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FUNDRAISING
2015
Office of the Staff Judge Advocate to the
Commandant of the Marine Corps
October 2015
Overview
• References
• Principles
• Official
• Personal
• Other Concerns
• Specific Examples
• Problems
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References
• The Constitution
• Executive Orders
• Standards of Ethical Conduct for
Employees of the Executive Branch
• Joint Ethics Regulation
• Agency Regulations
• Policy Guidance
• Internet Resources
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What Ethical Principles
Should You Consider?
Ethics Principles
Public service is a
public trust, requiring
employees to place
loyalty to the
Constitution, the laws
and ethical principles
above private gain.
Is it a tilting scale?
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Ethics Principles
• Public Trust (#1, #7)
• Misuse of Resources (#9)
• Misuse of Position (#7)
• Preferential Treatment (#8)
• Conflicts of Financial Interest (#2)
• Effective Workforce (See EO 12353)
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Why is Fundraising Difficult?
The 5Ws and an H
• WHO – is fundraising?
• WHAT – is the legal authority?
– is being solicited?
• WHEN – is solicitation?
• WHERE – is the fundraising?
• WHY – is soliciting?
• HOW – How are we supporting?
– People
– Equipment
– Time
– Endorsements
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Pieces of the Puzzle
• Money or goods
• In or outside the Federal workplace
• US or someone else
• Official or personal
• Any logistical support
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Complicated and
Often Appears Contradictory
No comprehensive guidance
– Executive Orders
– Government-wide regulations
– Agency regulations
– Site Regulations
– Policy
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WHAT is Fundraising?
• 5 C.F.R. § 2635.808(a)(1)
• Definitions. For purposes of this section:
Fundraising means the raising of funds for a
nonprofit organization, other than a political
organization as defined in 26 U.S.C. 527(e),
through:
– (i) Solicitation of funds or sale of items; Or
– (ii) Participation in the conduct of an event by an
employee where any portion of the cost of attendance
or participation may be taken as a charitable tax
deduction by a person incurring that cost
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WHAT is Fundraising?
• Fund-raising Event. An event or activity with
the purpose of soliciting money or materiel for
charitable, civic, or educational organizations,
organizational operations, or similar purposes,
by any means, beyond that necessary to cover
the reasonable costs of the event (DoDI
5410.19, paragraph E2.1.26.)
• NOT “Commercial Activities” that involve
conduct of business to make a PROFIT.
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• All persons entering in or on Federal property are
prohibited from soliciting alms (including money and
non-monetary items) or commercial or political
donations, vending merchandise of all kinds, displaying
or distributing commercial advertising, or collecting
private debts, except for— . . . (41 C.F.R. § 102-74.410)
But, see 5 C.F.R. § 950.102(b) does not apply to the
collection of gifts-in-kind, such as food, clothing,
and toys, or to solicitation of Federal employees
outside of the Federal workplace as defined by
the Agency Head consistent with GSA regulations
But, see Service Regulations which allow for
placement of collection boxes in public use areas
of Federal buildings or installations for the voluntary
donation of foods or goods for charitable causes.
What is Fundraising?
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Official Capacity
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Official Capacity
Fundraising in an “official capacity" requires
authorization pursuant to statute, Executive
Order, regulation, or other authority making
such activity part of an employee's official
duties. See 5 C.F.R. § 2635.808(b).
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Statutory
NDAA for FY2008, Pub. L. 110-181, § 593(b),
Jan. 28, 2008,
GIFT ACCEPTANCE AUTHORITY. Amendments to
10 U.S.C. § 2601
LIMITATION ON SOLICITATION OF GIFTS.—”The Secretary of
Defense shall prescribe regulations implementing [10
U.S.C. § 2601 and 2608], that prohibit the solicitation of
any gift under such sections by any employee of the
Department of Defense if the nature or circumstances of
such solicitation would compromise the integrity or the
appearance of integrity of any program of the Department
of Defense or of any individual involved in such program.”
Financial Management Regulation, Vol. 12, Chap. 30
“[P]ersonnel shall not solicit, fundraise for, or otherwise
request or encourage the offer of a gift.”
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Regulatory
• Executive Orders 12353 and 12404,
Charitable Fund-Raising
• 5 C.F.R. Part 950, Solicitation of Federal Civilian
& Uniformed Service Personnel for Contributions
to Private Voluntary Organizations
• 5 C.F.R. Part 2635, Standards of Ethical Conduct
for Employees of the Executive Branch
• DoD 5500.07-R, Joint Ethics Regulation
• Service Regulations
• GSA Regulations
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WHO
• United States (US)
• Non-Federal Entities
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Where?
• In the Federal
workplace
• Outside the
Federal workplace
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Official Support
In the Workplace
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History of Charitable Fundraising
Within the Federal Service
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Early Years
“An uncontrolled free-for-all”
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1940s and 1950s
Charitable solicitation in Federal
workplace was on an ad hoc basis.
Federal managers received requests from dozens
of organizations seeking endorsements and the
right to solicit employees at their worksites.
Quotas (for agencies & individuals) were established
and supervisors pressured employees.
Fundraising frequently consisted of passing an
empty coffee can from employee to employee.
Even so, total receipts were minor.
Often, employees donated their pocket change.
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Executive Order 10728
President’s Committee on Fundraising
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Executive Order 10927
Combined Federal Campaign
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Executive Orders
12353 and 12404
Charitable Fund-Raising
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Official Support in the Workplace
Executive Orders 12353/12404
Authorizes the Combined Federal Campaign
Retained original limitation to “national voluntary
health and welfare agencies and such other
national voluntary agencies as may be appropriate”
Specifically excluded those “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”
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U.S. Supreme Court Litigation
Charitable Fund-Raising and Free Speech
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Cornelius v. NAACP Legal Defense
& Educational Fund, Inc. (1985)
Legal defense funds brought suit alleging that
Executive Order unconstitutionally excluded
them from participation in charity drive aimed
at federal employees and military personnel
Key Points:
Charitable solicitation of funds has been
recognized as Free Speech
Federal workplace as “nonpublic forum”
CFC defined as “nonpublic forum”
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Cornelius v. NAACP Legal Defense
& Educational Fund, Inc. (1985)
Control over access to “nonpublic forum” may
be based on subject matter and speaker identity
as long as distinctions drawn are “reasonable.”
Held: Federal Government did not violate
First Amendment when it limits participation in
charity drive aimed at federal employees, which
is nonpublic forum, in order to minimize
disruption of the federal workplace, to ensure
the success of the fundraising effort or to avoid
the appearance of political favoritism without
regard to viewpoint of the excluded groups.
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Official Support in the Workplace
Executive Orders 12353/12404
Does not apply to “solicitations conducted BY
organizations composed of civilian employees
or members of the uniformed services AMONG
their own members for organizational support
or FOR the benefit of welfare funds for their
members.”
Dates back to 1957 -- see § 7 of EO 10728
(1957); § 3 of EO 10927 (1961); § 7 of EO
12353 (1982)
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Effective Workforce
Combined Federal Campaign
(CFC)
• Objectives -- E.O. No. 12404 (Feb. 10, 1983):
–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.
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Combined Federal Campaign
• Permissible:
–Duty hours
–Use of official title position and authority
–Endorsement of CFC (not individual charities)
–Limited appropriated fund support
• Campaign kick-off events
• Victory events
• Award ceremonies
• Non-solicitation events to build support
• Limited use of appropriated funds
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Combined Federal Campaign
• Impermissible activities:
–Cannot receive something of
value in exchange for contribution
–Cannot endorse a specific charity
–May not solicit outside of the Government
–Coercive
• Solicitation by chain of command
• Establishing personal $ goals
• Lists of non-contributors
• Improper use of contributor lists
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• OPM Issues Final Rule to Amend CFC Regs – 79 Fed. Reg.
21,581 (Apr. 17, 2014) Effective date 1 Jan 2016
– Designed in response to recommendations of
CFC-50 Commission (issued July 2012)
– Solicitation Period – OPM Director may set
campaign period from September 1
st
to January 15
th
– Immediate eligibility to allow new employees to pledge
– Disaster Relief Program – OPM Director authorized to create
program to be available to donors within hours after disaster
– Electronic Giving and Processing – Cash contributions are
eliminated; checks can be accepted and processed electronically
– Improvements in CFC infrastructure, standards of accountability,
and transparency
Combined Federal Campaign
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Combined Federal Campaign
Special CFC Fundraising Events
• Raffles, lotteries, auctions, bake sales, carnivals, athletic
events or other activities if:
– Approved by appropriate agency head or government official
– Consistent with agency ethics regulations
– In the spirit of generating interest in CFC – open to all individuals
without regard to whether employee participates in CFC
– Chance to win must be disassociated from amount of contribution
– Raffle prizes should be modest in nature and value
– Examples of appropriate raffle prizes may include opportunities
for lunch with Agency Officials, agency parking spaces for specific
time period, and gifts of minimal financial value
– Any special CFC fundraising event and prize or gift should be
approved in advance by Agency’s ethics official.
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Combined Federal Campaign
Recurring Questions
• Can we hold fundraising event for specific charity?
– No, funds raised must go to either CFC General Fund
or whatever charity the donor identifies
• Can we have a “civilian clothes day” whereby
employees may make a donation for the privilege of
wearing of civilian clothes to work?
– No, military service uniform regulations cannot be
suspended or changed in exchange for a CFC donation.
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A Word on Gambling
General Rule: Gambling is prohibited on Government-owned
or leased property and/or while on official duty
• OPM at 5 C.F.R. § 735.201 prohibits civilian employees from
gambling unless necessitated by employee’s official duties or
unless an agency approved activity. (Be aware of local and
state law that may prohibit such activity.)
• JER 2-302 prohibits DoD personnel from gambling -- several
exceptions exist for “by our own, for our own” when approved
by head of DoD Component after consultation with DAEO and
subject to the limitations of local law or regulations
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Gambling Defined
1. Consideration (betting something of value)
2. A game of chance, and
3. An offering of a reward or prize
See U.S. v. DiCristina, 886 F.Supp.2d 164 (EDNY
2012), reversed, 726 F.3d 92 (2d Cir. 2013), cert.
denied, 134 S.Ct. 1281 (2014)
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Fantasy Football is Gambling
• DoD employee operating “fantasy football league” in his
workplace
– Participants each paid $20 to participate
– Funds used for luncheon at end of season and
trophies purchased for the winners.
– General Counsel ruled as gambling in the workplace
• Air National Guard running “fantasy football“
league on Government computers
– Each league member contributed $10 to play
– Winner to buy pizza for all participants at end of season
– Game conducted on break and lunch times
– JER prohibits gambling while on duty or while on Federal property
– Misuse of government resources to conduct such activity on
Government computers.
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Special Solicitations During
Emergencies and Disasters
• Exception to CFC Regulation: Organizations cannot
conduct other charitable fundraising in the Federal
workplace unless Director OPM grants permission for
special solicitations of Federal employees in support of
victims in cases of emergencies and disaster
– Hurricane Sandy – Special Solicitation Authorized
– Japan Earthquake & Tsunami
– Special Solicitation Authorized
– Haiti Earthquake
– Special Solicitation Authorized
• Inapplicable to the collection of gifts-in-kind
• Inapplicable to fundraising outside the workplace
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Official Support in the Workplace
• Military Relief Societies
– Army Emergency Relief
– Navy-Marine Corps Relief Society
– Air Force Assistance Fund
• “By our own, For our own”
– Family Readiness Groups
Caveat: Can support only when soliciting beneficiaries
for its funds. If soliciting among the general public or
if another non-Federal entity fundraises on its behalf,
no official support or endorsement.
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“By Our Own For Our Own”
JER 3-210.a(6)
• Recognized in Executive Orders
10728, 10927, & 12353
• “Organizations composed
primarily of DoD employees or
their dependents when fundraising
among their own members for the
benefit of welfare funds for their
own members of their dependents
when approved by the head of the
DoD Component command or
organization after consultation
with the DAEO or designee.”
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“Commander relieved after Sub Ball
fundraising includes adult businesses”
CAPT Heatherington relieved and received non-judicial punishment
because of command-sponsored, off duty event:
• Fundraising team included
active-duty sailors, civilians and contractors
• Failed to prevent his command from wrongfully
soliciting & accepting items of monetary value
from company doing business with DoD
• Wrongfully affiliated the U.S. Navy with “businesses that are not
representative” of the Navy and DoD high standards
Navy Command Investigation
of Golf Tournament Fundraiser
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Remember - Voluntary
• Cannot enter fact of participation or
nonparticipation into an individual's performance
appraisal or evaluation report.
• No lists of non-contributors.
• No granting of special favors, privileges, or
entitlements, such as special passes or leave
privileges which are an inducement to contribute.
• Cannot be an express or implied requirement to
give as a condition to the granting of normal
privileges and entitlements, violates both the letter
and spirit of this regulation.
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Official Support in the Workplace
• Military Balls
– Subject to the same rules
• Who is sponsoring the military ball?
– Do not analogize with the Army Birthday Ball or
the Commandant’s Marine Corps Birthday Ball
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Official Support Outside the Workplace
Attending A Fundraiser
• Prohibition against “actively and visibly
participating” in the promotion, production, or
presentation of the event. See 5 C.F.R. §
2635.808(a)(2). This includes:
– Requesting or encouraging the giving of donations;
– Serving as honorary chairperson;
– Sitting at the head table;
– Standing in a reception line; or
– Serving as master of ceremonies
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Official Support Outside the Workplace
Attending A Fundraiser
• “Active and visible participation”
does NOT include mere attendance at an event.
• Wear of uniform determined by individual
Service uniform regulations.
• Exception for Official Speeches.
See 5 C.F.R. § 2635.808(a)(3):
– Official speech means a speech given
by an employee in his official capacity
on a subject matter that relates to this duties
– Agency determination that the event is an
appropriate forum
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Requests for DoD Bands
Active & Visible Participation?
• A military band or choral group is NOT “logistical
support” and is not generally available to support
NFE events per DoD public affairs policy
(DoDD 5410.18, para. 4.2.4.2)
• A military band in uniform conveys “strong visual
appearance” of DoD endorsement of the NFE
• When in DoD interest, may be
provided for ceremonial
support of NFE events that are
NOT FUNDRAISERS
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Requests for DoD Color Guards
Incidental Logistical Support?
• IT DEPENDS!
• See DoD PA guidance on if it’s “incidental
logistical support,” i.e., adds minimal if
any programmatic value or improvement
to perceived quality, audience draw, or
other aspect of the event
• Key example: providing a Joint-Service
Color Guard as ceremonial opening to a
conference or annual awards banquet
• See DODI 5410.19, para. 4.2.5.1 and E2.1.59
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Personal Capacity
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Personal Capacity
• JER, § 3-300
–Purely personal, unofficial volunteer efforts
to support fundraising outside the Federal
Government workplace are not prohibited.
–Efforts cannot imply DoD endorsement.
–Did you ever think of 18 U.S.C. § 205?
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But!
No Personal Fundraising
in the Workplace
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Misuse of
Government Resources
Email
ALL,
My son's Boy Scout of America Troop is
sponsoring a drive to raise funds to support the
National Boy Scouts of America Organization.
If anybody is interested in ordering snacks to
support Boy Scouts of America. I have placed a
yellow folder with brochure/order form to place
your orders in the SMA area. I will deliver any
orders straight to this office when they come in.
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Misuse of Subordinate’s Time
DOD IG Investigation of LTG Huntoon
RULE: An employee shall not encourage, direct, coerce, or
request a subordinate to use official time to perform
activities other than those required in the performance of
official duties or authorized in accordance with law or
regulation. - 5 C.F.R. 2635.705(b)
DOD IG concluded that LTG Huntoon
• Misused his position, government
resources and personnel
• Repaid affected workers $1,815
based upon prevailing labor rates
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“Hiring Out” Marines to Work for Private
Organization During Duty Hours
• USMC CO directed subordinates to use official time
to perform manual labor and other activities in
support of PO to fundraise for USMC Ball
• Marines worked in exchange for money
and command endorsement earning
> $48,600 from outside organization
• NOT PERMITTED
– Government employees must use official
time in honest effort to perform official duties
– Marines are already being paid for work;
“hiring out” constitutes unauthorized double pay
See DoD SOCO Encyclopedia of Ethical Failure
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No No’s
• Email - No unofficial advertising,
soliciting or selling (JER 2-301)
• Subordinates - No solicitation of personnel
junior in rank or grade to purchase items
(such as tickets) in connection with an
unofficial fundraising event or effort
(JER 2-205 & 5-409)
• Contractors – No solicitation of contractors
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