The Role of Charitable Federations
Federations like Caring Connection and federation partnerships like Partnership for Colorado are essential structures for organizing, promoting and practicing workplace philanthropy. Employers, employees and nonprofit organizations depend on federations to:
- Ensure fundraising efficiency
- Offer meaningful and manageable choice in payroll giving
- Heighten accountability by performing due diligence on member charities
- Provide professional campaign management services and support
- Promote nonprofit collaboration and capacity building
What is a federation?
Federations are groups of nonprofit organizations united for fundraising and/or marketing purposes around a common area of societal focus or concern such as human and social welfare, the environment, medical research and international relief. Many federations have a geographic component which brings together members based on their international, national, state, metropolitan or regional boundaries.
The federated model of giving, popularized in America over decades of charitable solicitation through the workplace, has allowed millions of people to become philanthropists through payroll deduction, donating to a wide variety of charities. Federations enable individuals to support an entire community of organizations that are aligned with their personal charitable interests and values.
Federations manage and support campaigns and serve as a liaison between donors, their employers and groups of organizations. The nature of payroll deduction giving allows more donated money to flow to charitable causes by providing donors an easy way to maximize their giving through small increments over time, thus generating predictable income for recipient charities over the course of a year.
A nonprofit organization often views the staff of its federation as an extension of its own development and finance capacity. By outsourcing this fundraising component and joining together with other organizations, members of federations achieve economies of scale in their fundraising efforts.
Benefits to the employer:
- Federations help employers develop integrated giving at work campaigns that are efficient, cost effective and diverse, reflecting the interests of their workforce.
- Federations enable employers to offer a diversity of giving choices with ease.
- Federations are efficient for the employer, offering a single point of contact and minimizing the number of financial transactions required to distribute employee contributions.
- Federations make campaigns more effective through trained, experienced staff; best practices policies; training for campaign volunteers; and links to volunteer opportunities.
- Federations maintain current records and verify the nonprofit status and standards of each member charity before releasing funds, eliminating the need for the employer to consume valuable time in doing so.
- Federations complete extensive due diligence annually to ensure organizations are accountable and held to the highest standards of performance and financial integrity.
- Federations ensure that all member organizations are in compliance with a variety of industry standards, such as the Office of Personnel Management’s Combined Federal Campaign, the Colorado Combined Campaign and the Denver Employees’ Combined Campaign eligibility criteria.
Benefits to the donor:
- Federations allow donors easy access to a variety of charitable giving options.
- Federations offer an efficient and convenient way to identify nonprofit organizations for the donor, grouping charities by program services and allowing donors to elect to support those that most appeal to their personal values.
- Federations offer the opportunity for donors to give anonymously and, conversely, ensure that donors who wish to be acknowledged will be thanked.
- Federations link donors to volunteer opportunities of their member organizations.
Benefits to nonprofit organizations:
- Federations provide the opportunity for member organizations to reach many more potential donors (employees) than they could on their own.
- Federations allow member organizations to focus more resources and time on their core programs.
- Federations provide marketing, fundraising, donor report and funds distribution services few charities have the capacity to perform on their own.
- Member organizations are assured that they receive complete and accurate information on all donations and donors that give through the federation.
- Many federations provide educational, capacity building, technological services and other services to their member organizations, increasing the value of their membership.
When federations bring choice to giving at work campaigns, the donor is provided with an array of prominent, deserving charities from which to choose; the employer is provided a low-maintenance campaign format to administer; and the charities are provided new sources of support for their vital missions.