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  • FEC Record: Advisory opinions

AO 2016-08: Commercial vendor may operate online fundraising and contribution processing platforms

August 31, 2016

A commercial vendor may operate two internet-based platforms: one that provides fundraising services to political committees and another that allows individuals to contribute to federal political committees and encourage their online contacts to do the same.

Background
The requestor, eBundler.com, an LLC taxed as a partnership, has developed internet-based platforms that it plans to offer to political committees and other clients. The requestor proposes two platforms: "eBundler," a fundraising platform offered to political committees and other organizations; and "Donorship," a contribution processing and forwarding platform for individual donors. In some cases, the two platforms will work in tandem.

Through the Donorship platform, individuals will be able to make contributions to political committees, and other organizations. Users will be able to select a recipient political committee from a database and can add a political committee to the database if it is not already listed.

Before making a contribution to a federal political committee through the Donorship platform, an individual contributor will have to attest to their eligibility to make such a contribution. Contributors will be informed of the relevant contribution limits and prompted to enter the contributor information needed for the recipient political committee’s FEC reports. All contributions will be processed through a segregated account.

Individuals will also be able to upload their online contacts and email them committee solicitations using email templates provided through the Donorship platform. Individuals may add a personalized statement to their message, and track the total amount of contributions made in response to their solicitation.

The eBundler platform will provide fundraising services to political committees (and other organizations) that enter into a contract with the requestor. These client committees will then be able to personalize the landing page individual users of the Donorship platform will see when they select the client committee from the database, and will be able to create customized solicitation email templates for individuals to send to their contacts. Client committees will also have the ability to track contributions, obtain certain contributor information, contact contributors through the eBundler platform, and publicly recognize certain individual contributors.

The requestor will charge its clients a commercially reasonable fee, which will cover the costs of the services provided and a reasonable profit. Individuals will pay a fee for making contributions through the Donorship platform when the recipient political committee is not a client. Political committees that are clients will pay a fee to cover both the fundraising services provided through the eBundler platform and the contribution processing and forwarding services provided through the Donorship platform. While fees may vary for business reasons, the requestor states the fee variations will not be based in any way on political considerations.

Analysis
The Commission found the requestor’s provision of services through its online platforms to be permissible and that the provision of these services will not constitute a contribution.

The requestor proposed to provide services both to individual contributors and to political committees. Because different analyses apply to these situations, the Commission considered each separately.

Services to Contributors. In prior advisory opinions, including AO 2015-15 (WeSupportThat.com), AO 2014-07 (Crowdpac), and AO 2012-22 (skimmerhat), the Commission has determined that entities that process contributions as a service to contributors, and not to the recipient political committees, are not making contributions to those political committees. Like these prior requestors, the requestor here will forward contributions at the contributor’s direction to the contributor’s desired political committee and will charge a commercially reasonable fee for the service.

This proposal differs from others approved by the Commission only in that eBundler will provide individual users with tools allowing them to reach out to their online contacts and encourage them to contribute to a political committee. However, the Commission determined this difference was immaterial because the individual user, not eBundler, will have total control of whether to use these tools.

Therefore, the Commission concluded that the requestor’s provision of services to individuals through the Donorship platform will not constitute a contribution to recipient political committees.

Services to Political Committees. This request is also similar to online platforms approved by the Commission that provide contribution processing and fundraising services directly to political committees, such as AO 2012-09 (Points for Politics) and AO 2007-04 (Atlatl). In these past advisory opinions, the Commission concluded that a vendor providing contribution processing services to federal political committees does not amount to a contribution from the vendor. The Commission found these proposals permissible where: 1) the vendor provided the services in the ordinary course of business and at the usual and normal charge; 2) the vendor forwarded contributions though a segregated account to the recipient political committees; and 3) the vendor used proper screening procedures to prevent illegal contributions.

Here, the Commission determined that eBundler’s service package satisfies all three of these criteria. First, the requestor will provide these services as a for-profit developer of fundraising and contribution processing platforms and for a commercially reasonable fee, which will not be based on any political considerations. Second, the requestor will transfer the contributions from a segregated account to the recipient political committees within 10 days of receipt. Finally, eBundler will require contributors to attest to their ability to make a legal contribution, and the platform will reject one-time excessive contributions. By meeting the three criteria, the Commission determined that the requestor will be acting as a commercial vendor and this activity will not result in a contribution from the requestor to the recipient political committees.

Reporting
The Commission found the proposal will not result in any reporting requirements for the requestor. The requestor will not be a political committee, nor will it make any expenditures that require reporting. Furthermore, the requestor will not be subject to the reporting requirements applicable to conduits. The Commission has determined in advisory opinions such as AO 2012-22 (skimmerhat) that where, as here, a commercial vendor provides contribution processing services to contributors, the contributions made through the platform are not earmarked contributions made through an intermediary, but rather direct contributions from the contributor to the recipient. Moreover, the Commission regulation at 11 CFR 110.6(b)(2)(i)(D) exempts commercial fundraising firms from the definition of "conduit." The requestor, as a commercial vendor, also qualifies as a commercial fundraising firm, and thus will not be subject to the reporting requirements applicable to conduits.

Date issued 08/16/2016; 8 pages

Resources:

  • Author 
    • Isaac Baker
    • Communications Specialist