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This memorandum provides guidance that will be effective with the review of 2009 CFC applications. Applicants can find additional guidance in CFC Memorandum 2006-21. We have also enclosed a copy of examples which illustrate the clear demonstration of real services, benefits, assistance or program activities as required in Attachment A.
The CFC regulations at 5 CFR § 950.202(a) require that national/international applicants provide a schedule listing those states (minimum 15) or the foreign countries (minimum 1) where the program activities have been provided over the three year period immediately preceding the start of the campaign application year and a detailed description of those activities. For example, services provided at any time from January 1, 2006 through December 31, 2008 may be documented in the 2009 CFC application. It is not required that an organization be in existence or provide services in each of the three preceding calendar years. However, because documentation describing the human health and welfare benefits, to which the organization certifies, is required to be included on Attachment A together with the schedule of real services, the organization's Attachment A must contain at least one description of a human health and welfare service in the calendar year prior to the year for which the organization is applying.
To the extent possible, applicants should document the number of beneficiaries of each service it provides. This information may assist OPM in determining that the level of the activity is not de minimis. Per CFC Memorandum 2006-21, de minimis services or benefits will not be accepted as a basis for qualification as a national or international organization.
Schedules that describe activities conducted by an entity other than the applicant, such as a chapter or a support group, must include information documenting the applicant's role in the delivery of the service. Details may include items such as whether the chapter is funded by the applicant or how the applicant assisted in the delivery of the service. Applications that fail to include a description of how the applicant, itself, provides service may result in a denial.
Generally, organizations that provide services in one location may only count the state in which services are provided toward their eligibility to participate on the national charity list. However, an organization may have beneficiaries from several states and want service to those beneficiaries considered toward the 15-state requirement to participate on the national charity list. If an organization can document that the services are subsidized or were provided free-of-charge, and list the value of those services to each of the beneficiaries, then the service to the beneficiary may be considered a service in the state of the beneficiary's residence, similar to a financial grant or scholarship. For example, a medical institution providing free housing to family members of the patient during the length of the patient's stay should list the location of the medical institution, the city/state of residence of each beneficiary, the dates of service, and the value of the housing provided to each beneficiary's family members. If the service to beneficiaries is not de minimis, it may count as service in the various states.
Just as the mere dissemination of information does not constitute a real service, similarly an organization's role in providing information to the media, such as authorship of an article for a newspaper, magazine, or journal, or serving as an interviewee or reference for a television news program, or the authorship of a book, does not in itself constitute a real service for CFC purposes. Likewise, the production and/or distribution of information, such as a report based on research, surveys conducted by the applicant organization, or publication of a policy position paper, does not, in itself, constitute an eligible service.
With regard to media-related activities, research, and reports, the applicant must describe the manner in which beneficiaries requested or used the document or information in order to establish the provision of a real services, benefit, assistance, or program activity.
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A complete copy of an organization's audited financial statements, which includes all schedules and auditor's notes, is required of all national/international applicants regardless of total revenues. The audited financial statements submitted with the CFC application must include an auditor's report on the Certified Public Accountant's (CPA) letterhead and include the signature of the CPA or the auditing firm.
An IRS Form 990 that has been amended to correct an error in the original submission must denote that it is an amended form in the appropriate box of the form. Revised forms submitted on appeal must be accompanied with a statement that the amended form is required to be filed with the IRS and has been filed, or that it is not required to be filed. Failure to check the amendment box on the form and to indicate that the form was filed or was not required to be filed may result in a denial.
The CFC regulations at 5 CFR § 950.301(c) require that federations have 15 or more charitable organizations, in addition to the federation itself, that meet the eligibility criteria of 5 CFR §§ 950.202 and 950.203. If a federation has less than 15 eligible member organizations as a result of withdrawals or denied applications, its eligible members will be listed as independent organizations. All other communications and disbursements will be sent directly to the organizations.
In the case where an organization does not have enough members to qualify as a federation, the organization may be listed as an independent organization if it qualifies as an independent organization. The organization that would have been a federation but for its insufficient number of member organizations must submit a schedule of real services, benefits, assistance, or program activities in accordance with 5 CFR § 950.202. This schedule may be provided with the federation's initial application or on appeal. To enable the federation with an insufficient number of members to qualify as an independent organization, the services must have been provided directly by the federation and not through its member organizations.
An organization that is newly formed as a result of a merger may be eligible to participate in the CFC even though it has not completed a fiscal cycle. In order to participate, the entity must provide the new organization's IRS determination letter and documentation outlining the names and Employer Identification Numbers of the organizations that were combined to create the new entity, as well as the date the merger was completed. Each of those organizations must submit the four attachments required of all organizations (schedule of real services, IRS determination letter, audited financial statements, and IRS Form 990). If each of the organizations' information meets the eligibility criteria, the newly merged entity may participate.
The CFC will use the financial information from each organization's IRS Form 990 to determine the administrative and fundraising rate that will be published in the Charity List. The AFR for the merged organization will be the aggregate sum of lines 14 and 15 from both organizations' IRS Forms 990 divided by the sum of lines 12 from both IRS Forms 990.
It is the responsibility of a national/international organization or its federation to notify the U.S. Office of Personnel Management (OPM) if it will be ceasing operations. The communication must indicate the date when the organization will no longer be able to accept contributions. The CFC will continue to disburse funds to the organization or federation until that date. After that date, all pledges to the organization or federation will be considered undesignated and disbursed in accordance with 5 CFR § 950.501.
If the organization that is no longer in business is listed in the CFC Charity List during the solicitation period, campaigns must notify donors who made a designation to the charity of its status and give them an opportunity to select another participating charity. Donors will not be provided an opportunity to change their designation after the disbursement cycle has begun.
Applicants must include as Attachment A a schedule listing a detailed description of the real services, benefits, assistance, or program activities provided or conducted in each state (minimum 15) or foreign country (minimum 1), including the year of service. (References in this guidance to "services or benefits" are intended to mean real services, benefits, assistance, or program activities as set forth at 5 CFR § 950.202.)
The Office of Personnel Management (OPM) does not require CFC applicants to use a standardized format for the schedule of services or benefits, but will not accept publications or other documents in lieu of a schedule detailing this information.
OPM will evaluate each applicant's schedule of activities on a case-by-case basis, and will consider a variety of factors, including but not limited to those set forth below. The factors set forth are not intended to be exhaustive, and organizations are encouraged to demonstrate their provision of services in any manner that is appropriate and that will allow OPM to accurately determine that real services, benefits, assistance, or program activities were provided or conducted in particular states or countries on particular dates.
Each Attachment A must describe a human health and welfare service that was provided in the calendar year prior to the campaign year to which the organization is applying. For example, failure to include in the 2009 CFC applications a description of a human health and welfare service that occurred between January 1, 2008 and December 31, 2008 will result in the denial of the application.
OPM recommends the schedule of each organization include the elements listed below:
WHO. Specify the recipient(s) of the services or benefits. Indicate the number and type of individuals or organizations that received the services or benefits. In cases where recipients are difficult to quantify, describe the target population. If the services are provided by the applicant's chapter/affiliate or another entity, such as a support group, the schedule must describe the applicant's role in the delivery of the service.
WHAT. Describe the services or benefits provided or conducted with detail and specificity. Include the quantity, value, scope, and impact of the services or benefits.
WHERE. Indicate the city and state, or specific location(s) within the foreign country(ies) where services or benefits were provided. For scholarships and grants, the location of the service or benefit is the beneficiary's residence. For memorials, museums, and public recreation facilities, the location of the service or benefit is the location of the facility or its programs or activities.
WHEN. Provide the dates on which the services or benefits were provided or conducted within the 3 year period immediately prior to the application year. For example, the dates of service set forth for participation in the 2009 CFC must fall within the time period January 1, 2006 through December 31, 2008. Events that continue or recur should include year and frequency with which they were provided or conducted (e.g. Service X monthly from June 2006 - May 2007 and bimonthly from May 2007 to December 2008. Service Y daily from June 2007 to present.)
Applicants should avoid describing services or benefits in the manner listed below, as these common pitfalls make it more difficult for OPM to determine that services or benefits have been provided in a state or country in a given year. Applicants should not:
Generalize the nature of the activity. Generalized statements regarding the nature of the activity, standardized formats, repetitive text, and checklists can prevent OPM from determining what specific real services or benefits the applicant provided, and they detract from the credibility of the application.
List services or benefits that were "offered." Services and benefits are not considered provided or conducted unless they were received by the intended recipients or otherwise have an articulated impact.
List services or benefits provided by affiliates. OPM must be able to determine from the application that services or benefits were provided by the applicant organization.
List services or benefits provided by the recipient of the applicant's services or benefits. For example, if organization A has provided a monetary grant to organization B, OPM will not accept services and benefits provided by organization B as a demonstration of organization A's services or benefits.
Claim dissemination of information and/or publications via the U.S. Postal Service, the internet, or a combination thereof as the only source of services or benefits.
Claim services or benefits that consist of mere distribution of standardized or mass-produced information to a passive audience, such as distribution of brochures, websites, or other publications when that is the only service or benefit.
Claim fundraising activity as a service or benefit.
Indicate that an activity was provided in "numerous states." OPM must be able to determine what specific services or benefits were provided in each particular state.
List the states or countries in which organization members, board members, affiliated groups, or conference attendees are located as a substitute for the state or country in which the services or benefits were provided. However, for scholarships and grants, DO list the state or country of the beneficiary's residence.
List the states of residence of visitors to a memorial, museum or public recreation facility.
Indicate the date of services as generally having been provided during the three year period immediately preceding the application year. Statements such as "since inception," "ongoing," "2003 to present," "fiscal year 2007", or "2006-2008," that do not indicate the frequency with which the particular service or benefit was provided do not sufficiently specify when the activity occurred.
CFC regulations (71 Fed. Reg. 67276 (November 20, 2006)) have been clarified to explain why "de minimis" services or benefits in any state or foreign country will not be accepted as a basis for qualification as a national or international organization.
OPM, in its sole discretion, will determine whether services or benefits are "de minimis" based on whether the services, under the facts and circumstances presented, fail to constitute more than a minimal level, type or amount.
Factors that OPM will consider in determining whether an organization's services, benefits, assistance or program activities are de minimis include, but are not limited to:
NOTE: There are many ways to present the information necessary to meet this eligibility requirement. Following is a sample format with hypothetical information from various types of organizations that provides the required details.
The dates in this document are applicable to the 2009 CFC application cycle. Organizations submitting application in future campaign years should ensure that the years represented on their Attachment A meet the requirements for that year.
Following is an example of the use of repetitive text that will not be accepted. This format does not provide sufficient information to allow OPM to determine the specific activity that was provided by the applicant during the asserted timeframe.