Raising and spending funds for the national party's nominating convention
Between 1976 and 2012, the major parties’ presidential nominating conventions were publicly funded. In 2014, however, legislation was enacted to end public funding of conventions and to enable national party committees to establish a separate account to defray certain expenses incurred with respect to presidential nominating conventions. Currently, national nominating conventions are funded through contributions made to the national party committees’ convention accounts. Certain supplemental services, however, may be provided by the host state and city governments and by groups such as retail businesses and labor organizations:
- Government agencies and municipal corporations may use tax revenues or privately raised funds to provide facilities and services for the convention;
- Retail businesses may offer discounts to the national party for goods or services related to the convention, and free samples and promotional materials to convention attendees.
Finally, individual candidates and delegates may also raise and spend funds for their travel and other expenses related to the convention.
Contributions to the national party committee's convention account
The contribution limits applicable to the national party committee’s convention account are 300 percent of the limits on contributions to national party committees. Such contributions may not be made by sources prohibited from making contributions to a party committee. The national party committee may transfer the funds raised by the convention account into its convention committee (a committee that represents a political party in making arrangements for that party's convention to nominate a candidate for the office of President and Vice President.)
Donations to host committees and convention committees
The principal purpose of a host committee (any not for profit local organization such as a local civic association, business league, chamber of commerce, real estate board, board of trade, or convention bureau, whose net earnings do not inure to the benefit of any private shareholder or individual) or, alternatively, of a municipal fund (any fund or account of a government agency, municipality, or municipal corporation, the receipt and use of funds of which is subject to the control of officials of the state or local government), is the encouragement of commerce in the convention city and the projection of a favorable image of the city to convention attendees.
Host committees must register and file reports with the FEC, disclosing all of their receipts and disbursements. They are also audited by the Commission.
Businesses (including banks and other corporations), labor organizations, other organizations and individuals may donate funds or make in-kind donations to a host committee or municipal fund for the following purposes:
- To promote the suitability of the city as a convention site;
- To welcome convention attendees (for example, by providing information booths, receptions, tours or promotional items);
- To facilitate commerce (for example, by providing convention attendees with shopping or entertainment guides, samples, maps, pens, pencils or other items of de minimis value);
- To defray the host committee’s administrative expenses (for example, salaries, rent, travel or liability insurance);
- To provide the national committee use of an auditorium or convention center and to provide related services (for example, construction of podiums, press tables, camera platforms, lighting and electrical systems; offices; office equipment; and/or decorations);
- To defray the cost of local transportation services (for example, by providing buses and automobiles);
- To defray the cost of law enforcement services;
- To defray the cost of using central housing and reservation services;
- To provide hotel rooms at no charge or a reduced rate on the basis of number of rooms actually booked for the convention;
- To provide accommodations and hospitality for committees of the parties responsible for choosing the sites of the conventions; and
- To provide other similar convention-related facilities and services.
Donations by commercial vendors
Under limited circumstances, commercial vendors may provide goods and services in connection with the presidential nominating convention, without the value counting as either a contribution or an expenditure.
Discounts provided to national committees and host committees
Commercial vendors may provide goods and services to the national convention committee and host committees at a discount or for free if this arrangement is made in the ordinary course of business. "In the ordinary course of business" means:
- The vendor has an established practice of providing such discounts to nonpolitical clients; or
- The reduction is consistent with an established practice of the vendor’s trade or industry.
Permissible discounts include standard volume discounts and reduced rates for corporate, governmental or preferred customers.
Samples and items provided to national committees and host committees
Commercial vendors (including banks) may provide items of de minimis value at nominal or no charge. For example, samples, discount coupons, maps, pens, pencils, tote bags or other items may be distributed to convention attendees. Discounts and items of de minimis value as described above do not have to be reported.
Commercial vendors also may, in the ordinary course of business, provide the convention committee and the host committee with goods and services in exchange for promotional consideration. The value of these goods and services may not exceed the commercial benefit reasonably expected to be derived from the promotional opportunity the convention presents. (Note, however, that these arrangements are not limited to manufacturers recognized by the party or host committee as “official providers,” but also include a variety of promotional arrangements.)
Reporting promotional arrangements
The convention and host committees must disclose, as memo entries, any promotional arrangements with commercial vendors in its FEC reports.