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Understanding Political Giving

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Understanding Political Giving PARADIGM POLITICAL & PHILANTHROPIC MANAGEMENT This publication provides guidance on certain aspects of federal campaign finance law. Use this guide in conjunction with the FEC and local and state regulations. Understanding 1 1 Political Giving NOT ALL POLITICAL DOLLARS ARE EQUAL 2020 1 SOFT VS. HARD CONTRIBUTIONS You will hear the various terms of “soft” and “hard” dollars used in the campaigns world that reference the varying levels of campaign finance rules and limitations. In short, “Hard” contributions are limited, direct contributions to a candidate or committee. “Soft” contributions do not have restrictions on the aggregate amount that one can donate or sometimes, the source of the contribution. All federal campaigns and committees (campaigns for US House, Senate, President and the national parties) are subject to various “Hard” contribution limits as determined by the Federal Election Commission (FEC, see federal contribution section below). “Soft” contributions are common for state and local party committees and for many state level offices. Soft contributions are also found at state and national issue advocacy organizations (501(c)4s), SuperPACs and 527s. SO, WHAT ARE THE LIMITS? FEDERAL CONTRIBUTION LIMITS All candidates for federal office are subject to campaign contributions regulated by the Federal Election Commission (FEC). These limits are a result of the McCain-Feingold campaign finance law enacted in 2002. These limits are adjusted with inflation every two years by the FEC. Although the 2010 McCutchen Supreme Court decision removed the aggregate cap, these limits of the max contribution to the campaigns and committees still exist. The limits are listed in the following pages for candidates for US House and US Senate, the national parties, political action committees (PACs) and federal account of state parties (that work to elect in state members of Congress). 2 This publication provides guidance on certain aspects of federal campaign finance law. For the most updated and current information, reference the FEC and local, state regulations directly. FEC CONTRIBUTION LIMITS FOR 2019-20 FEDERAL ELECTIONS *– Indexed for inflation in odd-numbered years. 1. “PAC” here refers to a committee that makes contributions to other federal political committees. Independent-expenditure only political committees (sometimes called “super PACs”) may accept unlimited contributions, including from corporations and labor organizations. 2. The limits in this column apply to a national party committee’s accounts for: (i) the presidential nominating convention; (ii) election recounts and contests and other legal proceedings; and (iii) national party headquarters buildings. A party’s national committee, Senate campaign committee and House campaign committee are each considered separate national party committees with separate limits. Only a national party committee, not the parties’ national congressional campaign committees, may have an account for the presidential nominating convention. 3. Additionally, a national party committee and its Senatorial campaign committee may contribute up to $49,600 combined per campaign to each Senate candidate. This publication provides guidance on certain aspects of federal campaign finance law. This publication is not intended to replace the law or to change its meaning, nor does this publication create or confer any rights for or on any person or bind the Federal Election Commission (Commission) or the public. The reader is encouraged also to consult the Federal Election Campaign Act of 1971, as amended, Commission regulations, Commission advisory opinions, and applicable court decisions. SOURCE: Federal Election Commission. Contribution Limits for 2019-20. FEC.gov https://www.fec.gov/ 3 resources/cms-content/documents/contribution_limits_chart_2019-2020.pdf (Feb.2019) STATE CONTRIBUTION LIMITS There are just twelve states that do not impose contribution limits on individual donors: WA ND MT MN ME SD ID WI VT Alabama, Indiana, Iowa, Mississippi, OR MI NH WY NY MA NE IA RI CT PA Missouri, Nebraska, NJ IN OH IL UT CO DE NV WV MD KS DC WASHINGTON, D.C. North Dakota, Oregon, Pennsylvania, MO VA KY CA Texas, Utah, and Virginia. TN NC OK AR AR NM SC MS AL GA TX LA CA FL The other 38 states restrict the amount of money that any one individual can contribute to a state campaign; however, these regulations that vary widely state to state and the limits are typically dependent upon the office the candidate seeks For example, Connecticut restricts individual spending to $1,000 for a candidate in a state Senate race and $250 for a candidate for a state house seat. LOCAL AND MUNICIPAL LIMITS All local offices and municipal offices are regulated by state regulation or any superseding local law. For example, all candidates for state representative, state senate, mayor, school board, etc. are subject to state or local limits. These limits and the disclosure vary widely according to the states. 4 The other 38 states restrict the amount of money that any one individual can contribute to a state campaign; however, these regulations that vary widely state to state and the limits are typically dependent upon the office the candidate seeks For example, Connecticut restricts individual spending to $1,000 for a candidate in a state Senate race and $250 for a candidate for a state house seat. 5 5 GLOSSARY 5 PAC, DSCC, DCCC, DGA, C3, C4, 527, SUPERPACS This is the alphabet soup of entities and acronyms in campaign finance. Additionally, political campaigns committees, independent expenditures, advocacy organizations, ballot initiatives or even non-partisan educational or civic engagement efforts vary in their ability to have a political impact. The definitions below will explain this further. PAC Political Action Committee (PAC) is a popular term for a political committee organized for raising and spending money to elect and defeat candidates. Most PACs represent business, labor or ideological interests. PACs can give $5,000 to a candidate committee per election (primary, general or special). They can also give up to $15,000 annually to any national party committee, and $5,000 annually to any other PAC. PACs may receive up to $5,000 from any one individual, PAC or party committee per calendar year. A PAC must register with the FEC within 10 days of its formation, providing name and address for the PAC, its treasurer and any connected organizations. PACs also disclose all their receipts (contributions) and expenditures (spending) to the FEC at regular intervals. SUPER A Super PAC is a political action committee that can raise and spend unlimited PAC amounts from individuals, corporations, and labor unions as they stay independent from that candidate. Unlike traditional 527 groups, can call for the election or defeat of specific candidates Super PACs, known officially as “independent expenditure-only committees,” were first created in the 2010 campaign cycle in the wake of a pair of Supreme Court decisions, including the Citizens United case. Super PACs are required to disclose their contributors and spending activity in regular filings. They cannot not make contributions to candidates, parties or other political committees. 6 SuperPACs are limited in their coordination with candidates or parties. SUPER The three most prominent Super PACs that provide independent PAC expenditures for federal electoral races are Priorities USA, Senate (cont.) Majority PAC and House Majority PAC. Because coordination is limited between campaigns and Super PACs, these are the three major players that are run by former senior House, Senate, Presidential staff. These political action committees are established by individual LEADERSHIP P A C politicians or aspiring candidates, allowing them to raise and spend money separate from an actual campaign account. Funds raised in a leadership PAC can be used to pay for various political expenses such as travel, polling, staff, and campaign contributions to state and local politicians across the country. They used to be reserved for leadership but now are very commons with almost all federal members to supplement their political operation, elevate their profiles and help their colleagues. The funds are usually spent to cultivate relationships and curry favor with local power-brokers and activists with an eventual White House bid in mind. Leadership PAC funds cannot be spent directly on sponsoring a politician’s own presidential campaign activity and cannot be transferred later to a campaign account (beyond a $5,000 contribution limit). 7 LEADERSHIP Individual donors may contribute up to $5,000 per calendar year PAC to a leadership PAC (or to any other political action committee). (cont.) In turn, a leadership PAC may contribute up to $5,000 per year to an unlimited number of candidates and up to $15,000 a year to the national party. Leadership PACs were originally used primarily by members of the congressional leadership or those seeking leadership positions, but they are much more widely used today. E.G. Kirsten Gillibrand’s Off the Sidelines and Tim Kaine’s Common Ground Simply, this is the primary campaign account for a candidate CANDIDATE COMMITTEE running for municipal, state or federal office. Contributions made to a candidate are regulated by the corresponding state or federal regulations. Most are required to disclose all contributions and expenditures but the availability of this information varied widely. All 2020 candidates will have one of these. E.G. Joe Biden for President and Amy McGrath
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