Running for local office offers a great way to kick off your political career. While not everyone starts their career with a local office, campaigns for local political offices tend to be much smaller than state and federal campaigns. As...
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Accepting Campaign Contributions
To run a successful campaign, you’ll need to raise money! While a few lucky candidates can fund their own political campaigns, you’re probably more like most candidates—who must fundraise from friends, family, acquaintances, and strangers who support their candidacy.
In order for you to collect political contributions, your campaign should be registered with a bank account. In addition, certain states and local jurisdictions have election laws with fundraising blackout periods—please make sure you check with your campaign finance authority before you get started! While doing so, also check for contribution limits and any restrictions on who can contribute to your campaign (and how).
For instance, if you’re running for a U.S. senate or congressional seat, you cannot accept contributions from businesses or federal contractors, but that’s not the case when you’re running to local office. There’s also a $100 limit on cash contributions. Such restrictions vary depending on the office and jurisdiction you’re running for, so please carefully read all the rules!
While your campaign can accept checks, cash, and wires, most contributions from individual donors come from credit and debit cards. When you select an online payment processing service to work with, it’s easiest to work with processors like PayPal or Stripe, for a simple reason: these payment processors have experience with political contributions and political fundraising. Processors with this familiarity are likely to have more reporting options and tools available for your compliance needs. Such features include collecting the appropriate information from your donors at the time of the contribution—which will not only save you time for follow up but also keep you in compliance with campaign finance laws when you report.
The payment processor will take a transaction fee for each contribution you receive. This fee usually ranges between 2.9% and 7%, which may be either a flat fee per transaction or a variable fee per transaction depending on the amount of the contribution and the card type used for the transaction. Certain platforms will also charge a monthly fixed fee on top of the transaction fees. Be sure to read all of the fine print regarding the fees before signing on with a payment processing service so you know both what costs to expect and when those fees are paid. For example, the fees are sometimes taken up front, with the net amount deposited to your campaign account, and sometimes taken as a lump sum at month end. The specific timing can be important as you plan your budget, so make sure you ask lots of questions before you officially sign on with any payment processor.
The payment processing service should provide you with the tools needed to create your contribution forms. Once your account is live, you can send out your contribution link to your donors and add it to your website.
As you might expect, your campaign will need to follow all relevant compliance and reporting requirements. A good rule of thumb is to remember that you’ll need to report on every dollar coming into your campaign and on every dollar going out. Even if there were no dollars associated, in-kind contributions may need to be reported as well.
If you want to make compliance easier, you can, like many campaigns, opt to work with a compliance firm (if your budget allows for it, of course). Such firms offer consultants who are well versed in campaign finance reform laws and regulations. Importantly, a compliance consultant can help you with a variety of activities, including those listed below:
- Registering your committee and opening your bank account
- Filing compliance reports with the appropriate authorities
- Bookkeeping, including accounts payable and accounts receivable
- Managing payroll and assisting with insurance
- Performing a compliance audit to ensure all campaign finance laws are being followed
To find a financial compliance firm, you can perform an online search for a firm servicing your type of campaign in your area, as well as ask fellow and former candidates, vendors, or political consultants for referrals. Many top compliance firms are party-specific and may only offer services to clients associated with a particular party. Others specialize in federal, state, or local races. When you evaluate the compliance firm, consider the scope of work they will provide, the types of clients they currently serve, and how their fees line up with the services you need (or want). If you expect to have a lot of complexity in how you’re accepting campaign contributions (like accepting cryptocurrency), you may want to ask specifically about their ability to handle those transactions and any prior experience doing so.
While you can file your compliance reports without a compliance professional, you may want to hire one to help if you have a large volume of activity or are running in a complicated jurisdiction. A compliance professional can often free up your time as a candidate, allowing you to focus on running for office and providing you with peace of mind.
Another important aspect of managing contributions is preparing and submitting contribution reports. Here, two aspects are vital to ensuring you stay in compliance with any regulations: first, when fundraising, collect the appropriate data needed to file your contribution reports with the appropriate regulatory body, and second, ensure each contribution report is 100% accurate.
For federal political committees, all contributions of $200 or more in aggregate are public and searchable in the FEC Individual Contributions Database. Public disclosure of contributions at the state and local level will vary depending on contribution amount. However, under the Federal Election Campaign Act, information about individual contributors taken from FEC reports cannot be sold or used for soliciting contributions (including any political or charitable contribution) or for any commercial purpose. All disclosures are only for informational purposes.
During your campaign, your campaign funds can be used for day-to-day operations: campaign fundraisers, travel, campaign materials (e.g., yard signs, fliers, stickers, etc.), and advertising (TV, radio, social media), as just a few examples. The goal is to always spend contributions in support of your campaign, but if there are contributions leftover after your campaign has ended, those funds can be donated to charities or other political committees—however, please make sure you research limits and allowable organizations because the laws vary by jurisdiction. Or… you could always save the money in case you choose to run for office again! As always, the use of campaign funds for personal use is prohibited. Don’t be that person.
- Why are compliance audits important for my political campaign?
A compliance audit is a review that’s performed by a compliance firm to ensure that your campaign is correctly following campaign finance laws. This process involves looking for the proper contribution disclosures and ensuring that campaign funds are legitimately gained and only used for politically appropriate uses.
- Can my political campaign donate to charity?
Yes, as long as you don’t receive any financial support from the charity before or after the donation. The charity can’t contribute to your campaign, either.
- What can my campaign funds be used for?
Your campaign funds can be used for any purpose that serves the political campaign. These purposes includes travel, political advertising (yard signs, TV ads, mailers, social media, etc.), operational costs (fundraising events, office space, staffing, etc.), and GOTV efforts (phonebanking, door knocking, polling, etc.). Once your campaign has ended, any remaining funds can be used to pay off outstanding debts, kept for your next campaign, or donated to charity or another political campaign.
- Can I, as the political candidate, keep my leftover campaign funds?
Candidates can keep campaign funds after the election, but they cannot be used for personal use. The funds can be kept in the campaign’s bank account if you wish to run for office again in the future. Alternatively, funds can also be used to pay off any outstanding campaign debts or donated to another political campaign.