Political Finance Compliance Best Practices

Finance compliance is a critical but complicated aspect of any successful campaign, and knowing where to get started can feel overwhelming. How do you learn what the laws are for your specific election? Who is best suited to help you stay in compliance? How much energy should you devote to compliance when there are so many other things that need your attention?

We’ve detailed the basics of financial compliance that we’ve learned from the compliance teams we work with, and included helpful tips that compliance expert Jonathan Brill from Computare Partners was able to share with us during a recent interview.

The Basics of Financial Compliance

What is campaign compliance?

Regardless of the level of your race, every campaign is subject to specific laws and guidelines. When it comes to campaign finances there are a number of important things to be aware of. 

In federal elections, for example, political finance compliance laws include:

• contribution limits
• candidate loans and debts
• how campaign funds can be used
• what records must be maintained
• finance reporting deadlines
• who campaign assets can be sold to
• what travel costs can be covered by campaign funds

…and so much more. 

Why is compliance important in politics?

Finances are key in a campaign. Although raising the most money doesn’t guarantee victory, having a healthy budget is essential for the success of most campaigns. It enables you to hire staff, organize events, and cover the costs of all necessary campaign materials. The way you raise and spend your campaign money must be in accordance with your specific election laws. Compliance becomes an issue when you don’t follow the legal requirements set for you. 

It doesn’t take much for a loss of compliance to damage your entire campaign— even if it hasn’t actually happened yet. One compliance expert warns that a letter from the Division of Elections regarding a small error in your finances can quickly become an article or tweet that’s reshared and retweeted as the validity of your campaign comes into question. The best answer for risk mitigation is to invest in the time and resources it takes to keep your finances in line at every point of the campaign. 

How do I find out about my compliance expectations?

Compliance expectations vary based on your level of race. 

For local races, your city hall or local government website should be able to provide information about what it takes to remain financially compliant.  For state races, a quick search of [state] + ‘political finance compliance’ typically provides the results you need. The Federal Election Commission provides guidelines for national candidates regarding financial compliance. 

Financial compliance best practices

The National Democratic Training Committee suggests a number of policies and procedures to consider when building an effective campaign compliance program. 

Maintain accurate records

Keep all records that show your incoming and outgoing funds, and organize them into categories including:

• bank statements and deposit slips
• invoices
• receipts
• bills
• credit card statements
• copies of checks and money orders
• contribution cards
• contracts

Authorize and track expenditures

Whether it’s for a $3 coffee or $3,000 in yard signs, record every expense that comes out of your campaign fund. It’s also wise to designate an amount that requires approval from the candidate and/or treasurer.

Track contributions

As part of your compliance plan, determine the timeframe in which contributions should be processed, recorded, and reposited. One of the easiest ways to do so is designate specific volunteers or campaign staff to perform duties on certain days of the week. This table from the NDTC gives you an idea of what this might look like.

Reconcile your financials

At least once a month, someone should review the campaign’s online bank transitions to ensure all deposits and withdrawals are recorded and the budget is correctly balanced. In addition, this person should look over the next month’s contracts and invoices so you can anticipate upcoming expenses. 

Complete campaign finance reports

This isn’t just best practice— it’s the law. The agency that your campaign reports to will have designated dates throughout the campaign period when you are required to submit a finance report detailing all of your incoming and outgoing money. 

Stay organized

Advancing technology and campaign practices mean there’s no shortage of tools available to keep your finances in line. Before you even kick off your campaign, compliance experts suggest choosing a tool that will help you stay organized. For smaller local races this might mean a spreadsheet with a detailed schedule. Larger races will benefit from more involved, fully integrated strategies such as using a compliance software or working with a compliance team.  

Compliance management software

While a local campaign may be able to stay in compliance using a shared spreadsheet, larger and more complicated campaigns will benefit from using compliance management software.

You’ve got several options to choose from, such as—

IS Political

ISP offers a suite of AI-assisted tools for efficient campaign compliance management and contract-free compliance reporting. Its flexible pricing structure is tailored to your campaign’s fundraising efforts, ensuring that you only pay according to the size of your campaign. ISPolitical is a reliable and user-friendly solution, making it a great choice for managing your campaign’s compliance needs.

NGP

NGP Van is a Democratic campaign software with a focus on compliance. The software assists in filing over 80 different compliance reports at the state and federal levels, and incorporates features such as audit trails and user permissions to ensure accountability in campaign finances.

Quickbooks

You may be surprised to learn that the small business accounting software is a great option for campaign finances and compliance. However, Quickbooks has evolved to sync with a number of apps that can help keep you in compliance. 

Financial Compliance FAQs

What is the most important element of a financial compliance program?

To have a successful financial compliance program, accurate record-keeping is essential. This means keeping track of every transaction in and out of your campaign. By having the required documentation, you can manage compliance in an organized and efficient manner.

Who is typically on a compliance team?

A financial compliance team is going to include a mixture of people who are involved with the finances of a campaign, such as the—

• Candidate
• Campaign treasurer
• Accountant (often a volunteer)
• Compliance firm
• Consulting attorney

The department will be managed by the campaign treasurer and compliance firm, with oversight from the campaign manager as needed, particularly around reporting deadlines.

How much compliance is too much?

As Jonathan Brill recently shared with us, “the biggest surprise for first time candidates is how much time goes into an election regardless of the size of the race.” Campaign compliance should be a top priority for every candidate, but it shouldn’t overshadow campaigning efforts. At the start of your campaign, it will take more time to bring on the right compliance team and establish an appropriate routine. However, once these basics are set into place, you’ll be able to take a step back— at least until compliance reports are due! 

How much do compliance firms charge?

Compliance firms are relatively new to the world of campaigning, but becoming increasingly popular for candidates aware of the time and effort that go into maintaining regulatory compliance. 

If you decide to work with a compliance firm, you should anticipate paying anywhere from a few hundred to thousands of dollars per month. Typically, the cost is tied to the amount you are raising and the complexity of the state you are in.

Services will vary from firm to firm, but these compliance experts will typically help campaigns to—

• establish and maintain payroll for campaign staff.
• maintain accurate records for fundraising and general finances. 
• provide guidance for compliance laws at every level.
• create and file campaign finance reports to the appropriate regulatory agencies.

Ready to raise more money and stay in compliance?

In his interview with Numero, Brill also pointed out that wise candidates understand where PR and compliance meet. The question isn’t are you going to stay in compliance? but how will you stay in compliance with as little effort as possible?

Numero works with many popular compliance software including ISP and NGP to help you raise more money with less effort, all while following the laws that regulate your political campaign. 

To learn how Numero can help support your fundraising efforts, contact us with questions or to get pricing.