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Earmarked contributions forwarded by the SSF

An SSF may act as a conduit for an earmarked contribution, i.e., a contribution that the individual contributor directs, either orally or in writing, to a clearly identified candidate or candidate’s committee through the SSF. (The connected organization may never serve as the conduit.) An earmarked contribution counts against the original contributor’s contribution limits. It does not count against the limits on the SSF’s own contributions to the candidate unless the SSF exercises direction or control over the contributor’s choice of the recipient candidate or unless the earmarked contribution was solicited by the connected organization.

Earmarking may take the form of a designation, instruction or encumbrance and may be direct or indirect, oral or written, express or implied. Earmarked contributions require additional disclosure.

Conduit/intermediary

Anyone who receives and forwards an earmarked contribution to a candidate or a candidate’s committee is considered a conduit or intermediary. (The terms “conduit” and “intermediary” are interchangeable; “conduit” will be used in the remainder of this page.) Individuals, political committees (including an SSF), unregistered PACs and partnerships may act as conduits for earmarked contributions.

Persons not considered conduits

For the purposes of the earmarking rules, certain individuals and organizations are not considered conduits even though they may participate in activities to raise money for a candidate. These persons include:

  • An employee or full-time volunteer working for a candidate committee;
  • An individual who occupies a significant position in a candidate’s campaign and who is expressly authorized to raise money on behalf of the candidate;
  • A committee affiliated with the candidate committee; and
  • A commercial fundraising firm retained by the candidate committee.

Prohibitions apply

No corporation (including an incorporated trade association or membership organization), labor organization or other entity prohibited from making contributions in connection with federal elections may act as a conduit for an earmarked contribution. An SSF, however, may act as a conduit.

Furthermore, no individual may receive a contribution on behalf of a candidate (as a conduit or otherwise) while acting as the representative of a corporation, labor organization or other entity prohibited from making contributions.

Effect on contribution limits

Contributor’s limit

An earmarked contribution counts against the contributor’s contribution limit for the recipient candidate.

Conduit’s limit

Direction or control

The conduit’s contribution limit is implicated when the conduit exercises direction or control over the contributor’s choice of the recipient candidate. In that case, the full amount of the contribution counts against the limits of both the original contributor and the conduit, even though the candidate receives only one contribution.

Contributions earmarked through SSF

Unsolicited

A corporation or labor organization may never act as a conduit for earmarked contributions. A corporation or labor organization’s SSF, however, may collect and forward earmarked contributions. An unsolicited earmarked contribution, transmitted to a candidate through the SSF, counts against the original contributor’s contribution limits, but it does not count against the limits on the SSF’s own contributions to the candidate.

Solicited

If, however, the earmarked contribution was solicited from the restricted class via a communication from the SSF’s connected organization, and was collected by the SSF, it is considered a contribution to both the SSF and the candidate, and from both the individual contributor and the SSF. As such, the earmarked contribution counts against several contribution limits.

Note, however, that the costs of the solicitation of the earmarked contribution only count as an in-kind contribution from the SSF to the campaign if the communication soliciting the contribution was coordinated with the candidate or his or her agents or campaign.

Effect on unregistered organization

An unregistered organization acting as a conduit (e.g., a state PAC of a connected organization) should be aware that conduit activity could result in a contribution or expenditure made by the organization (e.g., if the costs of a solicitation of earmarked contributions result in an in-kind contribution made by the state PAC or if the organization’s solicitation of its restricted class results in the amounts forwarded counting as a contribution from the state PAC). In such a case, the activity may trigger registration requirements for the unregistered organization, as a contribution or expenditure made in any amount triggers registration for an SSF.

Deferred earmarking via payroll deduction

A member of the restricted class who contributes to the SSF through a payroll deduction program may subsequently earmark those contributions for specific candidates, subject to the requirements outlined. Such a program is sometimes referred to as “deferred earmarking.”

Obtaining designation and forwarding the contribution

The SSF must obtain a signed and dated statement from each contributor designating the particular candidate to receive the contribution, and the amount to be forwarded. Contributors should also designate the election to which they are contributing. While earmarked contributions must normally be forwarded to a candidate within 10 days of receipt, in this instance the SSF must forward the earmarked contributions to the named candidate within 10 days of the designation of the funds.

Ledger accounts

The SSF must keep a ledger account of each individual’s payroll deduction contributions. In the case of a program set up for earmarking after the deduction is made, this accounting method assures that the funds will not be used until the contributor designates them for a specific candidate. In one program (AO 1995-15), funds that were left undesignated past the deadline set for designation were available for use by the SSF.

Effect on contribution limits

The committee must consider all funds collected through payroll deduction as contributions to the SSF, regardless of whether contributors will have the later option of earmarking them for specified candidates. The contributions, once designated for candidates, are viewed as contributions to the candidate and also as contributions made by the SSF, and count against the applicable limits. 

Reporting deferred earmarking

The SSF must report receipts from participating employees as contributions to the SSF at the time the SSF receives the deduction proceeds from the employee's salary or receives the employee's check. Such contributions must be itemized when the employee's total for the calendar year exceeds $200. As a conduit of earmarked contributions, the SSF must disclose the conduit transaction in its reports according to the guidelines on this page.

Forwarding earmarked contributions

The SSF must forward an earmarked contribution to the recipient candidate committee within 10 days of receiving the contribution.

Along with the funds, the conduit must also forward to the recipient candidate committee a transmittal report containing information that the candidate’s campaign committee will need for its own records and reports.

Contributions exceeding $50

When an earmarked contribution exceeds $50, the accompanying transmittal report must contain the name and mailing address of the original contributor, the date the contribution was received by the conduit and the amount.  The report should also state the election designated by the contributor, if any.

Contributions exceeding $200

When an earmarked contribution exceeds $200, the accompanying report must contain the full name and mailing address of the contributor, the contributor’s occupation and name of employer, the date the contribution was received by the conduit and the amount. The report should also state the election designated by the contributor, if any.

Reporting earmarked contributions

An earmarked contribution must be reported by both the conduit (political committee or unregistered entity, including an individual) and the recipient authorized committee. The conduit must comply with special reporting rules, which vary depending on whether the contribution was deposited in the conduit’s bank account or was passed on directly to the campaign in the form of the original contributor’s check.

Reports by unregistered conduit

A conduit that is not a registered political committee —that is, a conduit that is an individual or a group—must send a transmittal letter to the recipient authorized committee when it forwards the contributions and must also file a report by letter with the FEC (but not with the Secretary of the Senate) within 30 days of forwarding the contribution. The letter should contain all the information listed for SSF conduits.

Report filed by SSF acting as conduit

An SSF that serves as a conduit for an earmarked contribution must disclose the earmarked contribution, regardless of amount, on two separate reports: the committee’s next regularly scheduled FEC report and a special transmittal report sent to the recipient authorized committee.

Next regularly scheduled FEC report

The conduit’s next regularly scheduled report must indicate whether the earmarked contribution was:

  • Transmitted through the conduit’s account, in which case each contribution must be reported on the reporting schedules for itemized receipts and disbursements (Schedules A and B); or
  • Transmitted in the form of the original contributor’s check, in which case each earmarked contribution must be reported as a memo entry on Schedules A and B.

Contents of report by SSF acting as conduit

For an earmarked contribution, an SSF must itemize the following information on Schedule A:

  • The name and mailing address of the original contributor making an earmarked contribution and, if the contribution is from an individual and exceeds $200, the contributor’s occupation and employer;
  • The amount of the earmarked contribution;
  • The date the contribution was received by the conduit;
  • The recipient candidate, as designated by the contributor; and
  • The election for which the contribution was designated, if any.

Along with the information required on Schedule A, an SSF reports the forwarding of the contribution to the candidate on Schedule B by itemizing:

  • The candidate designated by the contributor;
  • The date the contribution was forwarded to the candidate;
  • The amount forwarded to the candidate;
  • The election designated by the contributor, if any;
  • The name of the contributor;
  • A notation of whether the contribution was passed on in cash, by the contributor’s check or by the conduit’s check; and
  • A statement indicating that the conduit’s limit was also affected, if appropriate.