CFC Eligibility and Appeals Review Guidance

CFC Memorandum 2002-10

The purpose of this MEMORANDUM is to offer guidance to reduce the number of erroneous appeals in the future.   Please share this guidance with your local applicants and application reviewers.

Background

The appeals process is provided to organizations that believe they have been erroneously denied participation in the CFC.

The Office of CFC Operations received a record number of local appeals and many national appeals this year.   During our review process, a number of recurring issues emerged.   Many concern basic elements of the criteria for eligibility set forth in CFC regulations at 5 CFR Part 950.  

Appeals that are incomplete or do not address the proper regulatory requirements do not provide charities with a complete opportunity for review.   Additionally, appeals which may reveal false certification of eligibility requirements can lead to future sanctions.   As stated in the CFC regulations at 5 CFR Part 950.302(c) and 304 (c), false certification of the eligibility requirements are presumed to be deliberate and is a serious violation of CFC rules which can lead to suspension.  

The following are among the common eligibility issues that emerged from our review of appeals:

Local Appeals:

• Local federation submissions of nationally listed CFC organizations.   CFC regulations at 5 CFR §950.401(j), state that each national or local organization must individually meet all of the eligibility criteria and submit independent documentation.
• Use of IRS Form 990s and audited financial reports from a parent organization to represent local affiliate eligibility.   CFC regulations at 5 CFR §950.401(j), state that each national or local organization must individually meet all of the eligibility criteria and submit independent documentation.
• Applications to Adjacent CFCs.   CFC regulations at 5 CFR Part 950.204 (1) require that the applicant demonstrate eligibility as a local service organization and geographic adjacency when applying for participation in an adjacent campaign. A physical street address, hours of operation and a local dedicated phone number is not sufficient to qualify as a local organization in an adjacent campaign.  It is the responsibility of the applicant, whether it is an unaffiliated organization or a federation, to submit complete and accurate information to the LFCC.  This includes clearly labeled evidence of local, adjacent, or statewide presence.  For example, it is not acceptable to submit an application marked "Local Presence" for an organization that is actually applying as having presence in an adjacent campaign or as a statewide organization.
• Zero (0%) administrative and fundraising rates.   Unless the audited financial statement specifically states that applicable services were donated, organizations which do not reflect administrative and fundraising expenses on the IRS Form 990 but show such expenses on the audited financial statement will be denied.
• Appeals lacking background documentation as evidence to substantiate the appeal.   The appeal process gives an applicant the opportunity to present information on why eligibility should be granted to the applicant. Without an explanation of those reasons and supporting documentation, OPM cannot fully consider the organization's appeal.
• Lack of information to substantiate a claim of statewide presence.  CFC Memorandum 2000-7 states that an organization certifying statewide presence is required to demonstrate that it provided or conducted real services, benefits, assistance, or program activities that affected either 30% of the targeted population in the state or conducted real services, benefits, assistance or program activities covering 30% of a state's geographic boundaries.   Attachment A's used to meet this requirement often lack a description of the actual services, fail to define the target population, or fail to show the geographic area where actual services have been provided.  Total population statistics by county or claims that services are available to individuals in these counties are generally not adequate evidence of service.

National Appeals

• National Eligibility.  While CFC notes that it is not expected that an organization maintain an office in each state or foreign country, a clear showing must be made of the actual services, benefits, assistance or program activities provided in each state or foreign country.  That is, a listing of services, benefits, assistance or activities must be provided for each of the 15 or more states where coverage is claimed.  Providing the location of where organization members reside, alone, is not a sufficient clear showing to support eligibility.
• Dissemination of Information/Research.   The dissemination of information and publications, alone, does not meet the eligibility criteria in CFC regulations at 5 CFR parts 950.202 and 203 for providing real services, benefits, assistance or program activities.
• Use of lists (i.e. member listings/affiliated or support group listings).   Providing listings of affiliated support groups and a breakdown of attendees, by state, at an annual conference without further documentation of national presence is not a sufficient demonstration of real services, benefits, assistance or program activities required for national eligibility.
• Memorials, Museums and Public Recreation Facilities.  Attachment A to the application must include sufficient information to support the claim that an organization provided or conducted real services, benefits, assistance, or program activities in 15 or more different states or a foreign country over the 3-year period immediately preceding the application deadline.  CFC regulations at 5 CFR §950.202(a), require each applicant to make a clear showing of the actual services, benefits, assistance or program activities provided in each state or foreign country.  Merely listing the names and addresses of an organization's members or visitors to a facility does not satisfy national eligibility criteria.

We ask that you widely disseminate this communication to participating local federations and other interested charities.  This will help to ensure that all organizations are aware of the proper process for filing appeals and understand the applicable CFC regulations which they are appealing.

Thank you for your attention.

cc:  Heads of National Federations

Address questions or comments to cfc@opm.gov

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