Although corporations (including incorporated trade associations and membership organizations) and labor organizations are prohibited from using their treasury funds to make contributions in connection with federal elections, they are permitted to:
- Provide certain free legal and accounting servicesto a campaign;
- Allow employees, stockholders and members to make incidental use of their facilities for volunteer campaign work;
- Sponsor communications to the "restricted class" that contain express advocacy and may be coordinated with a candidate;
- Sponsor certain election-related communications to other employees and/or the general public, as long as they are not coordinated with a candidate; and
- Establish separate segregated funds (SSFs), which can support federal candidates.
Using facilities and resources
When using the facilities and resources of a corporation (including an incorporated trade association or membership organization) or labor organization, a campaign must pay the orgaanization according to the rules described on this page. Otherwise, the use may result in a prohibited contribution from the corporation or labor organization.
If a campaign uses the facilities of a corporation or labor organization, the campaign must reimburse the organization within a commercially reasonable time and at the usual and normal rental charge. Use of facilities may include, for example, the use of telephones, typewriters or office furniture. If another political committee or an individual reimburses a corporation or labor organization for the campaign-related use of its facilities, the payment is considered an in-kind contribution from that committee or individual to the campaign. (In the case of a political committee sponsored by the organization providing the facilities, it is also advisable that payment be made to the organization in advance in order to avoid a prohibited contribution from the organization.) Note, however, that employees, stockholders and members of a corporation or labor organization may make incidental use of an organization’s facilities, subject to the corporation or labor organization’s own rules, for volunteer work without having to reimburse the organization (except for any increased overhead).
Using meeting rooms
Candidates and political parties may, at the discretion of the organization, rent a corporation or labor organization’s meeting rooms at the usual and normal rate, provided reimbursement is made within a commercially reasonable time.
As with other facilities, if the organization’s political committee pays for the room as an in-kind contribution, it is advisable that payment be made in advance to avoid a prohibited contribution from the organization.
A candidate may be able to use the rooms for free or at a discount under the following conditions:
- The corporation or labor organization customarily makes its meeting rooms available to civic and community groups;
- The corporation or labor organization makes the rooms available to other candidates upon request; and
- The corporation or labor organization makes the rooms available to the candidates on the same terms given to other groups (i.e., for free or at a discount if those are the terms offered to other groups).
Using staff, food services and mailing lists
A corporation or labor organization may only allow its food services and mailing lists to be used for candidate fundraisers if it receives payment in advance at the fair market value for the goods or services. Likewise, a corporation or labor organization may direct its personnel to work on these fundraisers, so long as employees are not coerced into providing on-the-job fundraising services if they do not wish to perform them. In all cases, advance payment by a source that may legally make a contribution or expenditure (such as the campaign or the organization’s SSF) is required in order to avoid a prohibited contribution by the organization. FEC regulations specifically require advance payments for:
- The services of corporate or labor personnel directed to carry out candidate fundraising activities as part of their job;
- The use of the organization’s list of clients, customers, vendors or other persons outside the restricted class for purposes of soliciting contributions or distributing invitations; and
- The use of catering or other food services arranged for or provided by the corporation or labor organization.
Note, however, that if a corporation is providing the services (such as catering or personnel) in its ordinary course of business as a commercial vendor, payment does not have to be made in advance as long as:
- The payment is at the usual and normal charge; and
- The payment schedule conforms to normal business practice.
Otherwise, a prohibited contribution results.
Using corporate/labor name or trademark
A corporation or a labor organization may not use the corporation’s names, trademarks or service marks to facilitate the making of contributions to a federal political committee, and a federal political committee may not knowingly accept or receive such facilitated contributions. For example, a campaign may not recognize the corporate (or labor) employers of individual contributors in connection with a fundraising event. These restrictions do not apply to the use of a name as part of the name of a political committee.
Sponsored communications to the "restricted class"
A corporation’s restricted class consists of its executive and administrative personnel, its stockholders and the families of those two groups.
A labor organization’s restricted class consists of its members, executive and administrative personnel and the families of those two groups.
A membership organization’s restricted class generally includes the executive and administrative personnel of the organization, the organization’s members and the families of those two groups. Note: If a member is incorporated, a membership organization or trade association would communicate with the personnel of the member corporation with whom they normally conduct business.
An expenditure is coordinated if it is made in cooperation, consultation or concert with, or at the request or suggestion of, a candidate, a candidate’s authorized committee, or their agents, or a political party committee or its agents. FEC regulations provide for a three-part test to determine whether a communication is coordinated, and thus, represents an in-kind contribution (unless it is otherwise exempt under FEC regulations).
An expenditure that is coordinated between a candidate or the candidate’s campaign and a third party is considered an in-kind contribution to the candidate, which the candidate must report as a contribution received and an expenditure made. Because the Federal Election Campaign Act (the Act) prohibits corporations and labor organizations from making contributions, it is important to avoid coordination with corporations and labor organizations regarding communications outside the restricted class except to the extent permitted under FEC regulations at 11 CFR 114.4.
As a corporation or labor organization may communicate with its restricted class in a manner that expressly advocates the election or defeat of a clearly identified candidate, and the organization may coordinate these communications with the candidate without making a prohibited contribution. While such coordination does not transform the restricted class communication into an in-kind contribution, it may provide evidence that could jeopardize the independence of future communications to those outside the restricted class by the organization or its SSF.
Corporations and labor organizations may engage in certain types of communications to the restricted class provided they follow the guidelines contained in the FEC regulations.
Publications: A corporation or labor organization may produce and distribute publications that endorse or solicit funds for a candidate or party (as long as the publications are not reproductions of the candidate’s campaign materials and the organization does not actually collect the funds).
Web pages and emails: A corporation or labor organization may endorse or solicit funds for a candidate or party through an email directed solely to members of its restricted class. Likewise, a corporation or labor organization may set up a web page, accessible only by its restricted class, which may contain express advocacy or solicitations. Note that in either case the organization may not actually collect the funds, but may provide the address of the campaign to which contributions may be sent.
Candidate and party appearances: A candidate or party representative may make an appearance before the restricted class. He or she may solicit and accept contributions before, during or after the appearance.
Get-out-the-vote and voter registration drives and phone banks: The corporation or labor organization may run voter drives and phone banks urging the restricted class to vote for a particular candidate or to register with a particular party
Endorsements: Endorsements may be announced during a candidate appearance or in a publication to the restricted class.
Restricted class events
Under the exemptions at 114.3(c)(2) permitting candidate appearances before the restricted class, the corporation or labor organization may allow a candidate to solicit its restricted class at an event without the related costs for the event counting as a contribution. The candidate may also collect funds at the appearance. However, corporate or labor organization staff are prohibited from collecting funds for the campaign, with a limited exception discussed in the next paragraph.
An exception to the general prohibition on corporate or labor organization staff’s collection of funds at a candidate’s fundraising event exists in cases where the fundraiser is a restricted-class only event and the funds collected are treated not only as contributions to the candidate, but also as contributions both to and from the SSF of the corporation/labor organization. In this case, the event may not raise funds in excess of the SSF’s candidate contribution limit ($5,000 for a multicandidate PAC). Alternatively, the campaign may collect the funds.
As with restricted-class only events, corporate or labor organization staff may not collect contributions at an event that is coordinated, unless the funds collected are treated not only as contributions to the candidate, but also as contributions both to and from the SSF of the corporation/labor organization. Alternatively, the campaign may collect the funds.
If the campaign makes the advance payment for the costs of the event, it must report the cost as a campaign expenditure. If the advance payment is made by any other source, such as the corporation or labor organization’s SSF or an individual, the campaign must report it as an in-kind contribution received, where the event’s costs are required to be treated as an in-kind contribution.
Election-related communications not coordinated with the candidate
In addition, under Commission regulations, a corporation may make certain communications to individuals outside the restricted class.
Disbursements by corporations and labor organizations for election-related activities described in 11 CFR 114.4 (i.e., communications that reach beyond the restricted class) will not cause those activities to be contributions or expenditures, even when coordinated with any candidate or party committee to the extent permitted in those sections.
Note that any election-related communications made to those outside the restricted class may also be made to the restricted class.
Corporations and labor organizations may engage in the following types of election-related communications that go beyond the restricted class provided they follow the guidelines contained in FEC regulations.
Campaign-related candidate appearances before all employees and their families: The candidate, but not the sponsoring organization, may ask for support and may solicit contributions. Note, however, that the candidate may not accept contributions, but he or she may leave envelopes and campaign materials for the audience. Coordination between the candidate and the corporation or labor organization may include discussions regarding the structure, format and timing of the appearance, and the candidate’s position on issues, but may not include any discussion of the candidate’s plans, projects or needs relating to his or her campaign.
Noncampaign-related candidate appearances before the general public: Incumbent federal officeholders may make appearances in their official officeholder capacity. The discussion must be limited to issues of concern to the sponsoring organization and avoid any reference to campaign activity or solicitation of contributions. Note that an organization cannot pay for the candidate or the candidate’s staff to travel to such an officeholder event if the candidate holds a campaign event in the same area while there.
Candidate appearances at schools, colleges or universities: Candidates may make appearances at educational institutions without the appearance being a prohibited contribution, provided that the school makes a reasonable effort to ensure that the appearance is in an academic setting (such as a speech or a question/answer setting) rather than a campaign setting (such as a rally or event) and the school does not expressly advocate the election or defeat of, nor favor, any specific candidate. Alternatively, the facilities of the school may be provided to the campaign provided that the usual and normal rental charge is paid in the ordinary course of business.
Candidate debates: Candidate debates may be sponsored by a broadcaster, bona fide newspaper, magazine or other periodical or a nonprofit organization (i.e., those organizations under 501(c)(3) or (c)(4) of the Internal Revenue Code), in accordance with 11 CFR 110.13. In particular, a debate must include at least two candidates and should not be structured to promote or advance one candidate over the other.
Endorsements: The corporation or labor organization may endorse a candidate and may communicate the endorsement to the restricted class and the general public. Disbursements for announcements of endorsements to the general public are not contributions or expenditures provided that the public announcement is not coordinated with a campaign and the announcement is distributed only to normal media contacts for nonpolitical press releases and press conferences.
Support from separate segregated funds (SSFs)
Because the organization’s SSF may make communications to the general public using the funds it has raised, it may sponsor fundraising events for candidates and invite outside individuals and political committees. All related costs paid for by the SSF, including staff time, mailing, room rental and catering charges, may count as an in-kind contribution to the candidate, depending on whether the event is coordinated with the candidate or campaign. Note that, as with other uses of corporate/labor facilities, the SSF must pay in advance for any use of corporate/labor staff, food service or mailing lists. Additionally, it is advisable that the SSF pay for rooms and equipment in advance to avoid a prohibited contribution from the organization.