Types of contributions
Contributions are the most common source of campaign support.
A contribution is anything of value given, loaned or advanced to influence a federal election. It is important to understand which receipts are considered contributions because:
- Contributions count toward the threshold that determines whether an individual has qualified as a candidate under the Federal Election Campaign Act (the Act).
- Contributions are subject to the Act’s source prohibitions.
- Contributions are subject to the Act’s amount limitations.
Like all receipts, contributions are also subject to the Act’s recordkeeping and reporting requirements.
Gifts of money and loans
A contribution of money may be made by check, cash (currency), credit card or other written instrument.
A loan, including a loan to the campaign from a member of the candidate’s family, is considered a contribution to the extent of the outstanding balance of the loan. (Bank loans, however, are not considered contributions if made in the ordinary course of business and on a basis that assures repayment.) An unpaid loan, when added to other contributions from the same contributor, must not exceed the contribution limit. Repayments made on the loan reduce the amount of the contribution. Once repaid in full, a loan no longer counts against the contributor’s contribution limit. However, a loan exceeding the limit is unlawful even if it is repaid in full. Besides being reported as a contribution, a loan must be continuously reported as a debt until it is fully repaid.
Goods or services offered free or at less than the usual charge result in an in-kind contribution. Similarly, when a person pays for goods or services on the committee’s behalf, the payment is an in-kind contribution. An expenditure made by any person in cooperation, consultation or concert with, or at the request or suggestion of, a candidate’s campaign is also considered an in-kind contribution to the candidate.
The value of an in-kind contribution—the usual and normal charge—counts against the contribution limit as a gift of money does. Additionally, like any other contribution, in-kind contributions count against the contributor’s limit for the next election, unless they are otherwise designated.
Goods (such as facilities, equipment, supplies or mailing lists) are valued at the price the item or facility would cost if purchased or rented at the time the contribution is made. For example, if someone donates a personal computer to the campaign, the contribution equals the ordinary market price of the computer at the time of the contribution.
Services (such as advertising, printing or consultant services) are valued at the prevailing commercial rate at the time the services are rendered.
Notifying the recipient
The contributor needs to notify the recipient candidate committee of the value of an in-kind contribution. The committee's treasurer needs this information in order to monitor the contributor’s aggregate contributions and to report the correct amount.
In-kind contributions designated for more than one election in the an election cycle
In Advisory Opinion (AO) 1996-29, the Commission determined that the value of an in-kind contribution of used computer equipment, received before the primary and designated in writing by the contributors for all elections in the cycle, could, in fact, be allocated among all elections in the same election cycle. The contribution was distinguishable from the type of in-kind contribution that is used for one particular election (such as printing or mailing costs related to a general election fundraiser). If the candidate had lost the primary election, the committee would have had to refund the amount designated for the general election (In this case, the candidate was active in each election within the election cycle.) The total value of the contribution could not exceed the contributor’s combined limit for all the elections in the cycle. (The Commission did not address the issue of allocating an in-kind contribution over more than one election cycle.)
Under limited exemptions, persons may provide certain goods and services to a committee without making contributions. For example, when services are volunteered—not paid for by anyone—the activity is not considered a contribution.
Advances of personal funds
When an individual uses personal funds (or personal credit) to pay for a campaign expense, that payment is generally an in-kind contribution from that individual. Although such advances are considered in-kind contributions until reimbursed, special reporting rules apply when individuals pay for campaign expenses and later receive reimbursement from the committee.
When a committee, group or individual pays for a communication that is coordinated with a campaign or a candidate, the communication is either an in-kind contribution or, in some limited cases, a coordinated party expenditure by a party committee.
The Commission has determined that contributions of bitcoins are “money or anything of value” within the meaning of the Act.
The value of bitcoin contributions is based on the market value of bitcoins at the time the contribution is received. To determine the market value, the committee should first rely on any contemporaneous determination provided by the entity that processes the bitcoin contribution. If, however, the contribution
is made through an entity that does not provide an exchange rate for that contribution (or if no processor is involved in the transaction), then the recipient committee may value the contribution using another reasonable exchange rate of bitcoins for dollars.
Proceeds from sales
The entire amount paid to attend a political fundraiser or other political event or to purchase a fundraising item sold by a political committee is a contribution and counts against the individual’s contribution limit. For example, if a contributor pays $100 to buy a ticket to a fundraising dinner, the entire $100 is considered a contribution to the committee, even though the meal may have cost the committee $30. Similarly, if a contributor spends $20 to buy a campaign t-shirt that cost the campaign $5, the contributor has made a $20 contribution.
An earmarked contribution is one which the contributor directs (either orally or in writing) a clearly identified candidate or the candidate’s authorized committee through an intermediary or conduit. Earmarking may take the form of a designation, instruction or encumbrance and may be direct or indirect, express or implied, written or oral. Earmarked contributions require additional disclosure.
Lobbyist bundled contributions
A bundled contribution is any contribution that is either:
- Forwarded to a reporting committee by a lobbyist/registrant or lobbyist/registrant PAC; or
- Received by the reporting committee and credited to a lobbyist/registrant or lobbyist/registrant PAC through “records, designations, or other means of recognizing that a certain amount of money has been raised.”
Bundled contributions do not include contributions made from the personal funds of the lobbyist/registrant who forwards or is credited with raising those contributions and the personal funds of that person's spouse. Likewise, contributions made from committee funds of a lobbyist/registrant PAC that forwards or is credited with raising those contributions are not bundled contributions.
Crediting through "records" means that the reporting committee or candidate attributes contributions to a lobbyist/registrant or lobbyist/registrant PAC through written evidence (such as writings, charts, computer files, tables, spreadsheets, databases, and other data or data compilations in any medium or format).
Crediting through "designations or other means of recognizing that a certain amount of money has been raised" means that the reporting committee has given benefits to a lobbyist/registrant or lobbyist/registrant PAC for having raised a certain amount of contributions. Examples include titles, tracking identifiers, access to events or activities, and mementos (such as photographs with the candidate, or autographed copies of books authored by the candidate). This list is not exhaustive, and “designations or other means of recognizing that a certain amount of money has been raised” need not be in writing.
A joint contribution is a contribution that is made by more than one person using a single check or other written instrument. Although each individual has a separate contribution limit, joint contributors may combine their contributions in a joint contribution (for example, one check for $5,800 representing contributions from two individuals for a candidate’s primary election) as long as both contributors sign the check (or an attached statement). Note that a joint contribution must represent the personal funds of each contributor because contributions made in the name of another are prohibited.
Each contributor must sign the check
When making a joint contribution, each contributor must sign the check (or other written instrument) or a statement that accompanies the contribution. If the check or an accompanying statement of attribution is not signed by each contributor, the entire contribution will be attributed only to the party who signed the check. However, under certain circumstances the committee may presumptively reattribute the excessive portion of a contribution.
Exception: partnership and LLCs
Contributions from partnerships and certain LLCs are not considered joint contributions, but do trigger special attribution requirements.
If the check or statement does not indicate how much should be attributed to each donor, the recipient committee must attribute the contribution in equal portions. For example, if a committee receives a $1,000 joint contribution signed by two individuals but with no written attribution, the committee must attribute a $500 contribution to each donor.
Joint fundraising is election-related fundraising conducted jointly by a political committee and one or more other political committees or unregistered organizations.
All participants in a joint fundraising effort, including unregistered organizations, must:
- Create or select a federal political committee to act as the joint fundraising representative;
- Agree to a formula for allocating proceeds and expenses;
- Sign a written agreement naming the joint 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 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.
Transfers of funds and assets between federal committees authorized or established by the same candidate are generally unlimited because the committees are considered affiliated committees. However, an authorized committee of a federal candidate may not accept any transfers of funds or assets from a committee established by the same candidate for a nonfederal election.