AO 2015-08: Company may operate candidate contribution charitable match platform
A for-profit corporation may operate a web-based platform allowing members to pledge money to a federal candidate and, at the same time, designate a charity to receive the contribution instead, should an opposing federal candidate receive matching pledges.
Repledge, a for-profit corporation, plans to operate a web-based platform that will allow supporters to pledge money to a federal candidate. Repledge "members" will simultaneously designate a charity to receive the funds if their pledges to a federal candidate are matched by pledges to the opposing candidate.
This matching pledge platform will operate with respect to the two major party nominees in the 2016 presidential election. For example, if Repledge members pledge $1,000 to Candidate X and $700 to opponent Candidate Y (for total pledges of $1,700), then $1,400 (the amount of matched pledges) will be donated to the selected charities. The remaining $300 (the amount of unmatched pledges) will be contributed to Candidate X, and no money will be contributed to Candidate Y. Pledges to one candidate effectively cancel out pledges to the opposing candidate. Repledge will transmit the individual contributions based on the percentage of candidate pledges that go unmatched. For example, if 10 members each pledge $100 to Candidate X (totaling $1,000) and 20 members pledge $20 to Candidate Y (totaling $400), then 60 percent ($600 out of $1,000) of each individual’s pledge to Candidate X will be contributed to Candidate X. The remaining 40 percent of each individual pledge to Candidate X (and 100 percent of Candidate Y pledges) will be donated to the chosen charities.
Repledge will operate "fund drives," lasting seven to 14 days, in which members will make pledges to their preferred candidates and charities by entering their credit card information. The payment processer will "pre-approve" the pledge by placing a hold on the account. At the end of the drive, based on the presence or absence of matched pledges to the opposing candidate, the credit card payments will be processed and the funds will be allocated among the candidate committees and/or charitable organizations. Repledge will charge a commercially reasonable transaction fee estimated at one percent of each pledge.
The requestor will inform members of the contribution limits established by the Federal Election Campaign Act (the Act) and will not allow members to pledge excessive contributions. Repledge will also require each member to attest to their eligibility to make a contribution before pledging funds. Finally, Repledge will require each member to provide the necessary contributor information (name, address, occupation, and employer), and will forward this information to the recipient candidate committees.
Repledge's plan builds on other web-based contribution platforms approved by the Commission in the sense that Repledge member contributions will only be transmitted at the member's request. Like proposals addressed in previous advisory opinions, Repledge will not contract with the recipient political committees, except possibly to authorize fund transfers from member contributions. AOs 2007-04 (Atlatl., Inc.), 2011-06 (Democracy Engine).
However, Repledge's proposal differs from these other web-based contribution platforms approved by the Commission in two ways. First, Repledge will limit its services to the two major party nominees in the 2016 presidential election. The Commission found that Repledge's selection of a pair of opposing candidates does not raise concerns that Repledge is selecting candidates as recipients in order to influence the outcome of the election, as long as Repledge transmits the funds to the opposing candidates, as requested by its members, on identical terms and without any preferential placement or treatment.
Second, the ultimate amount of a member contribution to a presidential candidate depends in part on how much other members pledge to that candidate's opponent. The Commission determined this difference was immaterial, considering Repledge will establish and communicate the specific criteria of the platform to members before any pledges are made. The criteria for member pledges will not be subject to change, and Repledge will disclose all the transaction costs and the amounts distributed to the recipient charities and political committees, thereby enabling verification of matching calculations. Given these circumstances, the Commission found Repledge's proposal to be consistent with Commission findings in previous advisory opinions.
The Commission concluded that Repledge members would not make a contribution to a political committee merely by pledging funds, because a pledge represents merely a conditional promise to make a contribution at a future date. As such, pledges would not be subject to the contribution forwarding requirements of 52 U.S.C. § 30102(b).
Repledge would not make an impermissible corporate contribution when processing and forwarding contributions to recipient committees. The Commission further concluded that, under its proposal, Repledge would not violate the prohibition on corporations acting as a conduit for contributions earmarked to candidates.
Repledge's receipt of the transaction fee would not constitute receipt of a contribution from the member. Additionally, a Repledge member's payment of a transaction fee to Repledge or its payment processor would not constitute a contribution to the recipient political committee.
Date issued: 11/09/2015; 10 pages