What is a contribution?
A contribution is anything of value given, loaned or advanced to influence a federal election. It is important to understand which receipts and expenditures are considered contributions because:
- Contributions are generally subject to the Federal Election Campaign Act’s (the Act’s) prohibitions against contributions from certain sources.
- Contributions are generally subject to the Act’s limits on the amount of contributions made and received.
- Contributions made and received by an SSF are also subject to the Act’s recordkeeping and reporting requirements.
Although corporations and labor organizations are generally prohibited from making contributions in connection with federal elections, their SSFs may. SSFs must view contributions from two different perspectives: they both make contributions and receive them. The Act generally limits the amounts that may be contributed by and to an SSF, and contributions to the SSF from certain sources are prohibited altogether. This page describes the different types of contributions and the limits and prohibitions that apply to each type.
Types of contributions
Gifts of money
A contribution of money may be made by check, cash (currency), credit card or other negotiable instrument. But no SSF (or other political committee) may accept cash contributions exceeding $100 from any person.
Reporting monetary contributions
Itemize contributions from individuals and groups other than political committees on Schedule A for Line 11(a)(i). Contributions from individuals are reported on Line 11(a) and itemized once they aggregate in excess of $200 for the calendar year from a specific contributor.
Contributions from political party committees and contributions from other political committees
Itemize all contributions from party committees, SSFs and nonconnected committees (including party organizations and committees that do not qualify as political committees under the Act).
Contributions from party committees are itemized on Schedule A for Line 11(b). Contributions from other types of political committees (including SSFs, nonconnected committees and committees that do not qualify as political committees) are itemized on Schedule A for Line 11(c).
Goods and services offered free of charge or at less than the usual and normal charge result in an in-kind contribution. Similarly, when a person pays for services on the committee’s behalf, the payment is an in-kind contribution. (Note, however, that a connected organization's payment of the SSF’s administrative and fundraising expenses is exempt.) An expenditure made by any person or committee (including an SSF) in cooperation, consultation or concert with, or at the request or suggestion of, a candidate’s campaign or a party committee is also considered an in-kind contribution to the candidate or party.
Goods (such as equipment, supplies, facilities and mailing lists) are valued at the price the item or facility would cost if purchased or rented at the time the contribution is made. Services (such as advertising, printing or consultant services) are valued at the amount that would have been paid under the prevailing commercial rate at the time the services are rendered.
The value of an in-kind contribution counts against the same contribution limit as a gift of money. For example, if an individual donates a computer to an SSF, the value of the contribution equals the ordinary market price of the computer at the time of the contribution. To avoid exceeding any contribution limits, this amount must be aggregated with any other (in-kind or monetary) contribution the individual made to the SSF during the calendar year.
Discounts are not contributions if they are offered in the ordinary course of business to both political and nonpolitical clients. If not offered in the ordinary course of business, discounts are considered contributions and are valued at the amount discounted (i.e., the difference between the usual and normal charge and the amount paid by the committee).
The contributor should notify a recipient committee of the value of an in-kind contribution. The recipient needs this information in order to monitor the contributor’s aggregate contributions and to report the correct amount.
Reporting in-kind contributions received
When determining whether to itemize an in-kind contribution received, follow the guidelines listed under “Reporting monetary contributions.”
In addition, add the value of the in-kind contribution to the operating expenditures total on Line 21(b) (in order to avoid inflating the cash-on-hand amount).
If the in-kind contribution must be itemized on Schedule A, then it must also be itemized on a Schedule B for operating expenditures.
When a committee receives an in-kind contribution whose value may appreciate over time, such as stock or artwork, special reporting rules apply:
- Itemize the initial gift, if necessary, as a memo entry on Schedule A. Under “Amount,” report the fair market value of the contribution on the date the item was received. Do not include that amount in the total for Line 11(a)(i) on the Detailed Summary
- Once the item is sold, report the sale price as a contribution on Line 11(a)(i) if the purchaser is known or as an “other receipt” on Line 15 if the purchaser is unknown. Itemize the transaction on Schedule A if necessary.
Proceeds from fundraisers and sales
The entire amount paid to attend a political fundraiser or other political event or to purchase a fundraising item from a political committee is a contribution. For example, if an SSF pays $100 to buy a ticket to a campaign’s fundraising dinner, the entire $100 is considered a contribution to the campaign committee, even though the meal may have cost $30. Similarly, if the SSF sells tee-shirts for $20 each to its restricted class that cost the SSF $5, the contributors have each made a $20 contribution.
Extensions of credit
An extension of credit outside of a creditor’s ordinary course of business is considered a contribution. If the creditor is incorporated, an extension of credit beyond the ordinary course of business would result in a prohibited contribution.