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HOME / COMPLIANCE HELP / BROCHURES / TESTING THE WATERS

Testing the Waters

Published in the March 2010 Record

Before deciding to campaign for federal office, an individual may want to "test the waters"—in other words, explore the feasibility of becoming a candidate. An individual who merely test the waters, but does not campaign for office, does not have to register or report as a candidate even if the individual raises more than $5,000—the dollar threshold that would normally trigger registration. Nevertheless, funds raised to test the waters are subject to the Federal Election Campaign Act’s (the Act) contribution limitations and prohibitions. See Advisory Opinion 1998-18 [PDF].

Once an individual begins to campaign or decides to become a candidate, funds that were raised or spent to test the waters apply to the $5,000 threshold for qualifying as a candidate. 11 CFR 100.72(a) and 100.131(a). Once that threshold is exceeded, the individual must register with the FEC (candidates for the House of Representatives) or the Secretary of the Senate (candidates for the Senate), and begin to file reports.

 

Questions Answered:

 

What activities are Testing the Waters vs. Campaigning?

An individual may conduct a variety of activities to test the waters. Examples of permissible testing-the-waters activities include polling, travel and telephone calls to determine whether the individual should become a candidate. 11 CFR 100.72(a) and 100.131(a).

Certain activities, however, indicate that the individual has decided to become a candidate and is no longer testing the waters. In that case, once the individual has raised or spent more than $5,000, he or she must register as a candidate. Intent to become a candidate, for example, is apparent when individuals:

 

How do the contribution limits apply?

Contribution limits apply to all the support given to an individual who is testing the waters. The limits apply, for example, to:

For additional information on contributions, including current contribution limits, please review the FEC’s Contributions Brochure.

 

What prohibitions apply to contributions received while Testing the Waters?

An individual who is testing the waters must comply with the Act’s prohibitions. The Act specifically prohibits money from:

11 CFR 114.2(a), (b), and (d), 110.20(a)(3), 115.2.

 

Are there any recordkeeping requirements?

An individual who tests the waters must keep financial records. If the individual later becomes a candidate, the money raised and spent to test the waters must be reported by the campaign as contributions and expenditures. 11 CFR 101.3. The money raised and spent for testing the waters must be disclosed on the first report the principal campaign committee files.

 

Do I need to open a bank account?

Although this is not a requirement, an individual who tests the waters may want to consider segregating testing-the-waters funds from personal funds by setting up a separate bank account for the deposit of receipts and the payment of expenses. If the individual later becomes a candidate, a campaign account must be established to keep campaign funds separate from anyone’s personal funds. 11 CFR 102.10, 102.15, 103.2, 103.3(a).

 

How do I organize a Testing the Waters Committee?

An individual may organize a committee for testing the waters. An exploratory committee or a testing-the-waters committee is not considered a political committee under the Act and is not required to register with the FEC or to file reports. The name of the testing-the-waters committee and statements made by committee staff must not refer to the individual as a candidate. Thus, for instance, a testing-the-waters committee may be named "Sam Jones Exploratory Committee," but not "Sam Jones for Congress."

If the committee's activities go beyond the testing the waters and the committee begins to campaign, the committee must register with the FEC. The funds raised during the testing-the-waters phase automatically become contributions, and the funds spent, including polling costs, become expenditures. These contributions and expenditures count toward the threshold that triggers candidate status. Once the contributions exceed $5,000, the individual becomes a candidate and must register under the Act. To download registration and reporting forms, please visit the FEC webpage for "Forms for Candidates and Authorized Committees."

If an individual decides not to run for federal office, there is no obligation to report these finances, and the donations made to the testing-the-waters committee will not count as contributions.

 

Additional Information

Further information on organizing a campaign committee can be found in the Campaign Guide for Congressional Candidates and Committees [PDF].

 

 

This article provides guidance on certain aspects of federal campaign finance law. It is not intended to replace the law or to change its meaning, nor does it create or confer any rights for or on any person or bind the Federal Election Commission (Commission) or the public. The reader is encouraged also to consult the Federal Election Campaign Act of 1971, as amended (2 U.S.C. 431 et seq.), Commission regulations (Title 11 of the Code of Federal Regulations), Commission advisory opinions, and applicable court decisions.  For further information, please contact:

Federal Election Commission
999 E Street, NW
Washington, DC  20463
(800) 424-9530; (202) 694-1100
info@fec.gov
www.fec.gov

 

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