What Is Joint Fundraising
Joint fundraising is fundraising conducted jointly by a political committee and one or more other political committees or unregistered organizations.
Who Must Observe Joint Fundraising Rules
The rules described in this appendix apply to political committees and unregistered organizations engaged in joint fundraising. The participants in joint fundraising activity may include party committees, party organizations not registered as political committees, federal and nonfederal candidate committees, nonparty political committees (e.g., federal PACs) and unregistered nonparty organizations (e.g., nonfederal PACs). 102.17(a)(1)(i) and (a)(2).
Overview of Rules
All participants in a joint fundraising effort, including unregistered organizations, must:
• Create or select a political committee to act as the fundraising representative;
• Agree to a formula for allocating proceeds and expenses;
• Sign a written agreement naming the fundraising representative and stating the allocation formula;
• Establish a separate account for joint fundraising receipts and disbursements;
• Notify the public of the allocation formula and certain other information (detailed below) when soliciting contributions;
• Screen contributions to make sure they comply with the limits and prohibitions of the Federal Election Campaign Act; and
• Report allocated proceeds and expenses (applies to political committees only).
The committee named as the fundraising representative has additional responsibilities, as explained below.
Participation in a joint fundraiser does not exempt any participants from any restrictions on their ability to raise funds outside the limits and prohibitions of federal law. 102.17(a).
Soft Money Ban
National party committees may not participate in any joint fundraiser where nonfederal or Levin funds are raised.
Federal Candidate Fundraising
Federal candidates and national party committees may not raise funds outside the limits and prohibitions of federal law. This ban limits their ability to participate in joint fundraisers with organizations that can raise nonfederal funds. 300.10, 300.61 and 300.62.
State and local party committees may not raise Levin funds through joint fundraising activity with any other state or local party committee. This prohibition applies to committees in different states as well. However, state and local party committees may jointly raise funds which are not used for federal election activity. 300.31(f).
Joint fundraising participants must either establish a new political committee (using a Statement of Organization, FEC Form 1) or select a participating political committee to act as the fundraising representative. This committee is responsible for: collecting and depositing joint fundraising contributions; paying expenses; allocating proceeds and expenses to each participant; keeping records; and reporting overall joint fundraising activity. Any federal candidate participating in the fundraiser must designate the fundraising representative as an authorized candidate committee (using a Statement of Candidacy, FEC Form 2). 102.17(a)(1)(i), (b)(1) and (b)(2).
If a new committee is established, it collects all the contributions. 102.17(b)(1). Note that a new committee may not itself be a participant in any other joint fundraising effort, though it may conduct more than one event or activity on behalf of the participants. 102.17(a)(1)(i).
If a participating committee acts as a fundraising representative, the other participants may also collect contributions, but they must forward them to the fundraising representative as required under 102.8 of FEC regulations. 102.17(b)(2).
Although participants may hire a commercial fundraising firm or other type of agent to assist the joint fundraiser, they are still required to establish or select a fundraising representative. 102.17(a)(1)(ii).
Before conducting a joint fundraiser, all participants must enter into a written agreement that identifies the fundraising representative and states the allocation formula—the percentages or amounts used to allocate joint fundraising proceeds and expenses among participants. The fundraising representative must retain a copy of the written agreement for three years and make it available to the FEC upon request. 102.17(c)(1).
Establishing the Account
Joint fundraising participants must establish a separate account for the receipt and disbursement of all joint fundraising proceeds. Each participating political committee must amend its Statement of Organization (FEC Form 1) to show the account as an additional depository. 102.17(c)(3)(i).
The fundraising representative must deposit contributions into the account within 10 days after receiving them. Only contributions permissible under the Federal Election Campaign Act (the Act) may be deposited in the joint fundraising account. If any participant is an unregistered organization which may, under State law, accept prohibited contributions, the participants may either establish a second account for such contributions or forward them directly to the participants that may accept them. 102.17(c)(3)(i) and (ii).
Joint Fundraising Representatives
If the joint fundraising committee is a new committee, it must file a Statement of Organization (FEC Form 1). If, on the other hand, the representative is an existing committee, it must amend its Statement of Organization. In either instance, the Statement of Organization must:
• Identify the committee as the joint fundraising representative (check box 5(f));
• List the names
and addresses of all federal committees participating in the joint fundraising
• Name the depository institution being used by the joint fundraising committee. In the case of a representative which is an existing committee, the depository is named only if it is different from the depository named on the committee’s current Statement of Organization.
Other Joint Fundraising Participants
Committees (other than the joint fundraising representative) that are participating in the joint fundraising effort must amend their Statements of Organization (FEC Form 1). On the form the committees must:
• Provide the name and address of the Joint Fundraising Representative and identify it as the “JFR”; and
• State the name and address of the depository institution holding the joint fundraising account, if it is different from the depository named on their current Statements of Organization.
Participants may advance funds to the fundraising representative for start-up costs of the fundraiser. The amount advanced by a participant should be in proportion to the agreed upon allocation formula. Any amount advanced in excess of a participant’s proportionate share is considered a contribution and must not exceed the amount the participant may contribute to the other participants. 102.17(b)(3)(i) and (ii). (However, an exception is made for party committees; see Section 13.)
Committees A, B and C determine they need $2,000 in start-up costs. According to their allocation formula (Committees A and B, 25 percent each; Committee C, 50 percent), Committees A and B each advance $500 to the fundraising representative, and Committee C, $1,000. If, however, Committee C advances the entire $2,000, it has made a $500 contribution to each of the other committees.
An unregistered organization must use funds that are permissible under the Act when advancing money for start-up costs. 102.17(c)(3)(i). If an unregistered participant advances more than its share of start-up costs and thus makes a contribution, the contributed amount may trigger registration and reporting requirements under the Act. 100.5(a)–(d).
In addition to any notice required under “Disclaimer Notices on Communications” and “Solicitation Notices," participants must include a joint fundraising notice with every solicitation for contributions. The notice must contain the following information:
• The names of all participants, regardless of whether they are registered political committees or unregistered organizations;
• The allocation formula;
• A statement informing contributors that they may designate contributions for a particular participant; and
• A statement that the allocation formula may change if any contributor makes a contribution that exceeds the amount he or she may lawfully give to any participant. 102.17(c)(2)(i).
In two situations, participants must include additional information in the joint fundraising notice:
• If a participant is engaging in the joint fundraiser to pay off outstanding debts, the notice must state that the allocation formula may change if the participant receives enough funds to pay its debts.
• If, under State law, any unregistered participant is permitted to receive contributions prohibited under the Act, the notice must say that such contributions will be given only to participants that may legally accept them. 102.17(c)(2)(ii).
The fundraising representative and participants must screen all contributions to make sure they are neither prohibited by the Act nor in excess of the Act’s contribution limits. (Any prohibited contributions must be allocated to any unregistered participants in compliance with applicable state law.) The maximum amount a contributor may give to a joint fundraiser is the total amount he or she may contribute to all participants without exceeding any limits.
To facilitate screening, participants must provide the fundraising representative with records of past contributions so that the representative can determine whether a donor has exceeded the contribution limits. 102.17(c)(4)(i) and (c)(5).
With regard to gross proceeds, the fundraising representative must collect the following contributor information and later forward it to the participating political committees:
• For contributions exceeding $50: the amount, date of receipt and the contributor’s name and address.
• For contributions exceeding $200: the amount, date of receipt and the contributor’s name, address, occupation and employer. 102.8(a) and (b); 102.17(c)(4)(ii).
The date of receipt is the date the fundraising representative receives the contribution. 102.17(c)(3)(iii).
The fundraising representative must also keep a record of the total amount of prohibited contributions received, if any, and of any transfers containing prohibited funds made to participants that may accept them. 102.17(c)(4)(ii).
The fundraising representative must retain, for three years, records on all disbursements made for the joint fundraiser. The required recordkeeping information is described here. If a commercial fundraising firm or agent is used, it must forward required records on disbursements to the fundraising representative. 102.17(c)(4)(iii).
The fundraising representative may make payments for fundraising expenses from gross proceeds collected at the fundraiser (and from funds advanced by the participants). 102.17(c)(7)(iii). Nevertheless, it must allocate (but not transfer) gross proceeds among the participants.
Generally, the fundraising representative must allocate gross proceeds according to the allocation formula. However, the formula may change if the allocation results in:
• An excessive contribution from a contributor to one of the participating committees; or
• A surplus for a participant raising money solely to pay off campaign debts.
Reallocation under these circumstances must be based on the other participants’ proportionate shares under the allocation formula. If reallocation results in a contributor’s exceeding contribution limits for the remaining participants, the fundraising representative must return the excess amount to the contributor. 102.17(c)(6)(i).
Using the same example mentioned above (allocation formula: Committees A and B, 25 percent each; Committee C, 50 percent), the participants receive a $2,000 contribution from a donor who had previously contributed up to his limit to Committee C. If the fundraising representative were to divide the contribution according to the allocation formula, Committee C would receive an excessive contribution of $1,000. Instead, the excess $1,000 is divided equally between Committees A and B, since their proportionate shares under the allocation formula are equal. Each receives an extra $500, bringing their total allocation to $1,000 apiece.
If, however, Committee A can accept only $800 from the contributor without exceeding the limit, the excess $200 is allocated to Committee B. If Committee B cannot accept the money for the same reason, the $200 must be returned to the contributor.
Designated or earmarked contributions which exceed the contributor’s limit for a participant may not be reallocated without the written consent of the contributor. 102.17(c)(6)(ii).
Prohibited contributions must be distributed only to the unregistered participants that may lawfully accept them; they do not have to be distributed according to the allocation formula. 102.17(c)(6)(iii).
After gross proceeds are allocated, the joint fundraising representative must calculate each participant’s share of expenses based on its actual share of gross proceeds. (Prohibited contributions may be excluded from the gross proceeds when making this calculation.) 102.17(c)(7)(i)(A). (An exception is made for party committees; see below.) The final allocation formula may differ from the original formula if receipts had to be reallocated—see example below.
Expenses for a series of fundraising events must be allocated on a per-event basis. 102.17(c)(7)(i)(C).
At the start of the fundraiser, Committees A, B and C agree to allocate 25 percent of proceeds and expenses to Committee A, 25 percent to Committee B and 50 percent to Committee C. However, because the fundraising representative must reallocate some contributions, Committee A is actually allocated 20 percent of gross proceeds; Committee B, 35 percent; and Committee C, 45 percent. The fundraising representative must allocate the joint fundraising expenses, $10,000, on the same basis: $2,000 to Committee A, $3,500 to Committee B and $4,500 to Committee C.
If a participant pays for more than its allocated share of expenses, the excess payment is considered a contribution, subject to the Act’s limits (see “Start-Up Costs” earlier in this appendix). 102.17(c)(7)(i)(B). (Party committees are excepted from this rule; as explained earlier.)
Remember, if an unregistered participant makes such a contribution, the payment may trigger registration and reporting requirements for that organization. 100.5(a)–(d).
The fundraising representative may delay transferring net proceeds to participants until after it receives all contributions and pays all expenses for the fundraiser. To determine net proceeds, the fundraising representative subtracts the participant’s share of expenses from its share of gross proceeds. 102.17(c)(3)(ii) and (c)(7)(i)(A).
For example, Committees A, B and C raise $50,000 in gross proceeds and spend $10,000 in expenses, leaving $40,000 in net proceeds. The fundraising representative allocates $10,000 (20 percent) in gross proceeds to Committee A and $2,000 (20 percent) in expenses; Committee A’s net proceeds equal $8,000.
The fundraising representative reports all joint fundraising proceeds in the reporting period in which they are received. If any prohibited contributions are received for an unregistered organization, the fundraising representative must report them as memo entries. Each Schedule A used to itemize contributions must clearly indicate that the receipts are joint fundraising proceeds. 102.17(c)(3)(iii) and (c)(8)(i)(A).
The fundraising representative must also report all disbursements made for the joint fundraiser in the reporting period in which they are made. 102.17(c)(8)(ii).
After the fundraising representative distributes the net proceeds, each participating political committee reports its share as a transfer-in from the fundraising representative. Using the records received from the fundraising representative, a participating committee itemizes its share of gross receipts as contributions from the original donors (to the extent required by the rules on itemization—see here) on memo entry Schedules A . When itemizing gross contributions, the participant must report the date of receipt as the day the fundraising representative received the contribution. 102.17(c)(3)(iii); (c)(8)(i)(B).
Note that, if the fundraising representative is one of the participating committees (rather than a committee established solely for the joint fundraiser), it must report its own share of gross receipts in addition to reporting total fundraising proceeds.
Payments made by a party committee (that is, a political committee) on behalf of another party committee are considered transfers of funds rather than contributions. Because there is no limit on transfers between party committees of the same political party, a party committee may pay any amount of another party committee’s allocated start-up costs and fundraising expenses. Moreover, if all the participants in the fundraiser are party committees, start-up costs and fundraising expenses need not be allocated at all. 102.6(a)(1)(ii); 102.17(b)(3)(iii) and (c)(7)(ii).
The same exception also applies to party organizations (that is, unregistered party groups). They must use funds permissible under the Act when making payments for start-up costs and fundraising expenses. Furthermore, such payments by a party organization on behalf of a registered party committee count against the $1,000 contribution/expenditure threshold for registration as a political committee. (See Chapter 1.) 100.5(a) and (b); 102.6(a)(1)(iv) and (a)(2); 102.17(c)(7)(ii).
 The joint fundraising rules do not, however, apply to fundraising by collecting agents and separate segregated funds. (A collecting agent is an organization that solicits and collects contributions for a separate segregated fund.) 102.17(a)(3). See 102.6(b).