The Combined Federal Campaign (CFC) was started by President Kennedy in 1961and updated via a 1982 executive issued by President Reagan. Over the years, the CFC has allowed federal employees to donate to charities of their choosing, peaking in 2009 with about $282 million in donations.

Over the years, participation in the program has continued to decline from its peak – donations have been hovering around $65-70 million over the past few years. At the same time, the costs to administer the program have continued to increase. This year, the Office of Personnel Management (OPM) estimates the program will consume $22 million in outside contractor fees and listing fees to administer the program.

This means for every $1 a federal employee donates, about $0.33 (or 33%) does not reach the charity for which it was intended. Rather, dollars that could be deployed to help sick children, help veterans in need, or help victims of natural disasters get back on their feet, are instead diverted to overhead.

And that’s of course before the charities themselves use some of those monies to support their own administrative activities – in general, about 25-35% of donations go to overhead to support the administrative functions of a charity. As a result, if you are a federal employee who donates via the CFC, only 47 cents of every dollar you donate makes it to the intended beneficiary.

As a comparison, most donor advised funds (DAFs), which do the same work the CFC does (vet charities and enable donors to direct their donations to the desired charities), charge about 0.5-1% in fees. Similarly, donors can send checks or use electronic bank transfers to fund their favorite charity with even lower costs than DAFs. All very different from the roughly 33% fees CFC donors are charged.

The CFC made a lot of sense in 1961 and 1982 – pre-internet – when donors lacked more automated and efficient ways to direct dollars to their favorite charities. And, that was reflected in the participation rates, which were orders of magnitude higher than they are in today’s internet-based world where donors have multiple efficient venues by which to donate.

Despite all of this, we at OPM will shortly launch the 2025 CFC, only because many charities have already spent time and money preparing for this over the course of this year. We hope 2025 will be a successful campaign.

But, at the same time, OPM is concerned about excessive administrative costs associated with the CFC, along with steadily declining participation, and it is evaluating changes to the CFC for 2026 (including whether to continue the program).

We believe strongly in charities and in the generosity that Americans continue to show in donating in support of charities – roughly 50% of American households donate. But we also believe donors expect their dollars to benefit the very causes they intend to support and not to lose the effectiveness of their donations because of excessive administrative costs.