At the urging of a federal judge, the agency that organizes the charitable giving campaign by federal workers has backed off a decision to drop the Make-A-Wish Foundation from the program.

The foundation, which grants wishes to children with life-threatening illnesses, was notified in July that its national chapter would not be allowed to receive any money raised in this year's Combined Federal Campaign. The Office of Personnel Management said the group's national chapter was spending an unacceptably large portion of its revenue on salaries and other administrative costs -- 38 percent, compared with the agency's ceiling of 25 percent.

Being struck from the Combined Federal Campaign list is a serious blow, and several organizations in the past have fought efforts to delete them. Last year, an estimated 1.3 million federal employees and military personnel gave to the campaign, which raised about $256 million for 30,000 approved charitable organizations.

Last week, Make-A-Wish sought an injunction in U.S. District Court in Washington barring OPM from striking the charity from the campaign. At an emergency hearing Friday, Judge Emmet G. Sullivan urged the two parties to settle the case, noting "all the good work" that Make-A-Wish does.

Under the deal they have reached, OPM will list Make-A-Wish's national chapter as an approved charity but will note that the chapter spent 38 percent of its funds on administrative expenses, information that is not typically provided in the campaign brochures. The details of the agreement were in court papers released yesterday.

Make-A-Wish Foundation chief executive David Williams said the charity suffered in the last three years from less-than-robust fundraising after the Sept. 11, 2001, terrorist attacks. He said the charity's leaders decided it was time to invest in tools to build its ability to raise funds online and through direct mail. He said that although OPM focused on the high percentage of administrative spending in 2003, more recent numbers show that the figure dropped to 24 percent in 2004.

"The investments were absolutely the right decisions to make for the long term," Williams said in an interview yesterday. "But in the short term, you get a skewed picture. As a donor, I'm more interested in what is the trend of this organization."

OPM attorney Laurie Weinstein told the judge, however, that Make-A-Wish's administrative expenses had risen for each of the past three years, from 26 percent to 30 percent to 38 percent.

"You can see the trend," Weinstein said. "It's just going up, up, up."

Make-A-Wish, founded in 1980, has participated in the campaign since 1987, receiving between $1.2 million and $2 million in each of the past 13 years.

This year's dispute began in May, when OPM notified the 65-employee national chapter of its decision. The ruling did not affect the organization's 74 local chapters.

Make-A-Wish appealed the decision, arguing that it had higher expenses and lower revenue for a short period that was coming to an end. OPM denied the appeal July 15, prompting the charity to go to court.

Some Combined Federal Campaign offices across the country have begun printing the brochures listing approved charities. Weinstein said OPM now will have to pay thousands of dollars to print errata sheets to be included in those brochures, advising federal employees that they can donate to Make-A-Wish's national chapter after all.

Chief executive David Williams says Make-A-Wish has recently cut costs.