major problem with the Report is that it based
most of its assumptions on the National Capital Area Campaign,
which is not at all typical of most of the more than 400
canpaigns.

‘The Report assumed that every hour spent on the CFC is an
hour lost by the government. We do not share that assumption.

Employees often work on their own time, such as their
lunch break. They often make special efforts to combine their work
on the campaign with their normal duties.

Unlike the 1988 Report, we do not assume the campaign has
a negative impact on productivity. We believe the campaign has a
positive impact. A successful CFC drive is a matter of great pric
to thousands of federal employees. I think that Kind of enthusiasm
should be encouraged.

Mr. Chairman, the 1988 Report concedes at the outset that
"it is impossible to quantify" the cost of the campaign.

It proceeds, however, to make its estimate of $55
million or $60 million, based on very questionable assumptions.

We have, since receiving your inquiries, taken a close
look at the indirect costs of the CFC campaign.


187

-26-
‘The Purpose of the CFC
Against this background, let me turn to the three questions expressly presented to me by
Chairman Mica’s letter of invitation for succinct replies.
‘The first asks, "What in your view, should be the central purpose of the CFC?"
I could not state the purpose of the CFC any better than did President Reagan in
Executive Order No. 12404:

The objectives of the Combined Federal Campaign are to lessen the burdens of
government and of local communities in meeting needs of human health and welfare;
to provide a convenient channel through which Federal public servants may contribute
to these efforts; to minimize or eliminate disruption of the Federal workplace and costs
to Federal taxpayers that such fund-raising may entail; and to avoid the reality and
appearance of the use of Federal resources in aid of fund-raising for political activi:y or
advocacy of public policy, lobbying, or philanthropy of any kind that does not directly
serve needs of human health and welfare.”

Taxpayer Subsidization
Chairman Mica's second question comes in several parts, as follows:

‘The CFC is subsidized by the taxpayers in many ways. They pay the salaries and
benefits of federal employees who run the campaign as “loaned executives" or key
workers, who actively solicit contributions from their fellow empioyees at the workplace.
They pay for the time federa! employees spend attending “kickoff” meetings at which
other federal employees, including agency heads, encourage donations and employee
participation. 1s it proper to have taxpayers subsidize in these ways fund raising drives
for charities? For ideological advocates, many of which are quite controversial and with
which many taxpayers vigorously disagree? For groups that proselytize in order to
increase the number of adherents to their particular beliefs, whatever they may be?

A key to the Supreme Court's decision in Cornelius was its finding that [t]he historical
background indicates that the Campaign was designed to minimize the disruption to the

workplace that had resulted from unlimited ad hoc solicitation by lessening the amount of

7 Executive Order No. 12404, § 1(b)(1).


55

endent Charities of America
Feceral Campaigon History

1988 ICA 20 Members - $7,187,628
1989 ICA $2. Members $20,356,160
1990 ICA 79° Members $12,389,820
1991 ICA 132 Members $17,876,450
1992 ICA 169 Members $16,547,200
CCA 44 Members $ 5,381,000

WSOA 30 Members = $1,500,900
743 Members 333,439,100
1993 ICA 178 Members . $11,256,800
CCA 78 Members $ 7,050,-00

WSOA 53 Members $ 1,585,200

MRAA 31 Members $ 6,030,300

340 Membe:s $25,923,909

1954" s 108 Membezs 3 8,859,611
92 Members $12,162,599

SOA 44 Members $1,958,962

MRAA 31 Members S 8,828,005

AFA 17 Members $ 4,076,335

WCA 20 Members S 656,711
MYPPSOA 15 Membezs $ 2,032,859

H&CROA 25 Membezs $ 1,053,277

CSOA 29 Members $3,098,837

381 Memoers $42,709.316

* Donations for 1994 Are Unaudited

1995 ICA 32 Members
CCA 89 Members
WSOA 39 Members
. MRAA 32 Members
AFA 18 Me
WCA 29 Members
20 Members
H&CROA 33 Members
A 42 Members
CPCA 21 Members
EAL 19 Members
HCA 42 Members
“Wie Members
ICA t Charities of America
CCA 's Charities of America
WSOA World Sexivice Organizations of America
MRAA Research of America
AFA’ Antmal Funds of America
WCA ‘Women's Charittes of
MVPPSOA Miltary Veterans and Patsotic Public Service
Organizations of
HE&CROA Human & Qvil Ged ais rte cons of of Amertca
0 Christian Service tion of America
CPCA Conservation & Preservations Charities of America

Educate Americal
Health Charities of America

Page 5

[SC


2

many would think of policy advocates issuing position papers on is-
sues before Congress.

Without exception, I believe taxpayers would be appalled to learn
that their tax dollars were underwriting the current hodgepodge of
objectionable activities. In fact, the average taxpayer in my dis-
trict—I just came back from a nice long recess and a lot of time
with these folks—but I believe that the average taxpayer in my dis-
trict would croak if they knew that tens of millions of his or her
hard-earned dollars were underwriting some of these programs and.
activities.

As I said, the CFC was originally established as a charity drive.
The organizations participating were human health and welfare
agencies such as the Red Cross, the National Association for Re-
tarded Children, and the United Cerebral Palsy Association. Begin-
ning in the 1980's, however, the character of the CFC was changed.
Although the CFC is still commonly referred to as a charity drive,
it would be more accurate to say that the CFC is now a fundraiser
for nonprofit organizations that qualify for tax exemption under
section 501(c)(3) of the Internal Revenue Code.

In 1980, the Reagan administration and others knew that the
CFC was headed in the wrong direction. Advocacy groups got their
foot in the door then, and they used the courts and congressional
pressure to continue what I term as a bad policy. As a result of
court decisions and congressional action, many political and ideo-
logical advocacy groups now participate in the CFC.

The views represented by these organizations span the range of
political and ideological spectrum. Some are very liberal while oth-
ers are very conservative. Some are my personal friends and some
are not my friends. But wherever they fall in the political ideologi-
cal spectrum and whatever the issues they address, many of the
causes these groups champion are extremely controversial.

In some instances, their entry into the CFC caused a great up-
heaval, including boycotts and threats of boycotts. Some of these
groups litigate to advance their causes through the courts. Others
use funds to sell the public on their particular special interests or
ideas. But the one thing they all have in common is that they want
to influence public policy.

Also, other groups participate now that are not as focused on
human health and welfare or at all connected to human health and
welfare, and their connections can be regarded as tenuous at best
and often debatable.

When President Reagan attempted to return the CFC to its origi-
nal role of helping agencies, he issued two Executive orders. Execu-
tive Order 12404 proposed to limit participation in the CFC to
health and welfare organizations, and specifically excluded groups
that, “seek to influence the outcomes of elections or the determina-
tion of public policy through political activity or advocacy, lobbying
or litigation.”

President Reagan noted that he took action to “avoid the reality
and appearance of the use of Federal resources in aid of fundrais-
ing or advocacy of public policy, lobbying or philanthropy of any
kind that does not directly serve the needs of human health and
welfare.


174

SLLPERGELD,
WASHINGTGN OFFICE C2-DIRECTOR
RS UNION OF 1.8... INC,

Consumers Union of U.S., Inc.,' respectfully submits this
statement and requests that it be included in the record of the
hearing held by the Subcommittee on June 7.

Consumers Union is opposed to any change in the rules of the
Combined Federal Campaign that will reduce the choices of federal
employees among the nonprofit organizations to which they can
contribute through the campaign. How ironic and how wrong it would
be for a Congress that has made personal responsibility one of its
primary themes to seize responsibility away from individual
contributors and limit their choices to a narrower list of
organizations that may be contemporarily viewed by the Congress as
"appropriate".

Consumers Union provides direct services to individuals by
providing information and advice about products and services. Yet,
we are deeply concerned that because we also provide information
about ecouomic and public policy issues that affect consumer
welfare, and advocate a consumer point of view on those issues,
changes along the lines suggested by the Chairman would affect our
eligibility to remain a part of the Combined Federal Campaign. We
currently receive about $100,000 in voluntary, individual
contributions through the campaign. The views expressed by the
Chairman indicate that, if the CFC rules were revised as he
indicates he would like them to be, our organization may well stand
to lose these contributions. and the federal employees who choose
us as a recipient of their donations would stand to lose the
opportunity to exercise their choice in the convenient way that the
CFC has established.

Employees’ choices and recipients’ rights to receive gifts
should not depend upon whether the recipients express views about
public policy, to the public or to the Congress. Implicit in the
suggestions to change the CFC rules is that there is something
wrong with advocacy. That is not so. The expression of views

‘ Consumers Union is a nonprofit [Section 501(c) (3)] membership
organization chartered in 1936 under the laws of the State of New
York to provide consumers with information, education and counsel
about goods, services, health, and personal finance; and to
initiate and cooperate with individual and group efforts to
maintain and enhance the quality of life for consumers. Consumers
Union’s income is solely derived from the sale of
ita other publications and from noncommercial contributions, grants
and fees. In addition to reports on Consumers Union's own product
testing, Consumer Reports with approximately 5 million paid
circulation, regularly, carries articles on health, product safety,
marketplace economics and legislative, judicial and regulatory
actions which affect consumer welfare. Consumers Union's
publications carry no advertising and receive no commercial
support.


198

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163

crc’s] wide range of choices" and that the CFC is not "in need of
major changes."? Importantly, survey results show that

reducing the types of charities that are eligible to receive CFC
donations would actually make many federal employees less likely
to contribute to the cFC.*

Even if we agreed that further restricting CF¢ participation
was advisable, which we do not, imposing additional CFC
eligibility restrictions related to advocacy is unnecessary. The
campaign’s current national eligibility requirements ensure that
participating charities meet the standards of tax-exempt
organizations as defined by Internal Revenue Code section
501(c)3, and that they serve human health and welfare. The IRS
restrictions are ample, ensuring that purely political
organizations and groups that do substantial lobbying do not
participate in the campaign. The IRS rules are accepted and
clear, making enforcement by OPM simple and cost-effective.

Any additional restriction on "advocacy" activities would,
by definition, be subjective in nature, making it difficult to
understand, implement, and enforce. For example, many critics of
the current campaign structure advocate restricting CFC
participation to so-called "traditional health and welfare
groups." It is not possible to distinguish, however, among human
health and welfare organizations, including hospitals, food
banks, children’s health groups and others, all of whom advocate
in various public fora on behalf of the interests of people they
serve. It would simply be confusing to charities and federal
donors alike. ‘Thus, instead of benefitting the campaign and the
workplace, further restrictions related to "advocacy" would
inevitably throw the CFC back into controversy, affecting
employee morale, the spirit of volunteerism, the total charitable
contributions raised, and the reputation of the CFC as a model
charity drive.

D. imiti f ipati rot
Does Not Reduce CFC Costs to the Taxpayer

The total cost of the CFC program has been criticized
(mistakenly, we believe) as a federal “subsidy” to the campaign.
Critics, however, seem to miss the point that in this instance

> Statement of Honorable Lorraine Green, Deputy Director,
Office of Personnel Management, before the Subcommittee on Civil
Service Committee on Government Reform and Oversight, U.S. House of
Representatives, June 7, 1995, pp. 2,3.

. * A plurality of 38.5% of federal employees said they would
be less likely to contribute, while only 28.9% said they would be
more likely to contribute, and 20.8% were "not sure.“ Fabrizio et

al., supra, note 3.


12

All three of these agencies I mentioned currently participate in the CFC, but because in the
course of their operations they also follow the command of Holy Scripture to witness to the truth
of the Gospel, might they be branded as advocacy groups? Hence, under the proposed revisions
to CFC regulations, will you make them ineligible to participate? And if the answer this year
is no, we didn’t mean them, what will different people decide next year? How can you separate
‘an agency’s motivations from their actions? Our donors understand the two are inextricably
linked, and in fact they tell us this is one of the principal reasons they support us. Would you
ask our agencies to deny their faith to have access to the CFC? Would you deny our donors
with the information they need to give in accordance with the dictates of their conscience?

It seems to me we will be treading on a very slippery slope should the government decide to
impose such a “no advocacy* test to determine CFC eligibility. No matter what one’s point of
view, it all adds up to politicizing the CFC, which can only result in donors walking away and
people being hurt.

I came to participate in the governance of Independent Charities of America and Christian
Service Organizations of America for two reasons, The first reason is that these federations
were primarily formed for the benefit of the donors, not the agencies. They fight to keep
overhead costs low and to provide donors with the widest possible choice of organizations from
which to select, yet they protect donors by ensuring that only legitimate, well governed charities
wear the federation’s label. It was important to me, as a leader, to be able to assure my sailors,
who often gave not out of their excess, but out of their sustenance, that these organizations were
being good stewards of their money and that their dollars would accomplish the purpose they
intended.

The second reason I chose to participate in Independent Charities of America and Christian
Service Organizations of America governance was to help their charitable agencies do the
greatest amount of good. I think that most of the charities in the CFC are very worthy of


2

that provide services to the most needy “people in need" and
worthwhile groups and programs in the country.

So what kind of message are we, as lawmakers, giving
the parents of school children, the hungry, and the people in
need with this proposal? Of the hundred or so letters and
phone calls received in my office, none of them were in favor
of changes to the CFC. The phone calls suggest, “What's
next? They‘re cutting pensions, education, and medicare.
Now, they’re going after charities.”

1 know and respect Chairman Mica, and | believe his
proposal is well-intended. However, we should be promoting
service to others and encouraging giving. The perception this
Proposal gives too many, including my constituents, is the
contrary.

Mr. Chairman, let’s rethink this proposal while there is
still time.

This concludes my statement. | look forward to hearing

from the witnesses.


10

‘Testimony of Captain Jemee Hollenbach 2
for the House Civil Service Subcommittoe
on the Combined Federal Campaign

Mr. Chairman and distinguished members of the committee, I thank you for the opportunity to
share my observations regarding the Combined Federal Campaign, a subject of significant
importance to members of the federal work force and to the people of our nation as a whole,

Thave served on active duty in the United States Navy for the past 25 years and am currently
assigned to the office of the Secretary of Defense. However, I am testifying not in any official
capacity, but rather as an individual member of the Armed Services who has been intimately
involved in CFC operations throughout my career. That involvement falls into four categories:
1 As an individual donor

2. AS. manager of CFC operations within my commands

3. As a recipient of benefits from CFC-funded charities

4. As an unpaid volunteer involved in the governance of CFC federations.

In this last category I have served as a member of the Board of Directors of Independent
Charities of America, and I now serve as President of one of the newer CFC federations,
Christian Service Organizations of America (which made $3.1 million from the CFC in 1995).

The history of the CFC is rich with evidence of federal workers, the donors, fighting for
inclusion of an ever greater choice of charities to which they might contribute. That drive by
the donors has succeeded and has been reflected by the success of the CFC as a whole. I have
been through several iterations of the CFC in my naval career, and I can tell you that the current
arrangements, regulations, and practices are the best I've seen. We can choose from among a
very broad range of national and intemnational charities and, while each of us will find in the
CEC campaign brochure many charities we disagree with or flat out dislike, we are also assured
of finding all the ones we do care about. We have a very broad right to choose; each individual
can decide which agencies are deserving of their gifts.

Although one can find occasional grousing about the difficulty of making a choice among the


146

SAN DIEGO COUNTY NVHA AGENCIES LISTING LOCALLY
Anil 28, 1995 Attachment A.

ALS ASSOCIATION (LOU GEHRIG'S DISEASE) ORANGE COUNTY CHAPTER
ALZHEIMER'S ASSOCIATION OF SAN DIEGO
AMC CANCER RESEARCH CENTER
AMERICAN DIABETES ASSOCIATION CALIFORNIA AFFILIATE,
SAN DIEGO CHAPTER
AMERICAN LUNG ASSOCIATION OF SAN DIEGO & IMPERIAL COUNTIES
AMERICAN PARKINSON DISEASE ASSOCIATION
ARTHRITIS FOUNDATION SAN DIEGO AREA CHAPTER
CYSTIC FIBROSIS FOUNDATION -SAN DIEGO
AND IMPERIAL COUNTIES CHAPTER
EASTER SEAL SOCIETY OF SAN DIEGO COUNTY
EPILEPSY SOCIETY OF SAN DIEGO COUNTY
HEMOPHILIA ASSOCIATION OF SAN DIEGO COUNTY
HUNTINGTON'S DISEASE SOCIETY OF AMERICA, SAN DIEGO COUNTY CHAPTER
JUVENILE DIABETES FOUNDATION INTERNATIONAL,
ORANGE COUNTY CHAPTER
LEUKEMIA SOCIETY OF AMERICA, INC.
LUPUS FOUNDATION OF AMERICA, SOUTHERN CALIFORNIA CHAPTER
MARCH OF DIMES BIRTH DEFECTS FOUNDATION
MENTAL HEALTH ASSOCIATION, SAN DIEGO COUNTY
MULTIPLE SCLEROSIS SOCIETY, NATIONAL / SAN DIEGO AREA CHAPTER
MUSCULAR DYSTROPHY ASSOCIATION
MYASTHENIA GRAVIS FOUNDATION, CALIFORNIA CHAPTER
NATIONAL KIDNEY FOUNDATION OF SOUTHERN CALIFORNIA
SAN DIEGO REGION
NATIONAL NEUROFIBROMATOSIS FOUNDATION, CALIFORNIA CHAPTER,
NATIONAL SPINAL CORD INJURY ASSOCIATION - SAN DIEGO COUNTY CHAPTER
PREVENT BLINDNESS, SOUTHERN CALIFORNIA
SICKLE CELL ANEMIA EDUCATION AND INFORMATION CENTER
ST. JUDE CHILDREN'S RESEARCH HOSPITAL
SUDDEN INFANT DEATH SYNDROME FOUNDATION OF SOUTHERN CALIFORNIA.


Page Four

In the CFC, the federal government spends nothing for
campaign materials, employee incentives, for processing pledge
cards, or in matching gift contributions. In the private sector,
companies spend millions of dollars in these areas as part of
their workplace giving campaign.

‘Thousands of corporations and their employees view workplace
campaigns as a demonstration of their social responsibility.
‘Their shareholders understand the importance of charities in their
communities and support campaigns that solicit 80-100 million
employees annually.

Some may view a workplace campaign as a subsidy to charities.
For others, the “contribution” or “investment” by employers
permitting a workplace campaign is a demonstration of the caring
and sharing that makes our country so unique and special.

‘At a time when we are all concerned about doing things
better, smarter and cheaper, workplace campaigns are not only
valued by employees, but they are the most economical form of
fundraising available to charities

Finally, I believe that the concept of advocacy is being
viewed inappropriately in the debate around the CFC.

Wone of the charities currently participating in the CFC are
political advocacy organizations. | None support political
candidates, As public charities, sone do lobbying to the degree
allowed by the tight restrictions placed on charities by the IRS.

The American Foundation for the Blind (A¥B) is member of
America’s Charities. AFB was Helen Keller’s organization. AFB’s
focus 49 to help the blind and visually impaired achieve equality
of access and opportunity. It has distributed millions of Braille
books and material

In addition, a omall part of AFB‘ work is to monitor federal
legislation, regulations and court decisions and to provide
Anformation to policymakers on critical issues affecting persons
who are blind or visually impaired. These are valued and vital
advocacy activities for millions of Americans.


20

Mr. Mica. But by their own testimony here today they have testi-
fied that it is 11 percent, and $21.2 million is their best guess-
timate today. I question that, because in 1988 they had a larger
figure and I have not seen the cost of anything in government or
business go down in that timeframe.

Thank you.

Ms. GREEN. We do feel

Mr. Mascara. You want to explain the $731,000 you were talk-
ing about?

is. GREEN. Let me just start, and I will let Ms. Hall complete
the thought on that.

I do want to state again that our figure is a very generous
amount. It is our best estimate. But we also are reluctant to say
that an employee’s time spent on CFC is not time spent working
for the government—because we don’t feel that every hour they
spend on CFC is not a productive hour. And the $55 million to $60
million figure in the 1988 study certainly exaggerated the value of
the employees’ time. They utilized many more key workers in their
estimate and also a higher grade level which we have not been able
to substantiate.

Ms. Hall.

Ms. HALL. The difference in our two costs is that the first
amount, the approximately $730,000, are the direct costs for my of-
fice, the IG audits and the compliance reviews. Those are the ac-
tual costs of appropriated funds.

The estimated amount—the remaining amount which was com-
pared to the $50-$60 million amount—is based on the value of
time for people who participate in and support the campaign. And
the difference is not that the costs went down over the years but
the assumptions that were made in 1988 resulted in exaggerated
amounts.

And that is because they used the national capital area, which
is a unique campaign unlike most of the current 435 campaigns.

In addition, back in 1988 there were approximately 536 cam-
paigns, so that required more workers. The LFCC’s, the local Fed-
eral officials who make eligibility determinations, there were more
of them because you had more campaign:

In addition, they assumed high prade, levels. We know that the
key workers, the people who pass out the pledge cards, are rel-
atively low-graded employees. They assumed a grade level of a GS-

Even our numbers are generous. We assumed all employees on
LFCC’s were at a grade level of GS-15. And we know, nationwide,
there are not that many GS—15’s. So our numbers are a very good-
faith effort to come as close as possible to accuracy, and we've ex-
plained all the distinctions.

Mr. Mascara. Well, the CFC task force report of 1988, says it
is impossible to quantify precisely the dollar amount of that sub-
sidy. And I guess it’s my training—I’m not from Missouri. I’m from
Pennsylvania. Show me. I want to see. Someone has to show me.

We have a tendency and proclivity to throw numbers around
here in DC. Even as a new Member, I learned very early on to
watch out. Someone will say $10 billion or $15 billion; and when
you ask about it, it is really not $10 or $15 billion. It is this or that.


37

Mr. Mica. Well, thank you, and we welcome your comments.

Just in response, we do have the statistics on the number of peo-
ple who participate. It is down now to 47.9 percent from when it
originally began as a charity drive. In 1965, 88.7 percent of the
Federal employees participated.

So we are looking at all the aspects of what is going on with the
campaign; and, hopefully, we can improve its charitable giving and
participation. And it does have many worthy aspects.

Again, we thank you for your opening comments, Mr. Moran.

Do any other members of our panel have any additional ques-
tions for our two witnesses? If not, we do have plenty here to chew
on so we will thank you for your participation. We may have some
additional questions that we would like to submit to OPM, and we
look forward to both your voluntary and your forced participation
in the process.

Thank you, and you are excused.

And now, I would like to next call our second panel.

In our second panel we have Dr. David O’Steen, executive direc-
tor of the National Right to Life Committee. We have Mr. Michael
R. Howland, president of the Independent Charities of America;
Mr. Don Sodo, executive director of the America’s Charities; Capt.
James W. Hollenbach, Christian Service Organizations of America;
and Mr. Charles Stephen Ralston, senior staff attorney at NAACP
Legal Defense Fund.

Tf you gentlemen would come up and assume the positions with
your nameplates there, I ask you to please stand. It is the custom
of this subcommittee and our full committee because of the nature
of our work to swear in our witnesses, so if you would stand and
raise your right hand.

[Witnesses sworn.]

Mr. Mica. Thank you. We welcome you to the committee. And let
the record reflect that the witnesses answered in the affirmative.
We will start immediately.

Mr. O’Steen, as soon as you are seated here, we will call on you,
and will work right down the panel. Thank you so much for partici-
pating. Dr. O’Steen, go right ahead.

STATEMENT OF DAVID N. O’STEEN, EXECUTIVE DIRECTOR,
NATIONAL RIGHT TO LIFE COMMITTEE; MICHAEL R.
HOWLAND, PRESIDENT, INDEPENDENT CHARITIES OF
AMERICA; DON SODO, EXECUTIVE DIRECTOR, AMERICA’S
CHARITIES; JAMES W. HOLLENBACH, CHRISTIAN SERVICE
ORGANIZATIONS OF AMERICA; AND CHARLES STEPHEN RAL-
STON, SENIOR STAFF ATTORNEY, NAACP LEGAL DEFENSE
FUND

Mr. O’STEEN. Right. Thank you. I’m David O’Steen, executive di-
rector——

Mr. Mica. If you have a lengthy statement, we will be glad to
make it part of the record. If you could summarize it, we would ap-
preciate it so much. Thank you.

Mr. O’STEEN. Yes. I’m David O’Steen, executive director of the
National Right to Life Educational Trust Fund. And, first, I had
like to express my sincere appreciation to the chairman for the
ability to speak with you here today and to the committee.


157

Mr. Mica. Mrs. Morella would like to submit additional written
questions to this panel and the other panels and, without objection,
and with your cooperation, that will also become part of the record.

We also have a request for additional written testimony to be
submitted as part of the record and I will keep the record open
until June 21, if others would like to submit testimony for the
record and without objection, that is so ordered.

There being no further business before the Civil Service Sub-
committee, this meeting stands adjourned. Thank you.

[Whereupon, at 1:05 p.m., the subcommittee was adjourned.]

{Additional information submitted for the hearing record follows:]


57

Organizations (AERDO). These are the toughest standards currently
available. ICA then calculates overhead without including *in-kind"
valuations, but only cash contributions/programs. If the cash-only
overhead is above 25%, the agency is held to additional scrutiny.

Current GAAP mules allow agencies to allocate joint costs of fund
raising/public education. (example: A telethon educates the public
about an icy's work and also asks for money). CEC accepts the
auditor's allocation. ICA allows no allocation above 50% to public
education, regardless of the auditor's finding.

For CFC purposes, an agency must print an annual report to the

public. For ICA, an agency must also complete a special annual

TepOrt, which ICA designed. The ICA-report is the one sent to
jonors.

Finally, ICA has a ‘sniff-test" procedure. An applicant can meet all
technical requirements and still be denied if the admissions
committee has any reason to believe the eligibility evidence
presented is not credible. ICA has an “inclusiveness” eligibility
policy, but the burden of proof of meeting eligibility is on the
applicant.


23

HONORABLE CONSTANCE A. F MORELLA

Laren EES nse yexor

SUBCOMMITTEE oN gw. SERVICE

1 would like to thank Chairman Mica for calling this
hearing -- and for the influx of mail and phone calls received
in my office since the announcement of his proposal to
narrow the scope of CFC eligibility. I’m currently
contemplating the most appropriate way to -- thank him.
Maybe a rubber stamp labeled, "Respectfully Referred to
Chairman Mica,” would be most civil.

Nevertheless, here we are discussing the "Combined
Federal Campaign: Lawyers and Lobbyists vs People in
Need?" Clearly, "people in need" and "lawyers and
lobbyists” are inextricably linked to one another. But, that is
a debate for another day. Today, my concerns are for the
CFC program, Federal workers, and taxpayers.

The continuous improvement of governmental programs
and policies is playing a vital role in keeping our government
responsive to the people. But, the saying, "if it ain't broke,

don’t fix it," still has relevance, even in this Government,


144

SDE Lesting rts
Presented 1» Cominutice on Government Reforms and Osersight
‘Sub-Commiltee on Civil Service

Page ?

June 7, 1995

The San Diego County Committee/NVHA is a group of local traditional charities that directly
benefit human health and welfare. We are concerned with the numerous political advocacy groups
and other organizations that do not directly benefit human health and welfare The SDCC supports
Congressman Mica's efforts to restrict the Combined Federal campaign to charities that can demonstrate that

they directly benefit human health and welfare

We believe the central purpose of the CFC is to provide an opportunity for all federal employees to

donate to the charities of choice in the workplace utilizing the convenience of payroll deduction

In examining the current trends in the CFC, the mere explosion of new agencies and federations is causing
enormous logistic problems and expenses for CFCs, i.e. > printing sufficient numbers of agency brochures
for all participant donors in the campaign area, and in San Diego the number would be approximately one
hundred fifty thousand. Back in the early 1980s the San Diego CFC agency brochure consisted of a single
sheet fold-out pamphlet. The 1994 San Diego brochure totaled fily two pages,

During the past several campaigns where we have been in attendance during solicitation meetings with
donors, there have been a number of complaints regarding the size and volume of the brochures. Some federal
donors seem overwhelmed. With each new campaign there are many new agencies added and there does not
seem to be any end in sight Any action to restrict the numbers of agencies participating in the CFC would

be a positive move.

One of the most important components for participation in the CFC campaign is the requirement that

“The organization is a human health and welfare organization which provides services, benefits, or

assistance to, or conducts activities affecting human health and welfare” and an enumeration of these
benefits should be documented. { Rules and Regulations, May 26, 1988 / 950.203 (6) . Prior to the 1988
Rules and Regulations, agencies applying to participate in the annual CFC campaign were required to provide
more definitive information on the services they provided and how these services benefited the community.
Although such a task required more effort to produce, it might be well to again consider such a standard in the
future The wording of 950 203 (6) needs to be revised to better define the conditions an applicant agency
‘must meet to qualify as a human health and welfare organization. The current approach tends to allow many
S01 (c) (3) nonprofit organizations without regard to 950.203 (6).


90

record. And, if you have full statements that you want made a part
of the record, they will appear without objection.

Also, I want to note that, although unable to personally appear
at this hearing, Mr. Robert Dowlut, secretary of the Firearms Civil
Rights Legal Defense Fund—which currently participates in the
CFC, has submitted testimony in opposition to reforming the CFC.
If there is no objection, I will also accept his testimony and make
that part of the record. So ordered.

[The prepared statement of Mr. Dowlut follows:]


172

exposure, or to keep lead out of the environment in the first
place? Attending to the societal impact of lead poisoning
would be a traditional “health and human service", but the
environmental approach is ultimately a less expensive and
more humane approach to solving the same problem over the
long term.

Another example of the impact of the environment on
public health is the problem of contaminated drinking water.
Tainted water can carry bacteria and other hazardous
contaminants, which can lead to sicknesses, some even life
threatening in the cases of the very young and elderly.

That is why the health of our rivers and streams, which
provide the freshwater drinking supply for most Americans, is
so crucial. Earth Share's member agencies work to protect our
water resources and drinking water supplies, and help to
establish policies to safeguard our water and improve
existing protections.

A final example of the impact of the environment on
public health is the problem of chemical exposure. Earth
Share member agencies research the risk to humans of
chemicals in the air, soil and water. They have helped
demonstrate the dangers of dioxin, a poison that causes
cancer and reproductive, immune system and hormone-related
disorders.

They have identified the risks of exposure to sulfur
dioxide emissions, which cause respiratory problems in the
elderly, infants and asthma sufferers. Furthermore, Earth
Share's member agencies do not just identify problems -- they
propose solutions to reduce or eliminate exposure. They
educate the public -- including businesses, industries, and
federal, state and local officials -- about these dangers,
and remedies. They find ways to improve environmental
protections, and safeguard human health, without undermining
business and industrial competitiveness, by collaborating
with business, industry and government officials.

These are just a few examples of the ways in which the
quality of our environment directly impacts the quality of
our health. In addition, there are countless, indirect
examples of how environmental quality improves our well-
being, and our quality of life. For example, the benefits
provided to human health from our enjoyment of National
Parks, forests, farmland, wilderness areas, rivers, wildlife,
and hiking and bicycling trails may not be easy to quantify,
but are nonetheless substantial.

our member agencies provide services to all citizens,
and even to the federal government itself. They preserve and

5


44

Mr. Mica. I will call now on Mr. Michael Howland, president of
the Independent Charities of America.

Mr. HOWLAND. Mr. Chairman, distinguished subcommittee mem-
bers, thank you for this opportunity to testify.

The Independent Charities of America is an umbrella organiza-
tion consisting of 12 participating CFC federations. The Office of
Personnel Management has approved a total of 416 of our agencies
for participation in the fall 1995, campaign.

Independent Charities of America was founded by Federal em-

loyees in 1988 and, in fact, my own experience in chairing the San
Prancisco Bay Area Combined Federal Campaign and the Federal
Executive Board, which oversees the campaign, led me to ICA ini-
tially as a volunteer.

My CFC involvement suggests that the campaign should con-
tinue to serve the dual purposes it serves so well.

One, offer Federal employees the opportunity to give eligible

encies their funds with a current penultimate freedom of choice,
efficiency and effectiveness that have made the Combined Federal
Campaign a model for workplace campaigns. This is true_not only
in the public sector but in the private sector, which Congress-
woman Morella asked about, as well. In fact, even the once exclu-
sive United Way campaigns in San Francisco and Washington, DC,
have moved to inclusive CFC-style campaigns. Not surprisingly,
the expanded choice has yielded stronger campaign results.

Two, provide participating charitable organizations the oppor-
tunity to solicit funds for their respective missions in the least ob-
trusive, least costly means of fundraising possible.

experience convinces me that the taxpayer subsidy of the
Combined Federal Campaign is minimal while the benefits are
many. Stronger morale in the Federal workforce, positive percep-
tions of Federal employees and the Federal Government in general
in the eyes of the public, greater awareness of charities that often
leads to volunteerism outside of the Federal workplace and devel-
opmental experiences for employees at all levels are very important
by-products of the Combined Federal Campaign. These are in addi-
tion to the obvious benefit of funding a plethora of causes that em-
ple ees feel are worthy of their contributions of personal after-tax

lollars.

I would like to address the issue of manpower costs which I feel
are greatly exaggerated. By way of illustration, the San Francisco
district Small Business inistration office I led uses two em-
ployees to coordinate their campaign for roughly 60 employees. One
of the two may attend a half-day kickoff—excuse me, a half-day
training. The kickoff lasts 30 to 45 minutes, and some employees
donate on the spot. The coordinators may spend 2 hours each col-
lecting from the rest of the employees.

In the last district office campaign I oversaw we contributed an
average gift of $258, a tremendous return to society on a modest
investment of employee time.

As Chair of the Combined Federal Campaign for the Bay Area
I worked probably 20 hours a week when the campaign was at its
peak, but I assure that was in addition to—not in lieu of—my re-
sponsibilities of running SBA. And that’s how I believe all Com-
bined Federal Campaign leaders view their campaign commit-


85

Mr. Mica. So you're actually having more people participate in
giving as the choices expanded.

Mr. HowLanp. Yes.

Mr. Mica. And if we did a chart and we looked at the Federal
activities, we would actually see a decrease in the participation but
an increase in some of the amounts. You have fewer people partici-
pating, but giving slightly larger amounts. But this is not the trend
in the private sector? In fact, you’re saying it’s exactly the opposite?

Mr. Sono. It really varies, Congressman, employer by employer.

I have a column here from the Washington Post recently that
points out some of the ways in which Federal employees have re-
viewed how they react to the CFC. Sometimes with respect to Fed-
eral pay issues or retirement issues or any issue in which a Federal
employee may have some contention with the government, to quote
this letter, “my next step is to cancel my payroll deduction for the
Combined Federal Campaign.” The sense of the letter was that
they did not want—they were opposed to certain things that had
happened to them in the context of their service as a Federal em-

loyee. So sometimes what we have seen, apart from less pressure,
less coercion, which is very appropriate, folks taking out their frus-
trations in some way in the only means that’s available to them,
and that happens to be the CFC.

Mr. Mica. So you subscribe to the Charles Ralston theory that
each year there is less pressure from the Federal Government, em-
ployees feel less pressure to give so they are not participating,
starting with very high pressure in 1965 to now?

Mr. Sono. A host of issues affect any employee giving campaign.
In the aftermath of the United Way scandal of the last few years
we have seen some drop-off there as well. There are really a host
of issues that need to be examined more carefully.

Mr. Mica. The two of you deal with this charitable giving on a
professional basis. Is there any way we can better define—are
there any industry standards to narrow the scope beyond the pa-
rameters of the 501(c)(3) and what we have now, that might help
us better define participation?

Mr. Sopo. Well, the IRS does have various categories within the
501(c)\(3) classification. There is no conceivable way that trade asso-
ciations, professional associations which are already 501(c)(3)
should be admitted to the CFC. So something around perhaps a
look at those might be appropriate.

But I would just suggest that I think what we really should be
following is what employees are interested in. They are leaders in
terms of forming opir.ion about social issues today and where their
interests truly lie, and they are ahead of us. They are ahead of
curve in terms of defining what the current issues are of the 1990’s
compared to what perhaps we think they are or looking back per-
haps at the 1950’s or 1960's.

Mr. Mica. Mr. Sodo or Mr. Howland, do you think that these pri-
vate groups, charitable groups, should be paying a larger share of
the costs incurred by the Federal Government and the taxpayers?

Mr. Sopo. One thing that we find, Congressman, and I would
certainly—David O’Steen suggested to take a closer look at that—
but the one thing that we find in some cases what employees are


176

ALLIANCE FOR JUSTICE

Thank you for the opportunity to submit written testimony to the Civil Service
Subcommittee on the issue of reforming the Combined Federal Campaign. The
Alliance for Justice, a $01(c)(3) charitable organization, works to advance the cause of
jumtice, to strengthen the ability of public interest orgunizations to influence public
policy, and to foster the next generstion of advocates. Alliance for Justice members
ore civil rights, environmental, and consumor legal organizations based around the
country. The Alliance as well as a number of its member organizations participate in
the CFC on the local and national level.

For over ten years the Alliance for Justice has worked with the nonprofit
community to insure that federal workers are provided a broad range of charitics
which they may support through the Combined Federal Campaign. In 1984 the
Alliance released @ report criticizing the eligibility standards and application and
appeal process then in place, and, in collaboration with other nonprofits, led coalition
efforts to institute neutral eligibility criteria and 8 fair application process. The
Alliance opposes efforts to restrict participation in the Combined Federal Campaign.

During the June 7, 1995 hearing before the House Civil Service Subcommittee,

the Subcommittee Chairman suggested three means for revising the CF

instituting a
reporting process for amounts donated to individual charities; establishing a "user fee"
for participating charitics; and imposing narrow eligibility criteria to climinate
advocacy gioups. While the Alliance does not object to a system tracking donations (o
groups participating in the CFC, such a system should not burden nonprofits or donors

with reporting requirements. Imposition of a user fee is more problematic.


202

1994 Tmbrace A Stream Grants

ALASKA

ueen Chapere Te Josen CHAPTER
will cootinue ream assessments ad
retartion on Duck Creek, an urban
sire sn Alaska capital Duck Creek
historically supported wild populations
‘of pith, chum, and coho salmon, Delly
Varden chs and corhront woutTiay
several ofthese spas ae extinct oF 9
Severe dedine The Advisory Grup wi
tue taacine dacs and $7,500 coil
ment 2 rexoron pogram.

Ache Wild Tro Chapter ‘Ts Ass:
le Wild Teour Chapter will we $1,350
estore and add yang habia to Wille
teaw Creek, which meander along che
Porage Valley Tes. The ser carey
supots will cuts of chum, sockeye
Lat coho salmon ad proves ype
ites 20 sw sung salmon. Inte
‘preive exhib wil chowease che ch

fet parmnerp with he US. Forest
Senace and educate vntots stout fh
babi neds and improvercen

ARIZONA

(Old Parle Chapter» IN a sa T-tEAR
fio 10 retoretvestene native Apache
wout in Arizona's West otk of she Black
Ries, the Old Pueblo Chapter wll use a
$10,000 FAS gant to consruct over 15,
habia improvement snatures and put
1p 45 ees of npanan Fencing, a part
ols coopertive management plan that
tues a watershed approach to improve
aquacic and riparian habia,

CALIFORNIA

-Alearat Chaper» AS PK OF &
wareohed program in Californias Goose
ke Basin, Modoe-Auru wil wi 3
$5,000 EAS grant to improve grazing
practices. Volunters and ranches will

population.
‘Sierra Chapuer> E104 $1,000 CRI,
the Sheva Chaper wil evaluate che Dry

SA capo TROBT AUTUMN 1954

‘Greek/Seuee Ravine drainage. which
suppers theft amon tuna in Sus
mente County The spawning es lin
2 rapidly goweing meuopolian ae. and
‘only abort # 600 Chinook salmon and
seedhead tout rerura 10 thir pening,
‘grounds, fighting thew way through
Farms. shopping centr, a golf sans,
and calage carps TUes and volun
Teer wil event migrating fh and sden-
Wy plied runoff souees

‘Sie Rivers Chapier » Te COMBAT THE
dectne of cob salmon th the Pacific
NNovehwess Sic Rivert and emo local
tale 1 recovery groupe are targeting
Hiumblde Ray anche Marie water
Fad where esporsh indus prac
oes degrade aquatic habitat. placing
tative stocks of coho lon atk of
ceruincon 324 lesding to the deine of
fommercal ond recteaconsl Tehing,
156,000 wll help Sse Rivers and there
panes mani natchboue and tear
tng pond tac sn rin commere a
fahemien on das clr For ror.
‘om nd management

COLORADO

Colerade Council» THE CoLoaD>
Council will ute $6,000 to Finalize a
bout

recovery.
Indigenous to Colorado, Greenbacks
‘were val extinct uadl TUees spese
headed + setewide education and
renorton program, which har ecen-
fully reinroduced self-sustaining wild
‘Greenback from onl i small eran

Populations.
Ferdinand Hayden Chapter» .O¥G
the banks of Colorado Roaring Fork
River, the Ferdinand Hayden Chapter
‘will sabilise 25 mes ina navonal hab
tat demonstration projet, resting in
improved ciparian vegetation, water
‘elociti,and habia oh and macro
snverrebrates, EAS wil kick in $5.000 0
‘maintain Rearing Fork 38+ Gold Mad
wout faery

Grend Vale Ames Chaperr> AAAS
of $2,500 will help the Grand Valley
‘Angles score Colorado River cuhrcat
trout to Trapper Creek. Tapper Crk
bald genesally pare, sl epredacing

population of the native fi, which 2
‘andidate for liting a chestened oF
endangered by the US. Fuh and
‘Wilde Seevce Hybridinason, ovr
fishing, and drought have conned:
the Colorado River cutthroat devine,
and the chapet want ine exis
Ing poyslations and expand sei exe,

hunters will maintain and rebuild
fences along iptan ata, contr lo
drop seucures, and plane testo wb
"ze aya basis an provide eaves for
Si an de

Srake Kuve il conserve and operate
a> apaream fd ladder and chron
to niga: downsrenm,pestage pbs
ems on Rainey. Cock. histclly
apavming 20d caving habit for nave
Yellowstone conbroat wavs and Saske
Rover Fe spate cutee rou, ga
om withdrawal creel divert 100-
erent of Ratnee Creeks atra um-
Ter flow With funds ct $10,000.
members wil consist 9 hedpie 0»
lver migrating uh 4 eading iy.
Fischer wil he rele ut the Spake
River saving thonssuds of orn

MICHIGAN
Macegon! Whi River Caspter» Nu
egaalWhie Rirer wl enhance zea)
odoctvty and rcteanana’ oppowtan
ties on Cedar Cock, hore 199 nave
‘eulasion of wid brook tot cr
aly conse 10 be one of he fet
brook uous fshenes in southern Miche
in, Cetin Creek is Bing ern ar
sxctaive sedimentation $2.000. wil
purchase iter fbr, Geld sone, white
pines. cedars. and dogwouds need 10
able» sretly ered section of the

MONTANA
Slope Chapuer » WitH $3,000,
Wnt Slope sll squire + conserracion
casement on Rack Creek, which olds
sparing ound bl tow ex
‘hres, browns, ainbows, and Brookes
Rocke Creek i ral 9 saaiing che
bekeaguerad Clark Fotk Rivers remaioe

‘over 3,300 acres along Rock Creek, west


62

Page Three

in today's society. They also recognize that the social issues of
the 908 are far different from those of the $08. As a result,
these campaigns are more successful than previous, limited choice
campaigns.

Third, viewpoint-related restrictions on choice, including
turning back to regulations proposed in 1986, would increase the
cost of the CFC.

‘There would be no reduction in the amount of time contributed
by federal employee volunteers. [t makes no difference whether
there are 100 or 1,000 charities in the CFC.

Inotead of the relatively smooth and efficient system now in
place to determine CFC eligibility, a regulation and paperwork
nightmare would occur.

Turning back to the proposed regulations of 1986 would
increase the time epent by federal employee comittees in some 450
communities. Groups of employees in each location would be
required to spend far more time evaluating the applications of
some 1,000 national charities, in addition to local charities.
Implementing the proposed regulations would unnecessarily and
substantially drive up the federal employee time involvement in
the campaign.

Even with the variety of choices in the CFC today, it is an
employee-friendly, efficient campaign. You can find a charity of
interest in any CFC brochure as fast and easy as you can find a
Plumber in the yellow pages.

Fourth, no charity ie getting a free ride in the CFC. The
direct costs of the CFC are paid by participating charities in the
amount of about $20 million per year. The charities pay for
printed campaign materials, the management of the campaign, and
to proceas contribution:

Compared to workplace campaigns run by many corporations, the
federal government contributes far less in average volunteer time
and none of the direct costs absorbed by companies.



86

also interested in seeing is that as much as possible of their charity
contribution dollars get to the charity.

And so we're driven, and—frankly, by competitive forces within
the CFC. Charities are being driven to keep their administrative
costs down, their fundraising costs down. So the sense that the
charities—less is going to go directly to the charity could have an
inhibition—could inhibit giving in some respects. So, again, it
needs to be something that is looked at a little bit more carefully.

Mr. Mica. Well, do you support less taxpayer subsidization of the
process?

Mr. Sopo. What we find is that employers—whether it is tax-
payers or whether it is shareholders or whether it is other employ-
ers, you have 100 million people who are solicited for workplace-

iving contributions across the country. Many employers like the

‘ederal Government are saying we want to demonstrate our cor-
porate citizenship by doing something to help this process.

So, absolutely, we need to find more cost-effective ways always
to run the campaign, but there is a principle there about leadershi
and, if you will, corporate citizenship, even with respect to the Fed-
eral Government that we might want to look at to be sure that
we're not shooting the campaign in the foot.

Mr. Mica. Well, one of the problems is that through the courts
and through legislative action, a lot of these nontraditional char-
ities have logged onto the process. Again Mr. Howland, do you feel
that the taxpayer should continue to subsidize this process or
should these folks be paying a larger share of the administrative
costs?

Mr. HOWLAND. Well, again, I think the taxpayer subsidy is pretty
minimal for the benefits.

Mr. Mica. Eleven percent.

Mr. HowLann. I think that the benefits——

Mr. Mica. That was the testimony we had today of $22.1 million.
The direct cash outlay from the Treasury is less, but, in fact, we’re
subsidizing the rest of the process through various appropriations.

Mr. HowLanp. I am not prepared today to suggest that——

Mr. Mica. You don’t want to get your member organizations’
shorts all bunched up, I guess is what you're trying to say.

Mr. HOWLAND. It’s something certainly that we would consider,
but that we would like to discuss at greater length.

Mr. Mica. I see three potential candidates for public office here

today.
_ Well, I appreciate your position, but I did want to ask the ques-

‘ion.

I will yield at this time to the gentleman from Pennsylvania, Mr.
Mascara.

Mr. Mascara. Thank you, Mr. Chairman.

I commend the panelists for their remarks. Your candor, cer-
tainly, Captain, your remarks.

Captain HOLLENBACH. Thank you, sir.

Mr. Mascara. There is a dichotomy here of the issues. One is the
cost factor. And my colleagues have a proclivity and tendency to
wrap these issues in very clever words—“reform of the Combined
Federal Campaign.” Now who's against reform? We're all certainly
for reform.


121

-10-
a domestic welfare service function”,! made arrangements permitting "employees to designate
a contribution to approved local health or welfare agencies that are not members of the local
federated group", and required each participating charity to “carry out affirmative action
programs to assure equal employment opportunity. This policy applies to persons served by the
agency(,] to the staff of the agency[.] and to membership on its governing board and
committees.“

“Those changes did not go far enough to satisfy groups such as the NAACP Legal Defense
and Educational Fund, Inc., (the "LDF*) whose Director-Counsel wrote in response.” The
LDF candidly acknowledged its interest:

Theoretically, of course, there is no bar to federal employees contributing independently

to any organization they may choose. The practicalities of charitable giving, however,

are that once employees have contributed through an organized appeal at their place of
employment, it is not likely that they will also contribute outside of that effort, Further,

the Combined Federal Campaign allows the most painless type of giving through a

checkoff of wages, so that in each pay period a small amount may be donated. The

advantages of this system are obvious.”*
The LDF then summarized its chief objection to the eligibility criteria then prevailing
‘The present system excludes organizations oriented towards benefiting minorities
and other disadvantaged groups. Many organizations that are recognized under the
federal internal revenue laws and regulations as valid, non-profit, tax-exempt charitable
° id $3.1.
Id. § 4.24.
4 Id. § 4.21).
2 ‘See Letter of March 3, 1980, from Jack Greenberg, Director-Counsel of
the NAACP Legal Defense and Educational Fund, Inc., to Joseph Patti, Assistant

to the Director of OPM. A copy of the letter is set forth at the Appendix,
Exhibit 5.

Bid. ati.


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195

merged, The log can mean protection.
Bua the fog ean also mean, whatTM

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could snd on ea te

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snakes”

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member?”
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124

-13-
‘New philanthropies were admitted to the CFC at a very rapid rate in 1981 and 1982. Many of
them were legal advocacy organizations, such as the LDF, the Puerto Rican Legal Defense
Fund, the Nasional Organization for Women Legal Defense Fund, the Center for Auto Safety,
and, in due course, the Conservative Legal Defense and Education Fund and the National Right
to Work Legal Defense Fund.

In the spring of 1982 the Reagan Administration decided to attempt a bold experiment.
The foundation was laid with President Reagan's issuance, on March 23, 1982, of Executive
Order No. 12353.” That order revoked President Kennedy's old order,” instructed the
Director of OPM to "make arrangements for such national voluntary health and welfare agencies
and such other national voluntary agencies as inay be appropriate to solicit contributions from
Federal employees and members of the uniformed services at their places of employment or
duty" in a single annual campaign,” and delegated to the OPM Director the authority to
“establish criteria for determining the eligibility of voluntary agencies that may participate in
each of the annual Combined Federal Campaigns."*'

On May 11, 1992, OPM gave notice that it was proposing new rules in

implementation of Executive Order No. 12353. Comments were received and evaluated and,

” A copy of the full text of Executive Order No. 12353 (March 23, 1982)
is set forth at the Appendix, Exhibit 7,

* Id. $9.

® Id. § 1.

» Ibid.

"Hd. § 2.

2% 47 FEDERAL REGISTER 20268 (May 11, 1982)


31

Mr. Mica. Well, again, I hope we can work with you in this re-
gard because I would like to bring about some positive changes,
particularly as we deal with the definition of the advocacy groups
involved and, also, the nonhuman health and welfare groups that
have latched on to this taxpayer-financed activity.

With that, Mr. Mascara, did you have any additional questions?
I would yield.

Mr. Mascara. Yes. Thanks, Mr. Chairman.

I believe the answer or response to the gentlelady’s question re-
garding the use of public funds, even if some of the charities were
cut, wouldn’t that be so, regardless of the number, that there still
would be Federal dollars used to collect those funds?

Ms. GREEN. Yes. There would still be Federal dollars.

Mr. Mascara. So if you cut 100 or 200 out of the list it would
still be Federal dollars used.

Ms. GREEN. Yes.

Mr. Mascara. So that there would still be a subsidy from the
Federal Government to the program.

Ms. GREEN. Well, it would be the direct costs, again, of the CFC
office and then the indirect fixed costs of employees’ time.

Mr. Mascara. And one last question in reference to the chair-
man’s question of a certain agency with a name maybe that doesn’t
indicate that they do health and human services type activities.
You can’t identify from the name what they do.

Ms. GREEN. That’s correct.

Mr. Mascara. And then the determination of them being a tax-
exempt organization, someone would scrutinize the application to
participate to verify that they did, in fact, engage in those kinds
of activities that would qualify them.

Ms. GREEN. That’s correct. And meet all other criteria, yes.

Mr. Mascara. OK. Thank you.

Thank you, Mr. Chairman.

Mr. Mica. I thank the gentleman and would now like to yield for
additional questions to the gentlelady from Maryland.

Mrs. MorELLA. Thank you very much, Mr. Chairman.

You know, I don’t think it’s easy for an organization to become
part of the Combined Federal Campaign. Tve had some examples
from constituents with regard to e lucational institutions where it
has taken them the longest time, most diligent effort to try to point
out their eligibilit

Second, that has been established and if they are lucky,
they are part of this. And these are legitimate educational institu-
tions.

Those people who are giving are giving for that organization,
those special organizations, who have said to me that if that orga-
nization is removed they are not going to give to the Combined
Federal Campaign or they will significantly reduce the amount.
When you say per capita donations have increased, that they will
reduce that amount so they can continue perhaps to give to that
organization or give some of it. Is that a typical kind of response?

Ms. GREEN. Yes. I think it is. And one of the reasons why we
have the brochure and all the information we give employees is we
want them to be informed and we have a description of charities
that they can give to. And our indication is that they enjoy going


156

I sense that Federal employees appreciate the broad choices
available in the Combined Federal Campaign. I urge the Committee
to leave the program as it is -- open to many organization that
reflect the wide spectrum of interests in the hearts and minds of

Federal employees.


179

June 20, 1995
‘The Honorable John L. Mica
Chairman

Civil Service Subcommittee

U.S. House of Representatives

B-371C Raybum House Office Building
Washington, DC 20515

RE: Comments of Trout Unlimited (TU) for the Civil Service Subcommittee
Hearing on the Combined Federal Campaign (CFC), held June 7, 1995.

‘Dear Chairman Mica:

‘Trout Unlimited requests that the following comments be made part of the bearing
record on the above-referenced hearing.

‘TU is the nation’s leading coldwater fisheries conservation organization with over
75,000 memibers in 450 chapters across the country. TU is dedicated to the conservation,
restoration, and protection of the nation’s coldwater fisheries and their watersheds. At
the local grassroots level, TU chapters all across the country engage in a variety of stream
and watershed restoration and protection projects, which in turn have great public health
value by providing cleaner water and healthier aquatic habitat for a variety of activities
including fishing, swimming, hunting, and boating.

‘TU is opposed to your proposed changes to the Combined Federal Campaign
(CFC) which would limit participation by certain non-profit organizations. The CFC is
not “broken” and does not need to be “fixed.” Our objections to your proposal are
threefold: 1) CFC is cost-effective; 2) human health and public welfare is well-served by
‘TU and others benefiting from the CFC; and 3) although we do some conservation
advocacy, we are not an advocacy group.

1. Administration Of The CFC Is Cost-Effective

‘The CFC is a mechanism for government employees to make on-the-job, payroll
deduction gifts to private charities without disruption of the workplace. By reducing
many separate solicitations to one campaign, the CFC has created a beneficial
infrastructure for workplace giving. Organizations admitted to the CRC must meet strict
accountability standards, such as having an annual audit and keeping fund raising and
administrative costs below 25%.

‘One of your objections to the CFC is that it is a “mushrooming taxpayer-financed grab
‘bag.” What you fail to acknowledge is the Office of Personnel Management has stated

‘Trout Unlimited: America’s Leading Co Fisheries Conservation On
‘Washingtoa, D.C. Headquarters: 1500 Wilson Boulevard, Suite 310, Artington, VA 22200-2310
(703) 522.0200 + FAX: (703) 284-9400 » CompuServe: 70534,3234 + America Online: TroutU @aol.com



7

Our present criteria are consistent with the principle of inclusion
that has guided CFC eligibility determinations over the past dec-
ade. This principle of inclusion was validated by Federal Courts
and was subsequently mandated by Congress. If we narrow or re-
strict participation now we run a serious risk of not only of over-
regulation but of reviving the kind of divisive litigation we saw in
the 1980's.
© Second, you asked, what should be the central purpose of the

One original purpose, as the 1957 Executive order made clear,
was to minimize disruption in the Federal workplace by replacing
a multiplicity of charitable campaigns with a single one. But the
campaign also embodies the American tradition of volunteerism
and, at the same time, gives Federal workers an efficient way to
contribute to the causes of their choice.

Third, how much did it cost the Federal Government to conduct.
the CFC in 1994, including the pay and benefits of all employees
who helped to conduct the campaign? And how many employees
were involved?

Mr. Chairman, the Federal Government’s cash outlay for the
CFC is limited to certain direct costs expended by OPM in its over-
sight capacity. For 1994, these included $300,000 for a small staff,
about $350,000 for the Inspector General’s random audits, and 25
compliance reviews performed at a cost of $81,000. Thus we esti-
mate our direct costs for 1994 at a total of $731,000.

A larger amount is devoted to indirect costs. We are dealing here
with fixed costs and employees’ time. The cost of the campaign does
not significantly differ if we include a hundred charities or a thou-
sand charities. To arrive at a total for indirect costs we must esti-
mate the value of time donated by Federal employees.

Let me note, Mr. Chairman, that the 1988 report of the Direc-
tor’s Task Force on the Combined Federal Campaign estimated
that the campaign that year cost between $55 million and $60 mil-
lion. However, we strongly believe the methodology used in that re-
port was seriously flawed. For example, it assumed one key worker
for every 10 Federal employees and that the average key worker
was a GS-9. We find those and other assumptions to be highly
questionable.

One major problem with the report is that it based most of its
assumptions on the National Capital Area Campaign, which is not
at all typical of most of the more than 400 campaigns.

The report assumed also that every hour spent on the CFC is an
hour lost by the government. We do not share that assumption.
Employees also often work on their own time, such as their lunch
break. They often make special efforts to combine their work on the
campaign with their normal duties.

Unlike the 1988 report, we do not assume the campaign has a
negative impact on productivity. We believe the campaign has a
positive impact. A successful CFC drive is a matter of great pride
to thousands of Federal employees, and I think that kind of enthu-
siasm should be encouraged.

Mr. Chairman, the 1988 report concedes at the outset that it is
impossible to quantify the cost of the campaign. It proceeds, how-


206

from carrying out programs and activities that are designed to make a difference on our
society.

On the opening day of the 104th Congress Speaker Gingrich expressed
the need to “create a partnership” and make the congress “more accessible to the
American people.” In a previous speech he stated that “it people know you'll listen to
them, leam from them and help them, they want you to lead them.

We at the AHA are concemed over a number of efforts by Congress to
do just the contrary by restricting the ability of nonprofit organizations, representing
tens of millions of Americans, to represent their constituencies before the Congress. In
addition to Mr. Mica’s proposal, House Majority leader Dick Armey recently wrote to all
House Republicans asking them to contact their corporate contributors to urge them to
“challenge your contacts in the corporate world to change this disturbing pattern of
contributing to ‘liberal’ advocacy groups.” A copy of Pattems of Corporate
Philanthropy, published by Capital Research Center, accompanied Mr. Armey's letter.
According to the book's authors, “corporate money can obscure the radical economic or
political agenda of an advocacy group (and) corporations undermine traditional
charities by giving to advocacy groups.”

Our organization, which receives no federal money, is comprised of
Americans from all walks of life, with differing and varying political perspectives. We are
disturbed that the House Majority Leader would use his elected office to carry out an
‘obviously political agenda of special interests. Some members of the house leadership
would have Americans believing that providing corporate subsidies is OK while
activities and partnerships to promote the health and well being of its citizens is not.

The American Heart Association and thousands of other nonprofit health organizations


139

= 28-

they may, in all good faith, object for any reason

Fundamental Legal Considerations

Chairman Mica’s third question asks, “What legal considerations bear upon this
‘Subcommittee’s deliberations with regard to restricting participation in the CFC?”

A great victory for common sense was won in Cornelius v. NAACP Legal Defense and
Educational Fund, Inc. Congress would do well to bear in mind the following propositions that
may reasonably be extracted from the Supreme Court's decision in that case:

First, charitable solicitation is indeed a form of speech and associational activity, fully
protected by the First Amendment,

But, second, neither the Federal workplace nor the CFC is a public forum, open to any
speech by anyone at anytime.

‘Thus, third, the proper question is not, “To whom and for what reasons shall the CFC,
a nonpublic forum, be closed?” Rather, the proper question is, "To whom and for what reasons
shall the CFC, a nonpublic forum, be opened?”

Accordingly, fourth, the CFC should be legislatively re-established for specific reasons:
To lessen the burdens of government by fostering support for specific kinds of programs that
help meet governmental goals of meeting needs of human health and welfare; 10 avoid
disruption of the Federal workplace; and to minimize any appearance of favoritism or of
subsidization of political or religious activism -- not because politics or religion is bad, but
because each is so important to our liberty that we as a people demand that government keep

its hands off of them and be neutral with respect to them.


147

Mr. Mica. Again, I thank all our panelists for their participation
and their testimony. We certainly separate your testimony from the
previous panel and raise a number of questions I would like to ad-

ress,

First of all, one of the basic problems we get I think to address
if we make any changes in participation is that the definition of
these groups, and I think Mr. Morris is pretty clear that he wanted
to use the Presidential guidelines from the Executive order of 1983
I believe it was, of President Reagan. Do you think that would be
sufficient, and—to curtail again the proliferation of activity from
these advocacy groups?

Mr. Morris. Mr. Chairman, yes, I do. I think that the 1983 Exec-
utive order sets out a pretty clear definition of what ought to be
at stake here.

Mr. Mica. You also—one of the important things is to limit legal,
political and advocacy groups in participation and you think that
that will help establish a criteria that can accomplish that and it
should be enacted into law as opposed to rule. It would have to be
enacted into law; is that correct?

Mr. Morris. Yes and no.

No in the sense that if Congress were simply to repeal Section
618 of the Fiscal Year 1988 rgent Supplemental Appropriations
Act, then that would leave in place unencumbered by the legisla-
tive proscriptions the effective language of the 1983 Executive
order, but then the Executive order would need to be implemented.
That is what the 1983 regulations did, but we are a number of
bridges over the river Past the 1983 recollections. Then I say come
back to yes, therefore, I think a legislative fix is in order. A simple
repeal is an excellent start but affirmative legislation enacting into
law the Reagan standards I think would resolve the matter once
and for all.

Mr. Mica. One thing that is a mystery to me is that legitimate
charities seem to be rolling over and playi dead. That is kind of
disturbing. Maybe because they have been through such a battle in
the eighties, to see these people kick the door in and get a foot hold
as far as advocacy groups they almost seem intimidated by the
advocacy groups. Is that just a perception I have?

Mr. Morris. Speaking for myself, my perception is that that is
accurate. They are intimidated. They are also fatigued.

Mr. Mica. It seems like an embarrassment, too.

Mr. Morris. Anything that suggests to the donor population that
there is something wrong with a charity drive hurts everybody that
is in it. I suspect that some of the leaders of the human health and
welfare charities are of the view that a long time of quiescence over
the long haul is—provides conditions where they could find accom-
modations whereas there is a danger in controversy that there will
be a diminution of the total pool of money that is given.

So that kind of conservatism, that kind of caution is understand-
able. I think it is misplaced, but I think it is the responsibility of
the people in charge of the Federal work place, the President and
Congress, frankly, to make that decision. The human health and
welfare agencies will be the beneficiaries of that decision.

Mr. Mica. The statistics that have been presented today also in-
dicate pretty clearly that there is a pretty steady decrease in par-


153

could be done that you see from your experience and observation
of the process, do you have any final recommendations?

Mr. Burrus. No. Mr. Morris.

Mr. Morris. At a minimum, repeal section 618. Let the next ad-
ministration administer the matter or, as I suggested before, legis-
late the Reagan-Devine rules. Yes, there will be a spate of litiga-
tion, but I think Cornelius against the LDF decision by the U.S.
Supreme Court tells us that this will pass constitutional muster.

Mr. Mica. Mr. Barrett.

Mr. BarRETT. Nothing.

Mr. Mica. And Dr. Devine.

Mr. DEVINE. You’ve heard mine.

Mr. Mica. He said it all.

Well, I want to thank the panelists for participating today. You
certainly have shed a varying perspective on some of the other tes-
timony that we’ve heard today and the intent of this hearing, of
course, is to try to improve the process and to try to increase a real
charitable giving and involvement with our Federal employees.
From the testimony today, it appears that the Program, in my opin-
ion, has veered off course and that it could stand some correction
and it may need some legislative and administrative attention.

Again, I thank each of you for participating and for your valuable
contributions today. We have Congressman Hoyer’s testimony.
Steny Hoyer has asked to submit testimony for the record and,
without objection, that will become part of the record. So ordered.

{The prepared statement of Hon. Steny H. Hoyer follows:]


46

TO: ALL INTERESTED PARTIES.
FROM: FABRIZIO, McLAUGHLIN & ASSOCIATES
RE: EXECUTIVE SUMMARY - COMBINED FEDERAL CAMPAIGN

SURVEY OF FEDERAL EMPLOYEES

DATE: JUNE 6, 1995

METHODOLOGY

This survey of federal employees, regarding their attitudes towards the Combined
Federal Campaign, was conducted between June 2 and 5, 1995. All interviews were
conducted via telephone by professionally trained personnel. Respondent selection was
at random among a list of known federal employees. This survey of 800 federal
‘employees has an accuracy of +/- 3.5% at a 95% confidence interval.

KEY FINDINGS AND SIGNIFICANT DATA

EA Anamazing 93.0% of federal employees approve of “continuing to allow
federal employees the right to voluntarily make charitable contributions through
workplace giving to the charities of their choice.” Nearly eight of ten
respondents “strongly approve” of continuing this practice, which demonstrates
a clear intensity of support for this issue.

{Almost nine of ten respondents “betieve that federal employees should be able
to choose to support - through the Combined Federal Campaign - charities that
speak out on behalf of the people they help.”

1 Anastonishing 92.8% of respondents claimed to have contributed to the
Combined Federal Campaign in the past. Moreover, seven of ten said they
‘expect to contribute to the Combined Federal Campaign during the next year.

Fabrizio, McLaughlin & Associates, Inc. - (703) 684-4510 - FAX (703) 739-0664
801 North Fairfax Street - Suite 312+ Alexandria, Virginia 22314



208

expenditure of campaign contributions -- significantly limit non-profits’ advocacy
activities

The nonprofit community is concemed over what appears to be a multi-
pronged effort by Congress to politicize charitable giving with a result of restricting the
ability of nonprofits to advocate before Congress and the Executive Branch. In the
case of the CFC, the message to the voluntary sector is most worrisome. Smaller
groups will cease to advocate on behalf of their members. Groups remaining in the
CFC will be buried by paperwork in an effort to substantiate the 85 percent test.

The American Heart Association opposes any action by Congress to
restrict our lawful participation in the legislative process through advocacy on behalf of
‘our mission.

Thank you for the opportunity to submit this statement

O°


6

STATEMENT OF LORRAINE A. GREEN, DEPUTY DIRECTOR, OF-
FICE OF PERSONNEL MANAGEMENT, ACCOMPANIED BY
GERRI MASON HALL, COUNSEL, DEPUTY DIRECTOR’S OF-
FICE

Ms. GREEN. Thank you very much, Mr. Chairman.

As I stated, seated with me today is Gerri Mason Hall. She is
a counsel in the Deputy Director’s Office, and she’s responsible for
the day-to-day operations of the Combined Federal Campaign. So
she will be assisting me today.

Mr. Chairman, I thank you and the members of the subcommit-
tee for this opportunity to testify on the Combined Federal Cam-
paign, or CFC.

Before addressing the questions raised in your letter of May 30,
permit me to offer some background on the program.

In 1957, President Eisenhower created the United Federal Fund-
raising Campaign, as it was then known, by Executive order. His
action consolidated some 20 separate fundraising drives into three
campaigns, for the United Way and the Red Cross, and for two new
groups, the National Health Agencies and the International Service
Agencies.

This Executive order spoke of “true voluntary giving to such
agencies for charitable and other purposes” and of solicitations “as
will occasion minimum interruption of government functions.”

In 1961, President Kennedy established the Combined Federal
Campaign. His Executive order called for participation by “such na-
tional voluntary health and welfare agencies and such other na-
tional voluntary agencies as may be appropriate.”

Mr. Chairman, these Executive orders embody a recognition, bi-
partisan and at the highest level, of the importance of volunteerism
in the American tradition. It is a value that most Americans hold

lear.

But these Executive orders do more. They also recognize the in-
herent inefficiency, indeed the disruption, of having a multiplicity
of competing fundraising drives in the Federal workplace. And they
embody another American tradition—free and informed choices—by
broadening the alternatives available to Federal employees who
wish to donate to charity.

Mr. Chairman, in summarizing my statement I would like to say
the CFC program has worked well for a long time, and we at OPM
do not believe it is in need of major changes. Some observers may
think that this or that charity out of the hundreds on the list, is
inappropriate. But the people the CFC serves value their freedom
of choice. They vote with their paychecks. For their selections to be
restricted, for what some may perceive as ideological reasons,
strikes me as a form of big-government-style paternalism we
should avoid.

Now, Mr. Chairman, let me address your specific questions.

First, should participation in CFC be restricted to human health
and welfare organizations?

The answer is yes. And, as I’ve said, we do require that all orga-
nizations certify and document that they provide services affecting
human health and welfare. The underlying question is how these
terms are defined.


40

I am David 0/Steen, Executive Director of the National Right
to Life Committee and of the National Right to Life Educational
Trust Fund. I appreciate the opportunity to speak to you today.
I am speaking in opposition to the proposal under consideration to
remove charities which are considered to be “advocacy”
organizations from the Combined Federal Campaign.

As you know, the CFC is the annual national effort to solicit
tax-deductible charitable contributions from federal military and
civilian employees. The tens of millions of dollars that they
generously donate each year is an excellent example of individual
empowerment at its best. Currently, individual federal workers are
free to select from a very wide variety of charities and decide for
themselves to what organization and type of service they wish to
give their own money through workplace giving.

Federal legislation in the late 1980s opened up CFC
eligibility to many more charities by -- among other things -
preventing imposition of any ideological eligibility requirements.
Charities currently have to demonstrate that they fulfill objective
criteria, such as having 501 (c)(3) tax status, filing a federal
tax return and annual report, limiting fundraising costs and so
forth, Federal employees have responded to this open approach by
choosing to direct millions of dollars in contributions to the
agencies let in under the broader rules and by greatly increasing
overall giving.

The National Right to Life Educational Trust Fund has
experienced great support among federal workers through the CFC.
During the past five completed campaigns (1989 ~ 1993) we have
received a total of $ 2,462,962 from the CFC. This has not only
benefitted our national educational efforts, but local right to
life education as well, since we rebate one-half of our net CFC

proceeds to state right to life educational organizations and
efforts.

Recent statistics indicate that the abortion rate has fallen
significantly. This is good news, and we believe, as the nation’s
largest right to life educational organization, that our services
have helped save hundreds of thousands of human lives. We provide
scientifically accurate educational literature and materials which
discuss the development of the unborn baby and alternatives to
abortion, such as adoption.

Speakers from our affiliated chapters across the country use
anatomically accurate fetal models to teach prenatal development.
In speaking to high school classes I nave often asked students to
write me anonymous notes at the end of the presentation simply
letting me know what they thought. I have received a note back
from a high school student saying "I’m pregnant. Before you came,
I was going to have an abortion. Now I’m going to have my baby.”
Other speakers have had similar experiences. What greater health

2


120

-9-
assumption of increasing responsibility for problems.

Now, none of this is to say that the alternative philanthropies, such as the “elite”
institutions or the “advocacy” groups, are in any sense illegitimate, unworthy of support, or not
deserving of tax-exempt status. It is simply 10 note the obvious fact, that these alternative
philanthropies are not charities that supply health and welfare services directly to human beings
who are ill, infirm, poor, or distressed, thereby lessening the burdens of government and local
‘communities in meeting basic needs of such people.

A late as 1980 the Civil Service Commission and the Office of Personnel Management
limited participation in the CFC to human health and welfare charities." The last full sct of
CFC groundrules adopted by the Civil Service Commission was issued during President Carter's
Administration, Ils MANUAL ON FUND-RAISING WITHIN THE FEDERAL SERVICE FOR
VOLUNTARY HEALTH AND WELFARE AGENCIES (April 197)" (the “Manual") included, at
Section 5.21, a refinement of President Kennedy's eligibility criteria

Only nonprofit, tax-exempt charitable organizations, supported by voluntary contributions

from the general public and providing direct services to persons in the fields of health

and welfare services are eligible for approval.

In 1980 President Carter's newly-established Office of Personnel Management proposed

a revision of the Manual" that added a new umbrella grouping of “national agencies having

‘© Litigation over access to the campaign was rare in that era, and, when
challenged, the constitutional validity of the Kennedy Executive Order was
initially upheld. See United Black Fund, Inc. v. Hampton, 352 F.Supp. 898
(.D.C. 1972). The full text of the court's decision is reproduced at the
Appendix, Exhibit 2.

*7 A copy of the manual is reproduced at the Appendix, Exhibit 3.

" See 45 FEDERAL REGISTER 9418 (February 12, 1980), set forth at the
Appendix, Exhibit 4.


19

Mr. Mascara. If the 1986 regulations are reapptied, wouldn't
some of the very worthwhile organizations such as the 4-H, U.S.
Olympic organization and groups like the PCTV-21 in Pittsburgh
and the Pauline Auberly Foundation be dropped? Is that a possibil-
ity?

Ms. GREEN. Yes, it is a possibility. And when we looked at the
terms used for the 1986 criteria it did raise some concerns because
we wouldn’t know how to distinguish between certain areas. Some
of the terms that are used are needy versus poor and indigent.
How do you identify persons otherwise in need of social adjustment
which is in there?

So that’s what I’m referring to as a gra area. Without a defini-
tion of needy, organizations such as the Ronald McDonald House
or YMCA or Points of Light who—it’s very unclear whether they'd
be eligible or not. And the U.S. Olympic committee and the 4-H
groups would not be eligible. So, again, we would have to be very
specific.

Mr. Mascara. While I do not agree philosophically and
idealogically with some of the groups you have qualified who par-
ticipate in the checkoff, I am just wondering do these organizations
have to qualify under the Internal Revenue Service Code to be a
charitable organization? Must they all be qualified to participate?

Ms. GREEN. They must qualify to be 501(c)(3) organizations.

Mr. Mascara. So then we are not questioning the fact that they
should be on the list because they have been qualified by the Inter-
nal Revenue Service?

Ms, GREEN. That’s correct. We are not questioning that.

Mr. Mascara. So maybe there are some things wrong. And I
haven’t seen any specific numbers, and I come from an accounting
background—as a former accountant—and I'd like to take a closer
look at these costs. It seems almost incomprehensible that it would
cost 25 percent of the total amount that is raised, or was raised
last year, to operate a charitable checkoff—25 percent. That sounds
like a lot of money—$50 million. I mean, can we get some figures,
Mr. Chairman, from GAO or from OPM?

Mr. Mica. Mr. Mascara, just in response to your question, if you
would yield.

Mr. Mascara. Sure.

Mr. Mica. We do have the 1988 report from OPM, which is prob-
ably the most extensive study. And, again, we have a dispute be-
tween the current Deputy Director and the facts that were pre-
sented there. I did quote the estimate from that report. She bases
her calculations on a different set of assumptions.

Mr. Mascara. Well, according to the information I have, we are
talking about some kind of indirect cost. Because the information
I have, the direct costs are in the neighborhood of three-quarters
of a million dollars and not the kind of money that we are talking
about here. Who is extrapolating the numbers to come up with this
$50 million?

Mr. Mica. Even the administration and OPM has calculated the
expenses at $22.1 million, which is 11 percent cost. Again, there is
a difference of opinion on what the cost is, and one of the purposes
of this hearing is to try to determine what the real costs are.

Ms. GREEN. Sure.


4

We could not examine all 435 campaigns, but we polled the
top 40 campaigns, those that raise $1 million or more, to achieve
as accurate an estimate as we could of the indirect coste of
donated tine.

We asked their financial officers to provide data on the
number of keyworkers they used, their hours worked, and their
average hourly pay, as well as the number of LFCC members, and
their total hours and average hourly pay.

on the basis of their responses, the average grade of a
keyworker is GS-7 and the average ratio of keyworkers to potential
donors is one to 30 -- which, you will note, is three times the
1988 assumption.

Assuming that each keyvorker dedicates @ hours to the
CFC, we estimate the contribution of keyworkers, both military and
edvilian, at about $12.3 million. This assumes 136,937 keyworkers,
at an average daily rate of $90.28, who contact about 4.1 million
of their fellow employees, civilian and military.

As to LFCC volunteers, they average eight in top 40
campaigns, each contributing an average of 25 hours. In smaller
campaigns the LFCC’s are also sualler, with an average of four
menbers. We estimate a total of 1940 LFcC participants, with an
average grade level of GM 15, and an estimated total value of about
$1.7 million.

In addition, many campaigns have federal executives
detailed to them, often on a part-time basis. The number on loan
might range from ten or more in the largest campaigns to one or two
in mid-sized campaigns to none in the smallest campaigns

We estimate a total of 427 loaned executives, with an
average GS level of 14, each averaging 30 hours a week during the
six-week campaign, for a total cost of about $2.2 million.

We further estimate the cost of processing payroll
deductions at $750,000.

Thus, combining all these figures, our estimate of the
total cost of salaries for the 1994 CFC, on a national basis, comes
to about $17.7 million. If we add to that a 25% multiplier for
benefits, the total reaches about $22.1 million.

I note again that the vast majority of ‘that is in
indirect, non-cash-outlay costs. The $22.1 million is about 11% of
the §195 million raised that year.



3

A number of advocacy groups challenged this court order, argu-
ing that it violated their rights under the first amendment. Ulti-
mately, however, the Supreme Court ruled that the government
does have the right to exclude such groups through, “a viewpoint-
neutral restrictions system.” Congress, however, stepped in and
prohibited OPM from implementing regulations to enforce the Ex-
ecutive order.

We can see from the mess that has been created that President
Reagan was really on the right track. That is why I have proposed
restoring the CFC’s mission and role to its original purpose: sup-
porting human health and welfare charities. I would like to make
the CFC a genuine charity drive. Federal employees can return to
a supporting role for people who help other people—not lawyers,
lobbyists, and other propagandists.

Some say the CFC currently offers Federal employees a wide
range of choices, and I do not deny that for a minute. Federal em-
ployees can choose whether to participate in the CFC or not. They
can choose whom they want to support. They do have choices. But
the taxpayers who fund the CFC have no choice. Public resources
are being expended to support the collection of donations for these
advocacy groups. Taxpayers now lack the option of not participat-

TME estricting the CFC to human health and welfare charities will
still leave Federal employees free to donate as they see fit, but tax-
payers would not see their money go to aiding political or ideologi-
cal ups they dislike.

en we are asking everyone to belt-tighten today, advocacy
groups of every stripe must stop taking advantage of taxpayer-
funded fundraising.

We will hear today from the Deputy Director of the Office of Per-
sonnel Management, which administers the CFC. She will present
the administration’s position on this proposal. We will also hear
from a number of advocacy groups that would be affected by this
proposal, some who are in favor and some who oppose the Bro osal.

Finally, we will hear from individuals who are intimately famil-
iar with the CFC and support this proposal, including Donald
Devine, the former Director of the Office of Personal Management
in the Reagan administration, and Mr. Ron Burrus of the National
Voluntary Health Agencies San Diego Committee, which represents
human health and welfare organizations.

So those are my opening comments. I see that we also have our
chairman of our full committee here, and I will now recognize Mr.
Clinger if he has an opening statement?

Mr. CLINGER. Thank you very much, Mr. Chairman. I want to
commend you for holding this very important hearing and also
commend you on the leadership you have demonstrated in identify-
ing this very odd situation that we have with the organization.

I know that the purpose of this hearing today is to raise the
question of whether or not groups which do not fit the traditional
notion of a charitable organization should continue to be eligible to
participate in the Federal Government’s annual charity drive. I
think the fact that so many questions have been raised about the
recipients of the aid under the combined drive really calls into
question the credibility of the whole effort and, therefore, probably


132

-2b-

corporations undertaking comparable activities) as if the injunction applied to them as
well. Nonetheless, there are sound reasons for proceeding with this rulemaking
notwithstanding pending litigation and the issuance of the District Court's order in
NAACP Defense Fund.

First, this rulemaking is plainly required by, and effectuative of, an order of the
President of the United States. The setting aside or deviating from an Executive Order
isnot something to be done lightly, and, if [at] all by officers of one of the other coequal
Branches of Government, it should abide the maturely considered action and
unambiguous command of that other Branch

Second, aside from the specific commands of the District Court's orders in
NAACP Defense Fund and Planned Parenthood regarding particular plaintiffs, there
remain profound ambiguities in its decision concerning how the Executive Order must
be construed. OPM believes that it is prudent policy, while awaiting further guidance
from the Judicial Branch, not to speculate more than is necessary as to the ramifications
of the District Court’s opinion. Plainly, however, the District Court's opinion and order
leave intact the facial validity of the Executive Order, and thus rulemaking pursuant
thereto is appropriate.

Third, this rulemaking is made under Executive Order No. 12404. OPM believes
that its administrative construction of the Order should be spread of record so as to assist
all interested parties, including the Judicial Branch, in understanding the meaning and
effects of the Order.

Fourth, in the event that the Government prevails in pending litigation and if the
District court's decision in NAACP Defense Fund should be reversed or modified so as
to permit full effectuation of the purposes and eligibility criteria established by the
President, then a regulatory framework should be immediately ready to implement them.
On the other hand, once in place, this regulatory structure can be modified to
accommodate adjustments, if any. that may be required by further judicial action,

Finally, it appears that the issuance of the District Court's decision in NAACP
Defense Fund during the comment period has not inhibited the flow of public discussion
on this rulemaking. A significant number of comments were received after the court's
decision was rendered, and several commenters in fact addressed the possible
implications of the decision with respect to substantive aspects of administration of the
CFC.

OPM's predictions were partially fulfilled and partially frustrated. In the end, the
decision of the United States District Court for the District of Columbia in NAACP Legal

Defense and Educational Fund, Inc. v. Devine, although affirmed by a divided panel of the


110

fact is, and has already been a subject of discussion this morning,
that participation rates are falling off.

I do not think, Mr. Chairman, that the participation rates are
falling off simply because of the change in the coercion rules. The
big change there occurred in regulations imposed by Director
Devine in 1982.

In 1982, in his first set of regulations and the very interesting
1982 experiment, were put in place the rules that currently prevail
with regard to coercion in the workplace. In the most controversial
year of the Reagan experiment 1982/1983, the participation rate
was well over 60 percent, 62, 63 percent.

There is a footnote in my testimony that has the precise number.
It has fallen now below the 50 percent level. The only change from
then until now has not been a change in the noncoercion rules.

The change has been this explosion in participation of political
advocacy groups in the campaign which has genuinely undermined,
along with externalities such as the United Way scandal, the con-
fidence of donors in the integrity and the purposes of the CFC.

Mr. Chairman, let me conclude with a quick summary descrip-
tion of that 1982 experiment which really deserves the attention
and study by this subcommittee and the Congress as a whole. In
1982, in the wake of the LDF’s success in court and in the wake
of the experience in the 1981 iteration of the Combined Federal
Campaign where the walls began tumbling down, President
Reagan and Director Devine decided to try an experiment that was
as open as it could possibly be in the time available.

The 1982 Executive order and the implementing regulations pro-
mulgated by Director Devine under President Reagan's 1982 Exec-
utive order effectively produced an experiment in microcosm with
the CFC under the kind of ground rules we have now where legal
defense funds and other legal advocacy organizations across the
spectrum right and left were allowed to participate. The 1982 ex-
periment provoked the great crisis of the CFC because it was in
that year that it was brought home to Federal employees all across
America what these changes would mean.

In the 1982 campaign, wide open ground rules were applied. Di-
rector Devine required that all Federal employees be given the op-
tion of specific designation of gifts, and that was the first time that
that requirement had been imposed. Hitherto, as he pointed out
this morning, undesignated gifts were allocated by committees of
government employees and he began the policy of allowing, indeed
requiring that government employees be permitted to direct, to des-
ignate where their gifts specifically would go, to specific charities
if they saw fit, or to federations and umbrella groups if they pre-
ferred. That experiment also began in the 1982 campaign, and has
proved a success.

But what we learned in 1982 when the hue and cry that was
raised across America—and in the appendix to my testimony you
will find examples, letters from presidents of labor unions, letters
from ordinary citizens and Federal employees across America ex-
pressing horror and frustration that this charitable solicitation
drive about which they had such a proprietary feeling because they
make it work in Federal workplaces aut acruss America—was being
taken away from them and turned into a fundraising drive, a kettle


69

it exists today. And if we are to go the other way we are going to
incur a great deal of risk of doing dramatic damage to our society
and alienating the Federal workforce as well. I urge you not to take
that course but to stay along the path we have established today.

you.
Mrs. MORELLA. Thank you for your testimony, Captain
Hollenbach.
[The prepared statement of Captain Hollenbach follows:]


207

stand ready to advocate before Congress on issues affecting prevention or treatment of
diseases and their impact upon the American Public.

An April 15th article in the National Journal refers to “defunding the left”
as the catchphrase for the effort to stop the flow of federal funds to “liberal” nonprofits.
By all of the aforementioned standards, such groups include nearly all members of the
Independent Sector, testifying here today, representing a variety of voluntary health
organizations, hospitals, social service organizations, civic, social and fraternal groups.
‘A May 22nd editorial in the Washington Post, referred tongue in cheek to the “wild-eyed
folks at the American Cancer Society, American Heart Association, American Lung
Association, Anti-Defamation League of B'nai B'rith, the League of Women Voters and
others,” referred to by Capitot Research. Referring to a letter sent by Mr. Armey directly
to Fortune 250 CEOs, the editorial further stated, “The House majority leader should
not be writing CEOs on congressional letterhead to tell them where they should or
shouldn't make their charitable donations. Talk about intrusive federal government.”
We agree with that assessment and flatly oppose efforts by the Congress to politicize
charitable giving.

In 1976, Congress enacted lobbying legislation which expanded the
ability of nonprofits to advocate before Congress. While Congress intended to limit
lobbying activity by public nonprofits to certain statutory levels, the legislation was

meant. chi to bring their ey ise and ectives to bear on

public policy issues. IRS regulations, finalized in 1990, echo the law and send a clear
message that Congress and the IRS strongly support lobbying by nonprofits. The
“insubstantial part test”; placed upon nonprofits’ lobbying activities together with

prohibitions upon partisan politics -- including the endorsement of candidates and


24

even in this House. | don’t see the Combined Federal
Campaign as being broken. In fact, | see a very healthy and
successful program, where charitable contributions are
approximately $200 million a year, where administrative
costs for participating charities are low, where workflow
interruptions are minimal, and where 100 percent of the
designated donations go to the charities of choice. | want to
emphasize -- “charities of choice."

As issues have grown more complex, the CFC, like any
successful program and organization, has evolved from its
embryonic state in the 1960's. Yet, it still stands as a
symbol of good will, and that is something we should not
lose sight of in this discussion. The funds collected through
the program have been instrumental in assuring that children
receive quality educations and less fortunate individuals
receive food and other needed services.

I’m very concerned that if we limit the scope of
eligibility, thereby limiting the option of payroll deductions,
this could have a negative financial impact on all charities,
including those that would remain in the Campaign. A Yale

study concluded that employee morale and giving increased


143

Testimony Preacnted to the

Congress of the United States

House of Representatives

Committce on Government Reforma and Oversight
Sub-Committee on Cini Service

June 7, 1995.

San Diego County of National Voluntary Health Agencies, Inc.
Ronald C. Burrus Executive Director

Good Morning ... My name is Ron Burrus and for the last ten years | have been employed as the
Executive Director of the San Diego County Committee of National Voluntary Health Agencies, Inc.

On behalf of the San Diego Committee, f would like to express our appreciation to Congressman Mica
for hs initiative in exploring the issue of agency eligibility for participation in the combined federal campaign
It is an honor for me to be here this morning,

The SDC has been in existence since the early 1970s and has a 501 (c) (3) Federal Tax Exemption and
4 State of California Charter as a Public Benefit Corporation The organization is a consortium of
approximately thirty health agencies in San Diego whose national organizations are members of the
National Voluntary Health Agencies National Federation. The SDCC has a contractual agreement with the
National Voluntary Health Agencies of California, Inc. and these two groups work in concert to raise funds
through the annual combined federal campaign for our member agencies.

I would like to emphasize that {am here representing the San Diego Committee and my remarks should
not be taken to represent the views of NVHA of California or the NVHA National Committee

The SDCC is a local independent body that works with the CFC in San Diego County as an advocate
for NVHA member agencies (see attachment A for a listing of San Diego NVHA agencies). The San Diego
Combined Federal Campaign is the third largest in the country in terms of dollars raised and during
the fall 1994 campaign raised $5,771,690. Of this total, federal donors designated $ 1,047,375 to
NVHA agencies, which represents about twenty percent of the total dollars designated.


10

STATEMENT OF

HONORABLE LORRAINE GREEN, DEPUTY DIRECIOR
OFFICE OF PERSONNEL MANAGEMENT

before the

SUBCOMMITTEE ON CIVIL SERVICE
COMMITTEE ON GOVERNMENT REFORM AND OVERSIGHT
U.S. HOUSE OF REPRESENTATIVES

at an oversight hearing on
THE COMBINED FEDERAL CAMPAIGN

June 7, 1995

Mr. Chairman, I thank you and the members of the
subcommittee for this opportunity to testify on the Combined
Federal Campaign, or CFC.

Before addressing the questions raised in your letter of
May 30, permit me to offer some background on the program.

In 1957, President Eisenhower created the “United Federal
Fund-Raising Campaign," as it was then known, by Fxecutive Order.
His action consolidated some twenty separate fund-raising drives
into three campaigns, for the United Way and the Red Cross, and for
two new groups, the National Health Agencies and the International
Service Agencies.

This Executive Order spoke of "true voluntary giving to
such agencies for charitable and other purposes" and of
solicitations "as will occasion minimsua interruption of Government:
functions."

In 1961, President Kennedy established the Combined
Federal Campaign. His Executive Order called for participation by
"such national voluntary health and welfare agencies and such other
national voluntary agencies as may be appropriate.”

Mr. Chairman, these Executive orders exbody a
recognition, bipartiean and at the highest level, of the importance
of volunteerism in the American tradition. It is a value that most
Americans hold dear.

But these Executive Orders do wore. They also recognize
the inherent inefficiency, indeed the disruption, of having a
multiplicity of competing fund-raising drives in the federal
workplace.


141

Mr Mica. Thank you for your comprehensive testimony and re-
marks,

Now I will turn to Mr. Ronald Burrus, executive director of the
NVHA, San Diego County Committee.

Mr. Burrus. I am Ron Burrus and for the last 10 years I have
been employed as the executive director of the San Diego County
Committee of National Voluntary Health Agencies.

On behalf of the San Diego Committee, I would like to express
our appreciation to Congressman Mica for his initiative in explor-
ing the issue of agency eligibility for participation in the Combined
Federal Campaign. It is a real honor for me to be here this morn-
ing among these brilliant lawyers.

The San Diego Committee has been in existence since the early
seventies and has a 501(c)(3) Federal tax exemption and a State of
California Charter as a Public Benefit Corporation. The organiza-
tion is a consortium of approximately 30 agencies in San Diego-
whose national organizations are members of the National Vol-
untary Health Agency’s National Federation.

The San Diego Committee has a contractual agreement with the
National Voluntary Health Agencies of California, and these two
groups work in concert to raise funds through the annual Com-
bined Federal Campaign for our member agencies. I would like to
emphasize that I am here representing the San Diego Committee
and my remarks should not be taken to represent the views of
NVHA of California or the NVHA National Committee.

The San Diego Committee is a local, independent body that
works with the CFC in San Diego County as an advocate for NVHA
member agencies and I have submitted a list of these agencies in
the attachment. The San Diego Combined Federal Campaign is the
third largest campaign in the country in terms of dollars raised
and during 1994 raised $5,773,000. Of this total, Federal donors
designated a little over $1 million to San Diego and national NVHA
member agencies, which represents about 20 percent of the market.

The San Diego Committee is a group of local traditional charities
that directly benefit human health and welfare. We are concerned
with the numerous political advocacy groups and other organiza-
tions that might not directly benefit human health and welfare.

The San Diego Committee supports Congressman Mica’s efforts
to restrict the CFC to charities that can demonstrate that they di-
rectly benefit human health and welfare. We believe the central
purpose of the CFC is to provide an opportunity for all Federal em-
ployees to donate to charities of choice in the workplace utilizing
the convenience of payroll deduction.

In examining the current trends in CFC, the mere explosion of
new agencies and federations is causing enormous logistical prob-
lems and expenses for CFC’s. An example would be printing suffi-
cient numbers of agency brochures for all participant donors in the
campaign, and in San Diego this amounts to about 150,000.

Back in the early 1980’s the San Diego CFC agency brochure -
consisted of a single sheet fold-out pamphlet. The 1994 San Diego
brochure totaled 52 pages—this is the 1983 San Diego brochure,
and this is the 1994 resource guide that consists of 52 pages and
about 1,200 agencies listed.


1 Boos Dagan guiting Shere
lah

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Jonger2 place we could ake cunomers
swio had come to Montana to ah I's
sl my river. But now, instead of eking
‘fromit the me has comet give some
thing back”

Berty duPont is a retired Blackfoot
ieetey tee toes

repo din now o cach
Fak Wen hey Bihed ac Bry.
they rained they had he ofa prot

lemon ter hands
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tortrom linea wavonc one fier
‘men Bety duPont a ling abot
Menuly bas been fishing the Big
Sayers For bi,

Beureesreie
Serene
feet
oo
Steinar

‘ot people mh the Bickoot Tn
=o

eanttg
The Big Blckiot Rieromroihy
130 mies from ia headwaters on

ithe Rivero the Rod tothe Ba

EEE nour

184

The real if root stream that
flows across the pages of
Norman Macleans fictional
aver Has Trough sin

trouble, antes Trout
‘Ovni restoration project
seeks fo revive the play,

flo They were he primary ee of
thea ee wh poe
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beau: When
the road comes cle 10 the er, iis
limponatle not to imagine large, dark
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shadowy waters,

Easy to imagine, bu hard 10 find.

‘This the same polated, trout illed
‘Blackioot River that flows acros the
pages of Norman Maclean's novell, A
‘er Rs Darah (970). The et
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waters grazed
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‘as Trovugh til nto ie BackSoon.

‘The Big Blackfoot River iin rouble
‘but fortunately has found afew fiends.

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dan angler at dhe ime, but se was Woe
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AUTUMN 092


29

ployees, asking about the status: “What’s going to happen? How
will this affect the 1995 campaign? It’s a terrible thing. We want
choice.” That kind of thing.

Mrs. MoRELLA. Have you received any in support of his proposal?

Ms. HALL. No, I have not—to date.

Mrs. MoRELLA. Thank you. Thank you, Mr. Chairman.

Mr. Mica. I thank the gentlelady. I also thank her personally for
not sending me any of her correspondence or communications in re-
gard to this hearing or this matter. I have plenty to deal with only
my own.

Again, my intent is not to disrupt charitable giving but to look
at what we are doing and how this has mushroomed into a verita-
ble grab bag for anyone who can latch onto this Combined Federal
Campaign.

A couple of things concern me. One, we may dispute the amount
of money: You say $22.1 million. This OPM report says $55 million
to $60 million. There’s even a survey done by Business Week or
Forbes that when 20 different CPA’s are given a tax return, I don't
think any 2 of them come up with the same conclusion in their an-
nual report; all with defined terms. There can be disputes at how
you arrive at figures and calculations even in this exercise.

The question I have is regarding the groups that are supported
by taxpayer dollars. And even if it is 50 cents or $1, do you think
it’s right, Ms. Green, that these advocacy groups be supported by
your efforts?

Ms. GREEN. Well, I guess that I would have to say, Mr. Chair-
man, that all of the charities that we have in the Combined Fed-
eral Campaign are eligible. Our job is to determine that they are
eligible for participation and that they have met all of the stand-
ards, all the criteria to participate. We’re not making a distinction
between charities.

Mr. Mica. You’re just following the rules and the law as they
now exist.

Can you tell me if participation is actually increasing or decreas-
ing with the increasing number of organizations coming in to qual-
ify as eligible for participation?

Ms. GREEN. The number of Federal employees who are partici-
pating in the campaign——

Mr. Mica. And the amounts of money given.

Ms. GREEN [continuing]. And the per capita giving is remaining
steady and, in fact, is going up.

Mr. Mica. But the actual participation since 1965 is dramatically
decreasing, isn’t it?

Ms. GREEN. Participation has been decreasing since the cam-
paign started, but people are being more generous.

r. Mica. In 1965, we had this one-page list; and we had an
80.7-percent employee participation ratio. Now we've got this cata-
log of thousands of eligible groups, and we are down to 47.9 percent
of the employees, and we have seen a steady decline. Is that cor-
rect’

Ms. GREEN. Yes, I would concede that. But we do have something
with us today I would like to share with you which is a chart that
shows that per capita giving has been increasing and has not been
affected by the number of charities that have been participating.


166

PAUL F. GAVAGHAN
9103 BRIERLY ROAD
CHEVY CHASE, MARYLAND 20815
May 25, 1994

Hon. John L. Mica
United States Congress
427 Cannon H.O.B.
Washington, D.C. 20515

Dear Congressman Mica:

I want to congratulate and support your efforts to
rid the Combined Federal Campaign of political and
ideological advocacy groups in favor of tradittion-
al charities that actually help health and welfare.
The poor and handicapped deserve better.

It is deplorable that CFC contributions have been
wending their way to the coffers of advocacy groups
- regardless of their political coloration,

I am a long-time observer and opponent of extremist
advocacy groups, who proliferate in Washington and
unduly pressure federal agencies, brainwashing all
too many members of Congress. My experience indica-
tes that rule-or-ruin single issue groups tend to
warp the entire process of government.

As a board member of the American Council on Alco-

holism and recent president of the LEAP school for
the handicapped, I would cast my vote for the 1966

OPM rules. Best wishes.
Sincerely, t


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186

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cimeeo etre! hate

leg Renee cen ea he
SReiteente Bondetiecens
Simemraiyen siemens
Ratenencnmwm Senacmntmace
Ln ainrsey Sane
nae Sevens
Tergmmonbhann, Geeimereieatine
wnetuumarieet Eisai ia ne
toaeeinnea Soinga ase
inpeaicieebee Son twernriees
kek emoecreinyty Suvgieer ara aa
Keir eet Geteeat fact Oat
Pah ieee rie oe

iver are he Department of
‘second or third meeting, he hadsigned The money for the project was ‘ih
‘on as board member for BBCTU. He drawn, Undaunted che chapter contin:
how act as eaaurer. Like the other ues to push for thove reclamation

‘fought at man could cae che sanford
‘man should be able w fir Gam much lately the proces appar

At TUM 9


98

United States said it was “proper for the government to conclude
that a dollar spent in providing food and shelter is more beneficial
than a dollar spent on litigation.”

Mr. King of the Office of Personnel Management wrote to the
committee that he doesn’t want a return to the “acrimony and tur-
moil of the 1980's,” but it’s important to remember what caused
that turmoil and what was the result of that turmoil. Because it
was the government which was forced by the advocacy groups to
accept “lobbying, litigation, and advocacy of the needy as just as
charitable as health and welfare,” quoting the main architect of
that change. The government was forced into its current position.

And I'd like at this point to correct the OPM Deputy Director’s
testimony. None of this is in law. It’s all by administrative action.
No reform would need a change in the law, except the appropriate
ban that was put in. The only action Congress has ever taken on
this was the negative one of refusing to allow us to spend funds
on the purposes of the original Executive order. It’s all through ex-
ecutive branch administrative action.

Now, I know that it’s difficult to stand up to the pressure groups
and represent the taxpayers’ and the employees’ right to decide—
to do the right thing in an area as obscure as this program, one
that doesn’t even exist as far as the law is concerned except as an
administrative action. But we should not allow as public policy, po-
litical bullies to force bad policy on the Government of the United
States. That’s why I did fight for this when I was the head of OPM
during the Reagan administration.

Everybody who’s testified today has pointed to the benefits of the
choices that exist in this campaign. Well, there would be no choice
in this campaign if I didn’t take on the vested interests that ran
the campaign before I came along.

You know what the amount of money that was chosen to be di-
rected was before I made the changes in the Combined Federal
Campaign? Zero. Absolutely zero. It was set by the government
what the administrative disbursal of the funds would be. I took on
the vested interests in the campaign and set up the current system
where now, 93 percent of the contributions are made voluntarily to
specific organizations.

Why did I take that step that now is universally accepted as the
right one? Because it was the right thing to do. It was the wrong
thing for the government to dictate through administrative—not
even through law but through administrative decision—what
groups, favored groups, would get what particular amount.

The very choice that’s in the program was taken because we de-
cided in the Reagan administration that we would take on those
special interests. We would reform the campaign to allow employ-
ees to decide who got what amount of their funds.

But we also decided that we were going to stick to the traditional
health and welfare definition set from the time of President Ken-

nedy.

Now, Mr. Moran says we don’t have any complaints. But we have
enormous complaints in this system. It is a market in the Com-
bined Federal Campaign, and the Federal employees are walking
away from this campaign.


140

-29-

Finally, it must be remembered that contributions are the private property of the donors
until properly remitted to the intended recipient. Pools of putatively undesignated funds are
opportunities for mischief, both in their potential for misleading donors as to what use will be
made of such money and in the occasions they create for abuse of power in disposing of it.
Sound administration of the CFC will leave no doubt at any time as to who is entitled to every
contribution made.

1 will be pleased to answer any questions that the Subcommittee may have.


91

ROBERT DOWLUT
SECRETARY

FIREARMS CIVIL RIGHTS LEGAL DEFENSE FUND

The Firearms Civil Rights Legal Defense Fund was established by the National Rifle
Association of America in 1978. It is recognized by the Internal Revenue Service as a charity
under § 501(c)(3) of the Internal Revenue Code.

The answers to the Subcommittee's three questions presented in its letter of May 30,
1995, are as follows:

(1) The CFC should serve as a facilitator between federal employees and charities. Federal
employees should have a right to choose where their charitable money goes

(2) The decision to have federal employees involved in the Combined Federal Campaign in
various ways, from administration to being a donor, is a policy issue. However, it would
be unfair to exclude a charity from participating in the CFC because some people view the
charity as being controversial. Controversy is in the eye of the beholder, For example,
many federal employees support the Firearms Civil Rights Legal Defense Fund because it
helps people that other civil rights legal defense funds refuse to help simply because of
institutional bigotry or because they consider the constitutional right to keep and bear
arms as being too controversial

(3) 11-1-89 to 10-31-90 $364,939.01
11-1-90 to 10-31-91 $455,840.12
11-1-91 to 10-31-92 $444,590.33
11-1-92 to 10-31-93 $467,605.22
111-93 to 10-31-94 $465,870.00
11-1-94 to 5-31-95 $248,160.91 (last figure not audited)

The Office of Personnel Management on May 11, 1995, found the fund eligible to
participate in the 1995 Combined Federal Campaign as a national organization. This was the
result of a successful appeal by the fund.

Initially, OPM advised in a letter of March 17, 1995, that the fund was denied for the
following reason: "The organization failed to enumerate adequately the human health and welfare
benefits, services, or assistance provided or the activities conducted by the organization, as
required by 5 CFR 950.203(b)(6)."_ In its appeal, the fund pointed out to OPM that
Attachment F for 1995 contained a brief description of cases the fund has supported, and other
fund activities, throughout the nation. The same format and information was provided in
Attachment F in the fund's CFC applications in 1990, 1991, 1992, 1993, and 1994, and all were
approved by OPM. OPM was advised that the cases supported by the fund and the activities of


Ihe carapace of 1 forts
rere are prewed agen
Teall clear gas of gr
fing aquariim incubator
‘ine dre ove ated each en
tivo develop, day by dan. Now, is
Sh spring nor. dovens of tiny
pie blo les ate beginning 0
fnove abot the gravel. Suddenly
Sin ber a mumatureseethead tot
seth tine lark ees, pops ut, ts
Wanlacent shell The’ chen’ eyes

bulge
“Wont!” they exclaimin unison, "Awe

‘ov fe sernerging a they watch. as
they lear.

193

before Us school year is finshed,
nese fouirngrade students ll Ko"
more about Fish chan mos fishermen.
‘Theywilunderstand howa declbea's
‘olfactory and optic Tobes Rincon —
bow tamelsand ees They il oer ak
2 sale fom an adult teetlead under 3
‘microscope, be shown the varying com
presson of i grow rings and lea
{hedilerence sthe omeitspends grow
{ng rapidly (rial in salewace
"The children will ake a clasp 1

‘Theywilltouch cadditlvexesand may
Myaymphs aquauc insets upon which

the young seethead depend for nour
‘shimeat ‘They wil be inigued be the
fact rat newly emerged fry deft dewey
ream wahe wilolanifle, because hat

Ovt of it Tike,
thousands of fish,
not very man
make ib Cuz of
obstacies. Yeah.
They got a whole
bunch of Enemies.
Brett Wilkerson ,10


5

And they embody another American tradition -- free and
informed choices by broadening the alternatives available to
federal employees who wish to donate to charity.

Mr. Chairman, as you know, in the 1980s a series of court
decisions, as well as Congressional action, ensured that these
alternatives renained open to federal employees.

We at OPM believe that federal employees have been well
served by this wide range of choice,

Today, CFC has a national list of charities that have
been ruled eligible by OPM, as well as local lists approved by
Local Federal Coordinating Committees, or LFCCs. To be approved for
the national list, organizations must meet certain basic standards.
These include meeting the IRS definition of tax-exempt
organization, under 26 U.S.C. 501 (c) (3), having provided services
in fifteen or more states over a minimum of three years, and
demonstrating that they are providing services, benefits or
assistance affecting human health and welfar

Aw of 1994, CFc’s national list included some 985
organizations. Of these, about 655 were represented by seventeen
national federations and the rest were unaffiliated.

In addition, CFC’s 435 campaigns have their own lists,
which include thousands of charities thay have approved.

Although OPM has oversight responsibilities, day-to-day
decisions regarding the campaigns are made by the LFCCs, which are
made up of federal employees.

Let me note that although we now have 435 campaigns, as
recently as 1988 there were 536. The number is declining because we
urge local campaigns to @, whenever that will achieve greater
efficiency and reduced operating costs.

No one ie required to contribute to the CFC, but those
who choose to contribute may designate the specific charities they
want to receive their contributions, or they may choose to make an
undesignated contribution.

CFC believes in informed choice. Each donor has access to
information about potential donees and no one is asked to
contribute blindly to any cause.

crc is primarily designed to serve federal employees, not
the charities. To give at the workplace, most often by deductions
from your paycheck, with a wide range of choices before you, is an
opportunity that most employees greatly value. This system results

in significantly higher levels of giving than would occur if cFc
did not exist.



97

Mr. Mica. Well, again, we thank you for your participation and
involvement in this hearing; and, hopefully, we can improve the
process with your assistance.

I would like to call our third and last panel—we always save the
best for last.

We have Dr. Donald J. Devine, who is former Director of the Of-
fice of Personnel Management. We have Mr. Jeremiah J. Barrett,
former Director of CFC Operations; Mr. Joseph A. Morris, former
General Counsel, Office of Personnel Management; and Mr. Ronald
C. Burrus, executive director of the NVHA San Diego County Com-
mittee. Each of these individuals has excellent familiarity and ex-
perience with CFC.

I would ask at this time if you could rise and be sworn in, as
is customary with the panel.

[Witnesses sworn.]

Mr. Mica. The record will reflect a positive response from the
panelists.

Again, each of you has a great deal of expertise, and we appre-
ciate your coming forward.

I thought we would begin with the least controversial member of
the panel—Dr. Devine. We look forward to his testimony. Dr.

evine.

STATEMENTS OF DONALD J. DEVINE, FORMER DIRECTOR, OF-
FICE OF PERSONNEL MANAGEMENT; JEREMIAH J. BARRETT,
FORMER DIRECTOR OF CFC OPERATIONS; JOSEPH A. MOR-
RIS, FORMER GENERAL COUNSEL, OFFICE OF PERSONNEL
MANAGEMENT; AND RONALD C. BURRUS, EXECUTIVE DIREC-
TOR, NVHA SAN DIEGO COUNTY COMMITTEE

Mr. DEVINE. Thank you very much. And I notice you’re rapidly |
approaching my status, and I congratulate you on your courage in
having this hearing. I do think this is an important subject.

I have a little booklet I’ve written on this subject that I would
like to put in the record.
anne information referred to can be found in the subcommittee
iles.

Mr. Devine. You asked what the purpose of the Combined Fed-
eral Campaign should be. I think the Executive order of President
Kennedy stated it quite well.

And you asked: do you think it’s proper for the taxpayers to sub-
sidize this charity drive? I believe it is, as long as the cost to the
government in both direct and indirect management costs are rel-
atively small, and that the causes supported by the charity drive
help the management of the government and do not offend the em-
ployees or hurt the productivity of the institution.

‘hat’s why the original Executive order from John F. Kennedy
to every President through Ronald Reagan limited the drive to uni-
versally accepted human health and welfare charities, setting the
criterion for which charities could be supported.

The Supreme Court of the United States reviewed this matter,
in a case I took to it—against the advice of all the lawyers in the
government, by the way, except Mr. Morris who was working for
me at the time—and only on the demand of President Reagan him-
self were we able to make the appeal. The Supreme Court of the


cntyin suspendedanimaton untleco-
‘omic factors are more favorable 10

eee ih denne 5 ew

nearly everyone igvohed in the effor

to get the Blackfoot tack on its feet

hows its the biggest teat wo the ve.
Biologut Pree is bhine

“With money. creatine thinking and
‘cooperation, we can deal with most of
‘he problemson the Blackfoot Mining,
fon the other hand, represents the most
seat tothe rvs
Bruce Faring is Conservation Dicee-
‘or for an Influential environmental
(group called the Clark Fork Pend
[rele Caton, Par of Farag bet
inthe Blackfoot River.
Fappenngothe reread cone
ow," say Farting "he mine

acres io

187

without a doubc the biggest threat The
‘mining law doesn't have enough ieee
Init wp do anyihing and the industry
doesnot have a record that instills con
fidence. f you are going wo wse the
cyanide leach meviod, chances are you

ite going wo hae leaks. That's just the
says And when that mine is gone,
you're gonna hive ahell of a mess up
here, and a burch of empry apart

‘ments and tailer houses in Lincoln.

Nas

Betty duPont laughs when she ake
about all of the actvides in whic the
chapters involved.

‘chapter spon:
Sored a ymposium br the sisi of

1901 ar which all he major players in
the Backfoo.

sentatives of 11 different government
agencies, here were ranchers, miners,

not iE


102

Third, the Director of OPM and local Federal officials are very
limited in the amount of information that they receive from appli-
cant agencies when they make their eligibility decisions. This per-
mits many questionable and fraudulent organizations to enter the

Fourth, deciding eligibility of organizations by the government
gives the false impression that they are approved by the govern-
ment. This is not the case, but the government still can be held up
to ridicule for permitting a suspect organization to participate.

I recommend that the Congress encourage the Government to
permit employees to establish a charitable allotment during the
specific period of time each year without the CFC operational de-
tails. The allotment would be the same as the one used to pay off
a car loan or other recurring payment that employees have.

This would remove the Government from the costly eligibility
and appeal process and the possibility of potential legal claims. It
would allow the donors to continue to support an organization as
long as he or she wished.

An allotment such as this would require an employee to cancel
it or change it for it to stop. It would encourage the recipient char-
ities to develop and maintain their relationships with their Federal
donors. It would treat employees as responsible adults who can
make these decisions without the approval of a paternalistic bu-
reaucratic overseer. It would inhibit if not stop cases where em-
ployees have used their designations to pay tuitions to private
schools or to day care centers.

The charity would receive with each check, I would assume, a
statement to the effect that it is a tax deductible gift for which the
donor should receive no benefit.

I appreciate the opportunity to present my views.

[The prepared statement of Mr. Barrett follows:]


201

The Proje wil alo include an economic valuation study
te determine the vale of the BeaMac warrhed creations
‘rout ery tthe local regional. ad statewide econ

“Pave landowners and fatmen in the waters comm
nig leaders, anglers and conseretionite a have x kei he
four ofthe BeaMos," said Whit Fosburgh Fahere Director
forthe National Fah and Wife Foundation. "This prose
“unique i poral foc Banging together dere nterece

'A maior benci of the peojce sto provide the agency
reaponible for managing the BeeMax' out fer, the New
York State Deparment of Environmental Comeranon
cal nformation about the Bcery’ecotomic ale and bog
Jealdynamics. The projec studies il bp loa authorities in
‘aking land. oe deuons

Over the lst couple yar, lca fish, residenes and
angler have agree thatthe ror ae kev tthe wel beng of
the local ecanoray.” eye Bob Bein. “Barirs ae coming,
own, ine for roe to vc the data sere eo mur
ally proce our imerens i thought manner

‘When completed, the asumene sould denny oppect
its where governmental and non-povecnmentaloramira
‘ions can make inteligent changes vn land-e manageaent
teguliions and pallutane dachargeequirenent porches of
‘omervation ewements and development rights nd water
onsercan progr and where TU and ober conservation

ines car make + difference through "hands-on" stream
Improvement projets

“Trout Unlimited national orrization wil ere 3 po:
lect manager in parineshiy with TL's 21 chapteg im New
ook Sete, where TU hat 5400 members and by chapers
nd coun hroughout the Northen New Engl,

“The proponed ues wee developed in conulaion with
INYSPEC peronnd respasible for managing the BeaMoci
trout fey ad fam che rasework which ecologist Janes
Kate has developed vo messure the buologicalinresiy
geste scosuems. (J Ker, “Biological Incr: A Lange
[Neplcd Apec of Wer Resource Management Eola
Applerion, No.1. No, 166-84 (599911

Kare deeloped the Inde of Bic Ieprity BH vo me
sure the belgie egriy of aquatic comers wth er
nce #0 Buh vemnuniey sracture capa Jock Cony
ham. 2 Yale Univesity searcher who #8 asicng i the
biological studies "Were going base out research o ery
management objectives by looking at the factors Kat iden
Fal a8 bey indiexon of biologie integrin food roves.
est ual tractite, Rows, and interactions
rower pies

‘An Beau les comprehensive sensi snd ec
nomic sue, 9 aplication of technical nfrmaion vo r-
dene, commercial. and ecreatnnsl ois of watered

‘and the evablihment of lasting

arnenhps among eal commun
fae, goverment ences dnd ve
finaly organiatons. Trout Un-
Imived bape the BeaMoc Project
sell serve a + model for cesoration

he pst the
‘ginning caplins Gavin "1
hope this voc wil be nt the iat
‘of many. What we len fom the
Hever will give us beer tals
for restoring other ever. hats
wba ohn say all out” a

fl

i
I
'

AUTUMN 1994


192

am Winner

stall trout habitat structures. TU volunteers and staff
from the Fish and Boat Commission will continue to
monitor Wallenpaupack Creek to collect and analyze
data on the physical and biological results of rehabili-
tation efforts.

Narragansett Chapter (RI) — The Narragansen.
Chapter will use a $5,000 EAS grant for two erosion
control projects on the Wood River and Falls River, a
small headwater tributary to the Wood River. In coor-
dination with the Rhode Island Division of Fish, Wild-
life and Estuarine Management, which is attempting
to reintroduce Atlantic salmon in the watershed, the
Chapter will terrace and revegetate eroded areas at both
sites. The Falls River will also benefit from a regraded
gravel road and parking area, which will redirect
stormwater run-off. The Chapter will aso installa gate
to protect the Wood River from vehicular access to its
‘embankment,

Great Smoky Mountain Chapter (TN) — Using a
$2,605 EAS grant, the Great Smoky Mountain Chap-
ter will collaborate with the Tennessee Valley Author-
ity and the Tennessee Wildlife Refuge Resource Agency
toenhance the natural reproduction of rainbow trout in
Clear Creek

Great Smoky Mountain chapter members will re-
store the natural width-to-depth ratio in the channel,
repair structures, clear debris, create gravel beds, and
stabilize eroding banks in order to provide consistent
flows and protect natural spawning areas.

Little River Chapter (TN) — Working with the Na-
tional Park Service, Little River TU members are dedi-
cated to eliminating non-point source pollution impacts,
‘on the tributaries of Abrams Creek, located in the Great
‘Smoky Mountains National Park.

‘A $10,000 EAS grant will be used to construct
28,728 feet of fencing to create 2 100-foot riparian cor-
ridor on both sides of the Abrams Creek's six tributar-
ies. TUers will break up the soil. seed and install ero-
sion control devices on the most degraded areas to lower
sediment toads and allow the stream to retum to more
natural levels, which will provect the watershed’s rain-
bow and brown trout populations.

‘The project is also supported by the National Fish
and Wildlife Foundation. the Tennessee Valley Author-
ity, the University of Tennessee. and the Tennessee
Wildiife Resources Agency.

Upper Valley Chapter (VT) — The Upper Valley
Chapter will use a $2,218 EAS grant to eliminate bar-
riers to spawning habitat on the Mill Brook in Promifret,
Vermont, which was once one of the two largest spawn-
ing and nursery tributaries for the native rainbow trout
inhabiting the main stem of the White River.

With assistance from the Vermont Department of
Fish and Wildlife, the Chapter will construct a fish lad-
der by retrofitting existing culverts with strategically
placed baffles made of pressure treated timber. The
fish ladder will increase existing spawning habitat by
70 to 80 percent

Olympia Chapter (WA) — TU’s Olympia Chapter
received an EAS grant of $3,000 for its youth educa-
tional efforts in Puget Sound's Budd/Deschutes water-
shed. In cooperation with the Global Rivers Environ-
‘mental Education Network, the Olympia Chapter will
assist local schoo! teachers and students in monitoring
water quality and quantity, planting riparian vegetation,
and restoring nature trails. In addition to teaching stu-
dents about the importance of conservation through
“hands-on” field work, the project will help protect
valuable trout and salmon fishery.

West Virginia Council— In a partnership with the
West Virginia Department of Natural Resources and
the U.S. Forest Service, TU’s West Virginia Council
will treat five native brook trout streams with sand-
sized limestone in order to cause the pH and calcium
per hydrogen ratio levels inthe five streams. EAS fund-
ing in the amount of $9,550 will help neutralize the
effects of acidification from acid rain and the stream
geology’s poor buffering capacity, on the following
streams: Dogway Fork of the Cranberry River and
Glade Run, Fishing Hawk Run, Lambert Run and Red
Run of the Shavers Fork watershed.

Kiap-TU-Wish Chapter (WI) — In a cooperative
‘effort with the Wisconsin Department of Natural Re-
sources, the Kiap-TU-Wish Chapter will use a $5,562
EAS grant to install a monitor station at the Little Falls
Dam on the lower Willow River. Located in a state
park, the Willow River supports a valuable brown trout
fishery.

‘Members of Kiap-TU-Wish will measure the flow
and temperature regimes below the Little Falls Dam.
‘The Chapter will use this data to develop a “fish-
friendly” management plan for the dam.


118

-7-
Federal management." In the end, though, President Eisenhower's measures did not do
enough to gain control of the situation. Less than four years later his successor revisited the
matter.

The Combined Federal Campaign came into being with President Kennedy's
promulgation of Executive Order No. 10927 (March 18, 1961). See Appendix, Exhibit 1,
President Kennedy retained the possibility of as many as three annual solicitations at specified
times!” but expressly required that the campaign “permit true voluntary giving and reserve 10
the individual the option of disclosing his gift or keeping it confidential." The President's
Committee on Fund-Raising Within the Federal Service was abolished. Instead, the Kennedy
order established the CFC and gave responsibility for its oversight to a single agency with
governmentwide management responsibilities: the Civil Service Commission. ‘The Chairman
of the Civil Service Commission (which would eventually be succeeded, of course, by the Office
of Personnel Management as the agency responsible for management of the civil service and,
with it, the CFC) was instructed to make arrangements for workpiace solicitations by “national
voluntary health and welfare agencies and such other agencies as may be appropriate."

For nearly 20 years the Kennedy criterion of admissibility to the CFC proved to be of
little controversy. Everyone seemed to understand that the CFC was intended to suppert

traditional kinds of charities that undertake research into the causes and cures of dread diseases

"Id. § 1).

Executive Order No. 10927, § 2(b) (March 18, 1961).
” Ibid.

“Id. § Xa).


Page Six
of the CFC, I urge the committee to recognize the benefit of less
government intervention and to refrain from legislation that would
@o far more harm than good. ‘The CFC is working, please don’t
change it.

‘Thank you for the opportunity to testify.

g:/doc/don/ctc. test


1

‘Testimony of Captain James Hollenbach 3
for the House Civil Service Subcommittee

large number of listed organizations, the vast majority of DOD personnel are pleased to have
the right to make such a choice, The average soldier, sailor, airman, Marine, or DOD civilian
employee is intelligent and well informed. Turning back the clock is not a viable option; he or
she will notice any significant change to CFC operations and will be resentful if their choices
become more restricted than is the case today. We must remember that giving is voluntary; we
don’t have to do it. It is my opinion that if the government tries to limit the range of charities
to whom federal workers can contribute, then a great number of these donors will simply walk
away from the CFC, refusing to donate at all. This would clearly have an adverse affect on the
health and human welfare of our nation, particularly during a time when the government will
be relying on charitable organizations to assume a greater burden for caring for our citizens,

Thave served in several capacities administering the Combined Federal Campaign in the various
squadrons, ships, and shore commands to which I have been assigned. Some people have
suggested that the federal government spends too much of the taxpayer’s money supporting the
CFC. I don’t know where such charges come from, but my experience as a Navy officer would
support exactly the opposite conclusion. CFC administration is almost always a collateral duty,
and one that doesn’t take a lot of time. People do it in addition to, not in place of, their regular
jobs. Meanwhile the real dollar costs are borne by the charities themselves, just as fundraising
costs are usually financed.

I, my family, my shipmates, and many friends around the globe have all benefitted from services
made possible by CFC donations. My family’s list includes medical services, spiritual
counseling, adoption services, and assistance while traveling oversees. My son, a Korean
orphan who graduates from High School this month, came to us via Holt International Children’s
Services. My military career was probably saved when my life was tumed around as a result
of coming to understand the good news of Jesus Christ through participation in the Officer's
Christian Fellowship and Navigators activities while 1 was stationed oversees.


200

Naonal Fish and Wide Foundation, should ily cover the
‘imated $180,000 car ofthe TU mies

The watershed erie out for iterated anagernen” sid
seuershed specials ack Ibo, che pincipal TU inveigacoe
forthe BeaMoc sedis “Wile we sannot oid drought, we
‘ean mig effec by cating dh negty ofthe wate
‘hed rvee channels and he tbutaies thar provide rege
fom thermal sexs and serve a spawning, itr for the

The fins pie of he prises watched umes
sayetdio spans iSmnth ered baying ie 1994, wi
se her the btn dance 0 pes coe,
Sd estore he wld wou heres ofthe Bee ve ond
Willows Ck ;

The wien sad fh on ph fs fr
will eanine
dency and exe of pin ad non-point pon:
SInace fw charters meen co mann and

sncrese wild tout producivity whi the waterbed:

‘Estimates for he watershed’ wid out populations;

* Location and condition of etal out habitat

+ The enent to which tow ute mainstem versus eibutary

abit for spawning,

‘Location and nace of absiructions preventing ace
jury babs ria fo spaning or euge fom mainstem

‘ermal ste, nd

«The veal nophyical meri ofthe BeaMoc watehed in

comparison to undirsbed habia of terion.

"We want re spend our mney why. The fs wep i to
acquire previous dis,” explained Imhof at a May pres oom
ference held 1 announce the projec. ‘Over the decades, at
reservoir projects and the like have been proposed for the
venerable of ged slid baseline data have ben cle
cl, ony to gaer dure. We be sarin by doing a thorough
analysis ofthe data cht aready ent. Then we wil ar ling
{othe sing piers with eld wud”

AUTUMN 1994 THAT mabe 29


16

Mr. Mica. Ms. Hall, did you have any comments?

Ms. HALL. Not at this time.

Mr. Mica. OK. Thank you.

We will proceed with several questions for you, Ms. Green.

First of all, let’s take a minute and look at the cost. Your testi-
mony today directly conflicts with the 1988 study. As I understand
it, in 1988, on page 5 of the CFC task force report, it states that
with these three additional components factored in, an estimate of
the size of the CFC subsidy in the neighborhood of $55 million to
$60 million would not appear unreasonable. So you're saying that
since 1988 you think we're actually spending Jess money than they
projected then for this activity?

Ms. GREEN. Well, after going back and looking at their projec-
tions and several of the flaws that I mentioned, one is that they
used the National Capital Area Campaign to base their estimate on
and the campaign here is a much larger campaign because we have
a higher concentration of Federal employees and also we have the
leadership of the Federal Government here which is encouraging
the Federal employees’ participation. So we thought it would be
more representative if we went to 40 campaigns across the country,
the ones that are the largest campaigns, to get more accurate fig-
ures. We could not find in our records where the 1988 calculation
was done to look at the $55 million or $60 million figure. But, we
came nowhere near that.

Mr. Mica. Well, it seems like they did a rather in-depth review
of the activities, and they concluded it was $55 million to $60 mil-
lion in 1988. It is hard for me to believe that in this day and age
the costs would actually go down. You are disputing some of the
basis on which they calculated this figures.

Ms. GREEN. Exactly. Not that the cost went down, that it was
never that high.

Mr. Mica. Now it’s my understanding that some of the -osts are
recouped from the charity fees that are involved. The pa:ticipants,
there is some cost to them. What percentage is that or what
amount of this $22 million?

Ms. GREEN. Gerri, would you?

Ms. HALL. That is not included in that $22 million.

Mr. Mica. That’s on top.

Ms. HALL. Right. That is recovered from the campaigns, and the
administrative expenses run an average of 7 percent of the dona-
tions.

Mr. Mica. So they are paying about 7 percent of the total figure,
the cost, is that correct?

Ms. HALL. By campaign. Each individual campaign is reimbursed
for their administrative expenses, and that averages 7 percent per
campaign.

Mr. Mica. Now, that’s reimbursement or you are subtracting that
from their distribution?

Ms. HALL. It is subtracted from the distribution. However, the
entity which administers the campaign, the principal combined
fund organization, puts out the cost up front and is reimbursed.

Mr. Mica. Well, I don’t have any problem with the Federal Gov-
ernment being sponsor of a Combined Federal Campaign; and, in
fact, I would encourage it. And I think that the truly charitable or-


160

We have participated in the cFc for’over a decade. CFC
donors contributed approximately $180,000 to the Legal Defense
Fund during fiscal year '93-'94. We estimate that roughly 20,000
federal employees give to us through the CFC.?

The Legal Defense Fund qualified for charitable status under
section 501(c)3 of the Internal Revenue Code in 1971. We comply
with section 501(c)3’s rigorous limitations on lobbying and other
legislative activities. (We are completely independent from the
Sierra Club, an organization that is not currently a 501(c)3
organization and that is not participating in the CFC.) The
Internal Revenue Service requires, and the Legal Defénse Fund
ensures, that all of the cases it takes on serve a broad public
interest.

III. igibi uld Not.
A. Employee Choices Shi Respect.

Federal employees are a respected work force of educated,
skilled and dedicated individuals serving their country. They
are capable of making their own decisions as to whether to donate
to charity and which charities are worthy of their support. A
contrary message is sent by Congressional efforts to limit their
CFC choices.

As the campaign is currently structured, employees are free
to choose from an extensive and inclusive list of charitable
organizations that serve the public. Employees are free to
contribute to organizations whose goals they agree with, or not
to contribute to any groups at all. Because the campaign is
based on open choice, the campaign provides a fair opportunity
both for charities and donors. Arbitrarily limiting that choice
to certain types of charities, such as so-called "non-advocacy"
groups, creates its own bias toward particular activities (by
excluding other activities) and undermines the donor’s free
choice.

The federal workplace reflects the diversity and
individualism of America. Having employees with different
backgrounds, interests, and attitudes fosters creative thinking,
effective teamwork, and personal empowerment in the workplace.
Naturally, individuals of heterogenous backgrounds will have
different charitable causes as priorities. Restricting their CFC
choices to a limited group of charities stifles not only an

2 Much of CFC giving is anonymous, and therefore a precise
number of donors is not available. The 20,000 number quoted
represents our total CFC annual revenue ($175,000) divided by an
average CFC contribution of approximately $90.

3


99

Mr. Ralston mentioned the coercion that was removed from the
campaign, which was a positive reform. But why did the campaign
drop by a half a million dollars in 1980, the year after the political
advocacy groups went in the campaign? And why has it never re-
covered from that and, in fact, gone down $200,000 or $300,000
more since then?

The Federal employees have said very clearly that they do not
like it. It can’t be attributed to the coercion problem, which changes
were made before 1980. Why did it drop all of a sudden in 1980
when the political advocacy groups were admitted to the CFC? It
did because, specific groups objected to Planned Parenthood, the
unions objected to the Right to Work Committee, and on and on for
the different groups that were admitted.

The Federal employees have told us there were complaints. As
previous testimony related, in the private sector results have gone
up in participation when choice is greater. Why have results gone
down in the Federal Government? I think it’s because we are in-
volved in many, many, many more political advocacy groups than
in the private sector, where that’s much less likely to happen.

Congresswoman Morella says the campaign is not broken. The
fact of the matter is, it is broken. There are some 700 or 800,000
fewer Federal employees participating in this campaign because it
is broken.

The fact of the matter is, there is no such thing as a criteria-free
campaign. Enormous numbers of hours are spent in this campaign
to decide who gets in. We have heard testimony on how difficult it
is.

Congresswoman Morella mentioned an educational group. Well,
actually educational groups are not supposed to be in this cam-
paign. That’s why it was so difficult for them to get in. And the fact
of the matter is, most educational groups are not in the campaign.

If you really want to open this up to everybody, let’s open it up
to everybody and allow everybody. I, frankly, think the Republican
party is one of the most effective advocacy groups in the country.
And if we want to let advocacy groups in, let’s let the Republican
party in.

One of the witnesses mentioned trade associations. Well, there
are thousands of 501(c)(3)’s. Let them all in.

How about every college and university in the United States in?
They attract very well. Let’s let them in, too.

How about candidates? I think that would be nice, too. Why can’t
we support candidates through the Combined Federal Campaign?

What about churches? Right now, churches get about 70 percent
of the charitable free choices that people make in the private sec-
tor. Let’s let churches in.

None of these are in now. The fact of the matter is, we're letting
a privileged group in the campaign right now.

As the Supreme Court said, it’s legitimate for the government to
decide what groups get in and what groups don’t. There is no rea-
son why we cannot go back to the original purpose of this cam-
paign. Every President from John Kennedy to Ronald Reagan said
it should be restricted to health and welfare organizations.

There is no reason that we can’t exclude groups that primarily
lobby or litigate or advocate causes or, I would add, that are affili-


21

Tm not saying, Mr. Chairman, that we don’t need some reform,
that we do not need to look at this very closely. I’m just saying that
when we make a decision, at least when I make a decision, I want
to make a decision that is informed and is based upon fact rather
than someone saying it cost $55 million to $60 million in order to
operate the campaign. So I am going to be looking for some num-

Ts.

I thank you. That concludes my questioning.

Mr. Mica. I thank the gentleman.

Another member of our panel has arrived, Mrs. Morella, the gen-
tlewoman from Maryland, and I would recognize her for opening
statement or questions or any combination of the above. Welcome.

Mrs. MoRELLA. Thank you very much, Mr. Chairman.

I have looked forward to this hearing, and I want to thank you
for calling it. Because there has been a lot of concern about the
CFC, and I have certainly heard from a lot of people with regard
to the whole question of whether or not there should be some
changes made. I had thought about sending the correspondence to
the chairman, stamped respectfully referred to Chairman Mica, but
I think we will learn a great deal from this hearing.

My opening statement is more lengthy than some of the com-
ments I want to make before I ask a question of Ms. Green.

Actually, the continuous improvement of governmental programs
and policies is playing a very vital role in keeping our government
responsive to the people. But the saying, if it ain’t broke, don’t fix
it think still has relevance even in this government, even in this

louse.

I can’t see that, really, the CFC is broken. In fact, I see a very
healthy and successful program, where charitable contributions are
approximately $200 million a year, where administrative costs for
participating charities are low, where work flow interruptions are
minimal, and where 100 percent of the designated donations go to
the charities of choice. I want to emphasize—charities of choice.

As issues have grown more complex, the CFC, like any successful
program and organization, has evolved from its embryonic state in
the 1960’s. And yet it stands as a symbol of goodwill, and that’s
something that we shouldn’t lose sight of in this discussion. The
funds collected through the program have been instrumental in as-
suring that children receive quality educations and less fortunate
individuals receive food and other needed services.

I wanted to also point out the restriction—the restricting of CFC
eligibility raises another issue that troubles me. It presupposes
that Federal workers cannot and should not make their own deci-
sions in selecting charitable organizations. As you know, I have im-
mense respect for Federal workers. I have seen the faces of those
who have contributed to CFC. I have shared their pride in receiv-
ing Eagle awards for contributions of 1 percent of their salaries.

These are uplifting experiences and, heaven knows, we need
them now more than ever. And even with all that has happened
to Federal workers and all that is proposed to happen, Federal
workers remain the most giving, the most resilient, the most pro-
fessional workers in the country; and I would have t_ problems
about the concept of their freedom of choice being limited in this
respect.


Gender (By observation)

1. Male

Area; (PRE-CODE)
1. Northeast

3. South

47.0

19.8

Female

Midwest

West

12.0

20.3


95

with attorneys from the NRA General Counsel's Office, whose services are volunteered to the fund.

North Carolina; Roger D. Woods. Woods is an employee of the City of Wilmington While
off duty, he was attacked by a man in a parking lot. Woods shot and wounded the man. Woods was
charged with assault with a deadly weapon. During the trial, on May 14, 1992, the Superior Court
granted a defense motion to dismiss based on a plea of self-defense. The city fired Woods even
though he acted in self-defense Woods is asking for reinstatement. The issue is whether the firing
is contrary to public policy. The established law or public policy of North Carolina supports the right
to bear arms and to defend one's life. A lawsuit was filed in July, 1994, in the Superior Court of New
Hanover County.

Oregon; James Poston. This is an appeal to the Oregon Court of Appeals. The issue is
whether a minor may arm himself to protect his mother. All briefs have been filed. Oral arguments
took place on November 13, 1992 The Court of Appeals held on April 20, 1994, that it is proper for
a minor to arm himself to protect his mother based on a reasonable appearance of danger

Texas; Jolie Blackburn. Ms. Blackbum is a college student. She slew a man who was under
the influence of narcotics and who was attempting a burglary. She is claiming self-defense and
justifiable homicide against a misdemeanor charge of negligent homicide and against a civi! lawsuit

Virginia, Rayna Ross Marine Lance Corporal Ross shot and killed a man armed with a
bayonet who broke into her home at night. Civilian authorities found no reason to prosecute her.
However, the Marine Corps proceeded against her with an Article 32 investigation. She was
represented by an attorney from NRA's Office of General Counsel, volunteered to the fund, and who
is a retired Marine Corps Colonel After the hearing, the commanding general concluded on March
14, 1994, that no charges should be placed against Cpl, Ross

Wisconsin, State v. Pesze Ronald G. Pezze was informed by his cleaning lady on July 27,
1991, at 4:30 a.m, that burglars had broken into his place of business Pezze armed himself with a
pistol and confronted two burglars armed with a knife. They turned toward him. Pezze fired and hit
both burglars, killing one and wounding one. He was charged with negligent operation of a firearm
resulting in death and negligent operation of a firearm resulting in an injury. On Masch 5, 1992, a jury
found Pezze not guilty of all charges. The jurors felt that a victim of a nighttime burglary, conftonted
by two burglars armed with a knife, is justified in fearing for his life and firing his pistol.

FCRLDF also distributes books and law review articles for educational purposes, and
conducts a student writing contest The publications include the book TO KEEP AND BEAR
ARMS, by Joyce Lee Malcolm, a historian, published by Harvard University Press in 1994. Providing
‘educators and libraries educational material at no cost is a public benefit.


33

Is it true that the National Right to Work Committee is actually
a recipient of this stuff? It is. Well, so there seemed to be some rea-
son for reform.

And I would hope that we would proceed with an interest in con-
structive reform for what the Combined Federal Campaign does
but that we would proceed on the basis of factual information on
the most objective and constructive a basis as possible.

One of the facts that would be useful is how many complaints
have actually been registered about the CFC other than the visible
one from Mr. Armey. Can Ms. Hall or Ms. Green address that? Is
that appropriate to ask them? How many complaints do you get
about the CFC?

Ms. HALL. We receive very few complaints.

We did a search in terms of our office to see what kind of issues
come in both in our immediate office and in our congressional rela-
tions office. And the types of complaints we actually receive, albeit
few, have to do with the inclusion or exclusion, normally, of a given
organization. A particular organization applied and was denied,
and someone complains that she should have been let in. But we
receive very few complaints, certainly during Ms. Green’s tenure,
regarding the program itself and the criteria.

Mr. Moran. And you have pretty much taken the attitude the
more the merrier in terms of inclusion on the list. How many peo-
ple contribute to the Combined Federal Campaign?

Ms. HALL. Fifty percent of the Federal employees that are solic-
ited contribute.

Mr. Moran. So we are talking about over a million people.

Ms. HALL. Yes.

Mr. Moran. About how many complaints do you get in a year?

Ms. HALL. The complaints are very few. We get less than—less
than 20 a year going back the last 3 years.

Mr. Moran. So that is so few, that is a point zero, zero, zero.
That’s infinitesimal compared to the number of people who partici-
pate. So this is not something that is a major problem, apparently,
from the participants.

But we ought to look at it, and I suppose we ought to consider
whether there is any real subsidy in terms of taxpayer support sub-
sidy. I can’t imagine that the participants have too much problem
in terms of the inclusion or exclusion of organizations since you
have got so many that run the gamut from the right to the left
idealogically and cover just about every conceivable human need
that you can imagine. So I don’t know why they would be complain-
ing about that.

I guess we need to look at what kind of indirect and direct sub-
sidy might be provided this. But I can’t imagine it’s very substan-
tial. And I do know that the amount of volunteer work that is fi-
nanced, the amount of charitable contributions that go to well-de-
serving organizations is significant.

And, in fact, if we did not have the Combined Federal Campaign
I know, for one, this Washington metropolitan area would not be
as fine a place to live as it is and that a lot of people would suffer
as a result, people who are dependent upon the charity, the com-


168

Representative John L. Mica
Subcommittee on Civil Service
June 13, 1995

Page Two

We can hardly blame the advocacy groups for their full-
scale press in Washington. Washington is simply too big, too
rich, too influential. Perhaps with the current trend in
politics there will be a enali step of return to states and
localities, in terms of economics and power. Then this frenzy
of activity in the lobbying area could cool down and return to
actual "works," at the grass roots level. Your situation with
respect to the CFC is only symptomatic of our whole social
structure: too Washington heavy.

Best wishes in your upcoming effort to return the charity
rive to charity.

Sincer:

Charles Cc. Post
Executive Director

ccp/at


183

-2-
United States Court of Appeals for the District of Columbia Circuit, 727 F.24 1247 (D.C. Cir.
1984), was overturned in the United States Supreme Court sub nomine Cornelius v. NAACP
Legal Defense and Educational Fund, Inc., 473 U.S. 788 (1985).'' The Supreme Court
vindicated the constitutionality of President Reagan's order. It held that, although charitable
solicitation is protected speech, the CFC is a nonpublic forum and the President's reasons for
excluding legal defense and political advocacy groups from the CFC appear on their face to meet
the applicable standard of reasonableness." In particular, the opinion for the Court observed:

Here the President could reasonably conclude that a dollar directly spent on providing
food or shelter to the needy is more beneficial than a dotlar spent on litigation that might
or might not result in aid to the needy. Moreover, avoiding the appearance of political
favoritism is a valid justification for limiting speech in a nonpublic forum. **** In
furthering this interest, the Government is not bound by decisions of other executive
agencies made in other contexts. Thus, respondent's tax status, while perhaps relevant,
does not determine the reasonableness of the Governments conclusion thal participation
by such agencies in the CFC will create the appearance of favoritism.”

The victory in the Supreme Court was hard-won and decisive.

| The full texts of the Supreme Court's decision in Cornelius v. NAACP
Legal Defense and Educational Fund, Inc., 473 U.S. 788 (1985), including
separate opinions of dissenting justices, will be found at the Appendix, Exhibit
28. The case was thoroughly briefed, having attracted several weighty offerings
from influential amici. A listing of the briefs of counsel was published at 87
LE24 815-816, which will also be found reproduced at the Appendix, Exhibit
29.

® Comelius, supra, 473 U.S. at 797.

© Comelius, supra, 473 U.S. at 809.


17

anizations—those that deal with human health and welfare, direct
Benefits should have our support.

I begin to question when a number of these advocacy groups
have wormed their way into the process, either through the Court
process or congressional pressure. We have not been able to get a
complete list of what each of these groups receive. Can you provide
our subcommittee with a list of the specific amounts that each and
every organization receives, their total contribution, and the net
they receive? Can you provide us with that, Ms. Green?

Ms. GREEN. Not without some difficulty. The OPM——

Mr. Mica. So you’re taking in $200 million.

Ms. GREEN. Yes.

Mr. Mica. And you have taxpayer money involved in the collec-
tion of this and a taxpayer agency, and you can’t provide this sub-
committee or the Congress with a list of who is getting what?

Ms. GREEN. OPM manages the national campaign. We have the
information on the national campaign. The federations that man-
age the local campaigns have the information for each of the orga-
nizations that are under their federation.

Mr. Mica. One of the changes that I would like to see is that
there be some public disclosure of who is getting what and where
the money goes. Is that possible?

Ms. GREEN. Certainly. And the federations, I’m sure, would be
glad to provide that information for the charitable organizations
that come under their umbrella.

Mr. Mica. So that is a change that OPM could support.

Ms. GREEN, Yes.

Mr. Mica. OK.

Another question is, should the taxpayer be responsible for this
activity and to what degree? Do you believe that we should in-
crease the administrative or overhead costs or the charges to these
agencies for participation?

Ms. GREEN. Well, it certainly is a way of recouping some of the
costs. We could have a—if the committee so desires, we could cer-
tainly have something similar to a 1, one-half percent charge to
participate in the campaign.

Mr. Mica. Do you announce that by agency rule or is there some
standard that is applied for charging back a cost?

Ms. GREEN. To make a change like that, Gerri? I think it would
be statutory.

Ms. HALL. If you would like to have a charge, an assessment, for
the organizations to participate?

Mr. Mica. Now, are you doing it under legislative or rulemaking
authority?

Ms. HALL. I believe it would be legislative.

Mr. Mica. OK. So that would require a legislative change in as-
sessing a fee. It couldn’t be done by rule.

Ms. GREEN. No, it would have to be legislative.

Mr. Mica. All right. And could you support it if we propose some-
thing of that nature so we have a nod in the affirmative?

Ms. GREEN. Certainly.

Mr. Mica. Are there any other changes? One problem is the defi-
nitions of the organizations that qualify—and I would guess you
used a general IRS category for definition. Are there any other defi-


61

Page Two.

Our experience leads us to believe that federal employees
like the CPC and the variety of charity choices it provide
Since the legislation of 1987, giving levels in the CFC have
increased at twice the rate of growth in traditional, limited
choice campaigns.

In fact, giving to *traditional* charity menbers of Anerica’a
Charities increased by 7¥ between 1988-1994. There are hundreds
of additional ‘traditional* charities participating in the CFC
‘today compared to the 19808.

While I do not have data for charities other than our
members, I believe that the group of "traditional" charities in
the CFC today is receiving millions of dollars more annually than
before choicea were expanded in 1987.

1 believe that giving to “traditional charities has
increased, not decreased, because of the added choices now
available.

Overall giving in the CFC has skyrocketed since 1979,
increasing from $82.8 million to $196.8 million in 1993, an
increase of 137%. Between 1987 and 1991 the average contribution
rose from $59.11 to $89.32. I believe that federal employees have
demonstrated their preference for the added choices in the CFC by
their increased support.

Second, the free market works in the CFC, just as it does in
corporate campaigns providing expanded choices. _Increased
competition among charities is good. Charities are forced to be
wore efficient, to lower their fundraising costa, and to deliver
higher quality programs and services.

‘Research and campaign experience, especially in the private
ctor, has consistently shown that employees want more choices,
not leas. Like the CFC, numerous corporations provide hundreds of
charity choices to their employees.

Corporations are providing these choices because the
charities listed reflect the diverse interests of their employees


130

-19-
serve needs of human health and welfare.

(2) To meet these objectives, eligibility for participation in the Combined Federal
Campaign shall be limited to voluntary, charitable, health and welfare agencies that
Provide or support direct health and welfare services to individuals or their families.
Such direct health and welfare services must be available to Federal employees in the
local campaign solicitation area, unless they are rendered to needy persons overseas.
Such services must directly benefit human beings, whether children, youth, adults, the
aged, the ill and infirm, or the mentally or physically handicapped. Such services must
consist of care, research or education in the fields of human health or social adjustment
and rehabilitation; relief of victims of natural disasters and other emergencies; or
assistance to those who are impoverished and therefore in need of food, shelter, clothing,
education, and basic human welfare services.

@)__ Agencies that seek to influence the outcomes of elections or the determination of

public policy through political activity or advocacy, lobbying. or litigation on behalf of

parties other than themselves shall not be deemed charitable health and welfare agencies

and shall not be eligible to participate in the Combined Federal Campaign.

Announcement of the Executive Order's issuance was promptly met, as reported in The
New York Times on February 17, 1983, with threats of litigation from a coalition of legal
advocacy organizations." But it was greeted, as well, by strong expressions of support. The
Washington Post editorialized on Sunday, February 20, 1983, that President Reagan's exclusion
of political and advocacy groups from the CFC was “Fair enough, The government, through
the CFC, should not be 2 collection agent for clearly political groups." The Minneapolis Star
and Tribune weighed in on March 4, 1983, opining that President Reagan's “wise action
removes an unfortunate pall from national charity drives" and declaring:

*.,.Reagan ordered that the combined campaign exclude agencies ‘that seek to influence

the outcomes of elections or the determination of public policy through political activity
‘or advocacy, lobbying or litigation on behalf of parties other than themselves.’ Good for

5 See Appendix, Exhibit 22.

% See Appendix, Exhibit 23.


(6)

114

-3-
worker hours to its annual execution at the local level, and the processing of
payroll-deduction pledges and contributions through the pay system, imposes costs
‘on the taxpayers.*

Operation of the CFC for the benefit of political, legal advocacy, and religious
organizations aggravates the suspicion of donors and the sense of taxpayers that

their money is being used, without their consent, for the support of causes that

they oppose.

Thave been a student of the CFC and its travails for a decade and a half. Indeed, as the

from early

General Counsel of the United States Office of Personnel Management for nearly five years,

1981 until the end of 1985, I was the seniormost official of the Federal Government

charged with day-to-day responsibility for the governmentwide management of the CFC. It may
seem peculiar that a Jaw department would have operational responsibility for any major
program, let alone a workplace charity drive -- and it is. But the CFC has always been so prone
to litigation and controversy, and the legal issues surrounding it have been seemingly so
constitutionally sensitive, that it became difficult for a time for anyone but lawyers to make the
hard decisions necessary for the program to go forward. Go forward it has, but always in a

cloud of anger, mistrust, suspicion, greed, and lawsuits

Yet, so powerful is the philanthropic inclination of the Federal workforce that, despite

4 OPM admits to costs of $13,673,663 for the 1991 campaign; $14,597,951

for the 1992 campaign; and $14,918,102 for the 1993 campaign. Source of
data: OPM, March 31, 1995. I do not know how these numbers were
determined. It is worth noting that costs are increasing while dollars raised,
numbers of solicitations, numbers of participants, and participation rates are all
declining; and in 1993 costs of administration exceeded undesignated
contributions.


116

-5-
Background

‘The origins of charitable solicitation within the Federal workforce are undocumented.

‘They probably go back to the very earliest days of a Federal service in the infant Republi
By the end of World War I! one routinely found charities conducting appeals in Federal
installations around the world, Some solicitations were coordinated with Federal managers;
others were undertaken on an ad hoc basis, often with no greater sophistication than the passing
around of an empty coffee can. The heads of some Federal facilities permitted no solicitations
whatsoever; at ather Federal worksites, no restrictions were imposed, and it was not uncommon
for a collection to be taken up each week on behalf of one charity or another. In some instances

the solicitors were rank-and-file employees; in other instances, with obviously greater risk of

One early observer of America, Alexis de Tocqueville, remarked on how
“in the United States...salaries scem to diminish as the power of the recipients
increases." DEMOCRACY iN AMERICA 213 (12th ed. 1848) (Anchor ed. 1969).
By contrast, he argued, “under aristocratic rule high functionaries receive very
large emoluments, whereas inferior ones often have hardly enough to live on.”
Ibid, Thus "In America officials of secondary rank are better paid than
elsewhere, but high officials are much less well paid." Id. at 212. As to the
spirit of the early American civil service, Tocqueville found that "American
public officials blend with the miass of citizens.... This external simplicity of
persons in authority is not due to some peculiar twist in the American character
but derives from the fundamental principles of their society." id. at 203. Thus
Tocqueville could praise American civil servants with words that may seem a bit
florid in light of the intrusiveress of the modem bureaucratic state, but which
nonetheless even now capture something vital about the relationship between
American public servants and the society of which they are a part: "I can
imagine no one more straighiforward in his manners, accessible to all, attentive
to requests, and civil in his answers than an American public official. I like this
natural demeanor of democratic government and the inner authority which goes
‘mote with the office than with the official, and more with the man than with
external symbols of power, for there is something admirably virile therein.” [bid.
It is easy to imagine such civil servants taking the lead, as volunteers, in lending
succor to the afflicted when misery or disaster struck their respective local
‘communities.



4

affects the contributions that are being made to the organization
because of the questions that have been raised about it.

So, again, I want to commend you for raising the question be-
cause I think it is important for the Congress and the administra-
tion to address the issue to make absolutely sure that the combined
Federal program remains true to those who work so very hard, so
very diligently and devote so much of their time and money to
charitable causes.

What is troubling to me, as I know it is to you, is the growing
presence of these advocacy groups representing both sides—often-
times several sides—of the ideological spectrum who now receive
charitable donations from the CFC, but whose organizational mis-
sion clearly does not seem to fit the conventional definition of a
charitable organization. This has happened over a period of time
over a period of years where these organizations have been added
to the roster of eligible organizations.

Perhaps these groups do, in fact—I would not dispute the fact—
offer valuable services; but the larger issue before us is whether or
not it’s appropriate for the American taxpayer to subsidize, in ef-
fect, the collection of funds from Federal workers for advocacy
groups.

We put ourselves in the shoes of our constituents who I think
would agree that the CFC is perhaps another example of a govern-
ment program that started out with clearly the best of intentions
but has over a period of time gotten out of control. So I’m looking
forward to hearing the testimony being presented today and, again,
want to thank you and commend you, Mr. Chairman, for calling
this hearing.

Mr. Mica. Thank you.

I would now yield to Mr. Mascara, the gentleman from Penn-

sylvania, for his opening remarks.

Mr. MAscara. you, Mr. Chairman. Good morning. It’s
good to be back in Washington, DC, after spending a busy and pro-

luctive week back in my Pennsylvania district.

The only trouble is it is hot and humid and controversial subjects
seem to be our only greeters this morning. From the moment the
word went out in the charitable community that this committee
wanted to limit so-called political and ideological advocacy groups
from participating in the annual combined campaign, my fax began
to hum, and the post office began delivering stacks of letters.

I have received in the neighborhood of 100 letters from all types
of charitable groups, including approximately 10 from my part of
the world. They range from groups representing refugees to the
National Right to Life Educational ist Fund. They include
PCTV-21, a community television station in Pittsburgh, and a
foundation from McKeesport, PA, which said it received $654 as a
result of last year’s campaign.

Letters from Oregon, California, Durham, NC, Boulder, CO, and
Rochester, NH, the message was the same: The current Combined
Federal Campaign allows groups of all stripes and objectives to
participate. We like it that way. Don’t fix it. It isn’t broke.

I think we should heed that advice. OPM officials will testify this
morning that the cost for operating the annual campaign is much
less than the $50 million to $60 million figure cited in the Chair-


93

Racial and Gender Discrimination

Massachusetts; Muriel Kendrix. Ms. Kendrix felt that she was denied a license to carry a
pistol on account of her gender (female) and race (black). Subsequent to the filing of a lawsuit, the
Chief of Police capitulated and granted her a license

New Jersey; Theodore Merriweather. This was an appeal from a denial of an application
to obtain a permit to carry a pistol. Mr. Merriweather claimed his application was denied on the basis
of his race (black) New Jersey's constitutional right to self-defense was raised. The filing of all
briefs was completed on December 18, 1992 The Superior Court, Appellate Division, denied relief
in a per curiam unpublished opinion on August 11, 1993. An appeal to the New Jersey Supreme
‘Court was not taken on account of a procedural problem: key issues were not raised in the trial court,
but were raised for the first time on appeal.

Discrimination Against The Elderly

New Jersey; John Pilate. Mr. Pilate was turned down for applications to purchase firearms
after almost a 10-month wait because he is too old (79), bis fingerprints will not be processed because
of his age, and because he wants the firearm for protection. The appeal to the Superior Coun raised
the constitutional right to self-defense, an age discrimination statute, and the statutory requirement
to act within 30 days on a firearm purchase application. Judge Jonathan N. Harris found denial of
the permit to purchase arbitrary, capricious, and unreasonable. The judge found that personal
protection is a legitimate and traditional reason for possessing a firearm in the home, and that the
state waives its right to utilize fingerprints on applicants for a purchase permit after 75 years of age
by its decision to quit processing fingerprints of senior citizens

Low-Income Persons Should Not Suffer Discrimination in Enjoyment of Rights

Maine, Doe v. Portland Housing Authority. ‘The Portland Housing Authority has a lease
provision forbidding tenants to possess any firearm, Since the housing authority was created pursuant
to Main Revised Statutes title 30A, § 4721, there is state action constituting governmental
infringement. Article I, § | and § 16 of the Maine Constitution guarantee a right to keep and bear
arms for defensive purposes. Article 1, § 6A guarantees due process, equal protection, and
nondiscrimination, A lawsuit was filed in Superior Court seeking invalidation of the lease provisions,
damages, and costs for plaintiffs, On December 30, 1993, the lease provision was held a reasonable
exercise of the police power. An appeal was taken by Doe to the Maine Supreme Court, and oral
argument occurred on September 2!, 1994, The fund also filed an amicus curiae brief at no cost
‘On April 4, 1995, the Maine Supreme Court voided the lease provision forbidding tenants to possess
firearms. This decision allows poor people to enjoy the civil right to keep a gun in the home for
defense and security without fear of losing the public benefit of public housing


38

I also have been asked to say that I am representing the views
of the Free Speech Coalition, which is an organization that rep-
resents a wide number of groups on both the right and the left.
And I would qualify that not—of course, not all of my remarks
could be attributed to all of the members of the Free Speech Coali-
tion.

I am speaking in opposition to the proposal to remove charities
which are considered to be advocacy organizations from the Com-
bined Federal Campaign.

The National Right to Life Educational Trust Fund has experi-
enced great support within the campaign since it was opene
in the 1980’s. In the past five completed campaigns, we have re-
ceived a total of a little more than $2.4 million from Federal em-
ployees. This has not only benefited our national efforts but local
right to life education as well since we rebate about half of our net
proceeds to State right to life educational organizations.

Recent statistics indicate that the abortion rate has fallen signifi-
cantly. We believe that is good news. We believe as the Nation’s
largest right to life educational organization that we have played
a major role in saving hundreds of thousands of human lives.

We provide scientifically accurate educational literature and ma-
terials which discuss the development of the unborn baby, alter-
natives to abortion, promote adoption, et cetera. Speakers from our
affiliated chapters use anatomically correct fetal models to dem-
onstrate fetal development.

In speaking with high school classes in the past, I’ve often asked
students to write me a note anonymously at the end of class telling
me what they thought of the presentation. I have received a note
back saying, I’m pregnant. Before you came here I was going to
have an abortion. Now I’m going to have my baby.

Other speakers of ours have had wery similar experiences. What
greater health service can be provided a prenatal child than life
rather than death? This is the service we provide when we help a
woman decide in favor of live childbirth.

Obviously, many Federal employees agree and want to support
our services in the campaign. Those who do not are free to support
other organizations they deem more important.

Yet the NLR Educational Trust Fund seems certain to be elimi-
nated as an advocacy group under the proposed rule change.

Tronically, our chief ideological adversary, Planned Parenthood,
would surely remain in the campaign under the proposed changes.
They provide what is currently considered a legal medical service.
They are the largest provider of abortions in the Nation.

This example illustrates, I think dramatically, the essentially in-
surmountable difficulty in the Federal Government trying to decide
for the Federal donor what charities are worthy of their support
and which are not. Many Federal workers believe Planned Parent-
hood’s services are more valuable and wish to donate to them.
Many others believe ours are and wish to donate to us.

If it is their own money, shouldn’t they be the ones to decide
where it goes?

This also shows the problem with the argument that so-called
advocacy organizations should be eliminated because some object to
their work. Planned parenthood, we believe, will undoubtedly re-


158

SIERRA CLUB LEGAL DEFENSE FUND
STATEMENT FOR THE RECORD
HEARINGS OF THE SUBCOMMITTEE ON CIVIL SERVICE
COMMITTEE ON GOVERNMENT REFORM AND OVERSIGHT
ON THE COMBINED FEDERAL CAMPAIGN

JUNE 7, 1995

The Sierra Club Legal Defense Fund appreciates the opportunity to
submit testimony before the Subcommittee on the crucially
important issue of maintaining a fair and open Combined Federal
Campaign (CFC). The Legal Defense Fund is a non-profit public
interest law firm that represents individuals, small businesses,
Native Americans, local communities, and others in litigation to
protect our environment.

I. Overview

The CFC is the largest workplace fundraising campaign in the
country, allowing millions of federal employees to give to the
charities of their choice. . Under the current eligibility rules
the campaign has flourished, controversy over the campaign has
virtually ceased, and millions of charitable dollars are
efficiently passed to organizations who serve the public. The
CFC thus stands as a model campaign, which is driven by donor
choice and, as such, empowers the American spirit of volunteerism
by providing an easy, efficient and effective way for donors to
participate in charitable work through their payroll
contributions.

However, Chairman Mica’s proposal to limit federal employees
charitable CFC ‘choices by excluding so called "political and
ideological advocacy groups"’ would undermine that volunteer
spirit and unreasonably limit federal workers’ choices in the
campaign. By contrast, we believe that the CFC eligibility
requirements should not be altered and in particular, should not
be changed to exclude groups whose mission includes advocacy of
the public’s interest in important local, regional, national or
international issues.

This statement describes our four primary concerns with
Chairman Mica’s proposal:

+ "Mica Calls for End of Federal Collection for Political
Advocacy Groups," Press Release from the Office of Congressman John
L. Mica.


125

-16-
con July 6, 1982, final rules were promulgated.” In spirit these rules represented a major effort
at accommodating the aspiration expressed in 1980 by the LDF's Director-Counsel, opening
participation in the CFC as widely as practicable. The term “national voluntary health and
welfare agencies and such other national voluntary agencies as may be appropriate” was fleshed
out, essentially tracking the criteria for tax-exempt status consistent with Section 501(c)(3)
of the Internal Revenue Code, 26 U.S.C. § 501(c)(3). “Delivery of legal services to the poor
and indigent, and defense of human and civil rights secured by law" was expressly included."*
Charities would be invited to apply each year to participate in the CFC, either on a nationwide
basis, if their activities so warranted, or locale by locale,” their applications would be tested
against OPM’s liberal eligibility standards by a National Eligibility Committee” or the Local
Federal Coordinating Committee for each locai campaign, respectively.” The Local Federal
Coordinating Committee, consisting of leaders of the Federal agencies in a local campaign area
(typically a Federal Executive Board or a Federal Regional Council) designated for the purpose

by the Director of OPM,” was to manage the local CFC and to identify a Principal

» 47 FEDERAL REGISTER 29496 (July 6, 1992). A copy of the full text of
the 1992 regulations is set forth at the Appendix, Exhibit 8,

TM 5 CER § 950.101(a) (1982).

% 5 CER § 950.101(a)(3}(vii) (1982) (emphasis added).
% 5 CER § 950.201(b) (1982).

7” 5 CER § 950.407(4) (1982).

5 CFR § 950.503(b) (1982).

»® 5 CFR § 950.211 (1982).

“© 5 CER §§ 950.505, 950.509 (1982).


100

ated with groups that do. There’s no reason why we can’t do it, and
I urge Congress to return to the policies of those former Presidents
and restrict membership in the Combined Federal Campaign to
health and welfare organizations. And I commend you for bringing
this difficult problem to public attention.

Thank you.

Mr. Mica. I thank you, Dr. Devine. We never have any problem
knowing exactly where you stand on these issues, and I appreciate
your candor. You should have been in the other panel.

Mr. Jeremiah Barrett, former Director of CFC Operations. We
recognize you.

Mr. BARRETT. Thank you.

I was the Director of the Office of Combined Federal Campaign
Operations from August 1988, through December 1991. Previously,
I was a Special Assistant to the General Counsel for CFC.

Mr. Mica. Can you pull the mike a little bit closer? Thank you.

Mr. BARRETT. Previously to that, I was the General Counsel for—
Special Assistant to the General Counsel for CFC matters. I was
also agency expert on CFC and had direct responsibility for the de-
velopment and implementation of the CFC policy in response to the
1986 legislation.

The increase in the number and types of charitable organiza-
tions, which was the objective of the legislation, raised concerns
within the Federal population. Donors objected both to the increase
in numbers and the objectives of some of these organizations.

Many employees felt that some of the organizations did not, in
their point of view, provide direct human health and welfare serv-
ices to individuals who were not traditional charities. Many felt
that the inclusion of some specific voluntary agencies was objec-
tionable because of their goals and objectives.

There were enough objections by Federal employees in speeches,
training sessions and in correspondence. I tried to address these
concerns by emphasizing an employee’s designation and assured
that their gift went to the organization they supported and no oth-
ers.

There was enough concern on a trip sponsored by the Depart-
ment of Defense overseas they asked me to specifically talk about
the issue of a rise in advocacy groups and others in the campaign
because of the concerns of the military.

The change in the CFC had an impact on campaign operations
then and I imagine it still does today. But the impacts, besides
having a negative impact, led to employees overwhelmingly des-
ignating their gifts.

I would like to address the purpose of the hearing about whether
the CFC should return to its original purpose. I don’t believe it can.

The charitable organizations that you might support as providing
human health and welfare services I see as advocacy groups whose
goals and objectives I find repugnant. Planned Parenthood World
Population has participated in the CFC for over three decades. Na-
tional Rifle Association and National Right to Work have been in
the campaign for two decades and National Right to Life for over
a decade.


41

service can be provided a prenatal child than life rather than
death. This is the service that National Right to Life Educational
Trust Fund provides when it helps a woman decide in favor of live
childbirth.

Obviously, many federal employees agree and want to support.
our services through the Combined Federal Campaign. Those who do
not are free to support other organizations and services they deem
more important. Yet, the National Right to Life Educational Trust
Fund seems certain to be eliminated as an ‘advocacy" group under
the proposed rule change. Since donations from the Combined
Federal Campaign account for about one-fourth of the National Right
to Life Educational Trust Fund budget, elimination from the CFC
would have a devastating effect on our services and the number of
lives we help save.

Ironically, our chief ideological adversary, Planned
Parenthood, would surely remain in the campaign under the proposed
changes. They provide what is currently considered a legal medical
service. Through their affiliates they perform more abortions than
any other entity in the nation.

This example illustrates dramatically the essentially
insurmountable difficulty inherent in the federal government
seeking to decide for the donor which charities are worthy of their
support and the money they give through the campaign and which are
not. Some of you, like some federal employees, may agree with and
wish to donate to Planned Parenthood. I’m sure others of you, like
other federal employees, feel our services are nore valuable. If
it’s your money being donated, shouldn’t you be able to give it
where you wish in the campaign?

This also shows the problem with the argument that so-called
“advocacy” organizations should be eliminated from the CFC because
sone object to their work.

Many Americans and federal employees object to the work of
Planned Parenthood, which seems certain to qualify as a "medical
service" provider. In fact, many, if not most of the organizations
that do qualify under the proposed changes have some who oppose
their work.

Conversely, the proposed changes seem certain to eliminate
some organizations that essentially everyone does support, such as
Mothers Against Drunk Driving. It will prove to be impossible to
eliminate all charities that someone objects to. To eliminate some
for this reason would be unfair, both to the charities and those
they serve, and to the federal workers who wish to donate their
money to them through the CFC.

Another reason that has been put forward for eliminating so-
called “advocacy” groups is that 1) the federal government

3