1. NMCRS FUNDRAISING ETHICS CDR J. A. Link, JAGC, USN

2. References SECNAVINST 5340.7 (8 Feb 99 – still current) 5 CFR 2635 5 CFR 950 DoD 5500.7-R (Joint Ethics Regulations) Executive Orders 12353, 12404 DoDI 5035.01, 5035.05 SOCO Advisory 10-06 CNIC 11000.1 18 U.S.C. § 201

3. Fundraising Issues There is no comprehensive fundraising regulation. Instead, there are multiple independent, overlapping, and unrelated regulations! Issues to evaluate with fundraising questions are: – Who is the solicitation for? Charitable organization? – Who is being solicited? Military only? Government civilians? Others? – What is being solicited? Money? Goods? – What type of NFE is involved? By our own, for our own (boofoo)? Other non-federal entity (NFE)? – What support is being requested? Endorsement? Personnel? Equipment? – Where is the solicitation going to occur? Federal workplace? Outside the workplace, but on the installation? Off installation? – When is the fundraising taking place? Limitations on fundraising during CFC campaign season and CFC participants not allowed to fundraise outside CFC season.

4. Fundraising Rules Overview Official CapacityPersonal Capacity In the Federal Workplace Official endorsement and limited government resources/appropriated funds: CFC Emergencies and disasters approved by OPM and SECNAV Executive Orders 12353, 12404 5 CFR 950 5 CFR 2635.808 DoDI 5035.01, 5035.05 SOCO Advisory 10-06 Official endorsement: Boofoos (including NMCRS) Executive Order 12353 JER 3-210 NOT PERMISSIBLE Outside the Federal Workplace Logistical Support (Personnel) No “active and visible participation” in promotion, production or presentation of the event May give speech in official capacity on subject related to official duties 5 CFR 2635.808 Limited Logistical Support (Not Personnel) 6-part test must be met NFE not affiliated with CFC JER 3-211(b) CNIC 11000.1 Yes, provided: Acts exclusively outside the scope of official position No implication of DoD endorsement May use military grade and department BUT NOT title, position, or authority associated with the office May not solicit subordinates or prohibited sources 5 CFR 2635.808 JER 3-300

5. Definitions Fundraising: (5 CFR 2635.808(a)(1)) the raising of funds for a nonprofit organization, other than a political organization as defined in 26 U.S.C. 527(e), through: – Solicitation of funds, – Sale of items, or – 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. Solicitation: (5 CFR 950.101) any action requesting money, either by cash, check or payroll deduction, on behalf of charitable organizations. Participation: (5 CFR 2635.808(a)(2)) active and visible participation in the promotion, production, or presentation of the event and includes serving as honorary chairperson, sitting at a head table during the event, and standing in a reception line. The term does not include: – mere attendance at an event provided that, to the employee’s knowledge, his attendance is not used by the non-profit organization to promote the event. – Delivery of an official speech or any seating or other participation appropriate to the delivery of such a speech.

6. General Principles The CFC is the only authorized solicitation of Government personnel in the Federal workplace on behalf of charitable organizations. (5 CFR 950.102(a)). – Federal workplace: Installation COs have the authority to determine which areas of the base are considered “outside the workplace” for fundraising purposes (CNIC INST 11000.1). Exceptions (5 CFR 950.102): – Collection of gifts-in-kind (food, clothing, toys, etc.) – Emergencies and disasters approved by OPM (and SECNAV) – By our own, for our own (NMCRS) An employee may engage in fundraising as part of his official duties only when authorized by law or regulation (5 CFR 2635.808, JER 3- 210).

7. BOOFOO Fundraising Executive Order 12353 exempts “by our own, for our own” entities from the fundraising regulations JER 3-210a(6) permits command endorsement of BOOFOO fundraising – Those solicited must also be eligible to receive proceeds – “By our own” usually means active duty and family in the command or on the installation No outside solicitations Be careful of website sales – “For our own” usually means active duty and family in the command Not the charity of the organization’s choice NMCRS qualifies as a BOOFOO (also qualifies under JER 3-210a(4)). Authorized endorsement does NOT mean authorized use of government resources – Must undergo a JER 3-211 analysis if BOOFOO wants to use government resources

8. Navy-Marine Corps Relief Society One and only DON-related military relief agency approved for – Workplace fundraising – Official endorsement Exception based on NMCRS’s history as a BOOFOO organization – Civilian employees are outside the BOOFOO Commanders, COs, and other active duty should not participate in day to day management of local NMCRS chapter No command endorsement allowed for events soliciting outside active duty and retired Navy and Marine Corps personnel – Navy-Marine Corps Relief Society Ball – NFE events donating proceeds to NMCRS Sporting events donating a percentage of the $ Prohibited source events benefiting NMCRS SECNAVINST 5340.7

9. Coercion Charitable contributions should be truly voluntary. The following are some examples of specifically prohibited activities: – Supervisory inquiries about whether an employee chose to participate or the amount of an employee's donation; – Setting 100% participation goals; – Establishing personal $ goals and quotas; – Developing and using lists of non-contributors; – Providing and using contributor lists for purposes other than the routine collection and forwarding of contributions and allotments; and – Using the results as a factor in a supervisor's performance appraisal.

10. Civilian Clothes Privilege Not an advisable fundraising tactic. See 18 U.S.C. § 201 (criminal bribery): “Whoever... being a public official or person selected to be a public official, directly or indirectly corruptly demands, seeks, receives, accepts, or agrees to receive or accept anything of value personally or for any other person or entity, in return for... being influenced in the performance of any official act... shall be fined... or imprisoned for not more than fifteen years, or both, and may be disqualified from holding any office of honor, trust, or profit under the United States.”

11. Selling Liberty Same analysis as Civilian Clothes. (criminal bribery) Separate additional guidance for special liberty under MILPERSMAN 1050-280. Bottom line: No official action should be taken or discretionary decision made based on a financial contribution to a charity.

12. Raffles, Lotteries, and Gambling 5 CFR 735.201 and JER 2-302 prohibit gambling on government property. Raffles and lotteries are permitted when they do not constitute gambling. Permissible raffles and lotteries eliminate an element of gambling. – Give away raffle and lottery tickets, and do not sell additional chances Tickets to a party with door prizes – Replace a game of chance with a game of skill Only two SECNAV-approved exceptions (so long as permissible under local law): NMCRS & MWR. March Madness pools and fantasy sports for prizes in the office constitute gambling.

13. More Gambling Limitations Check local/state law on gambling. Before holding an event, the commander/commanding officer must determine that the fund-raising activity will be consonant with local law, even when the command is located in an area of exclusive federal jurisdiction. – JBAB, WNY, NSAB – all exclusive federal jurisdiction. – Some states which otherwise prohibit gambling have an exception for charitable organizations. No casino-type games of chance. SECNAVINST 5340.7 specifically does not extend authorization to casino-type games of chance (i.e., roulette and card games). Regardless of local law.

14. Raffle Prizes Government property, including the use of such property, cannot be used as a prize for the raffle. – Rides on the CO's gig or use of the XO's parking space are examples of improper use or disposition of Government property. Permitted official endorsement of NMCRS fundraising does not equate to a finding that any action in support of the fundraising is for an “Official Purpose." – The limitations of JER 2-301b, regarding the use of Federal Government resources, apply. Authorization for a raffle does not vitiate the rule against solicitation of gifts. – Personnel may not solicit businesses for donations to use as prizes for the raffle. – Gift certificates and merchandise may be purchased from part of the proceeds of the raffle tickets.

15. Financial Controls SECNAVINST 5340.7 requires the commander/commanding officer to institute proper administrative controls when authorizing a raffle, including an audit. Will need someone not involved in the fundraising campaign to conduct the audit.

16. Questions?