Eleanor Finch
Political campaigns are costly affairs, with candidates collecting millions of dollars in contributions. While there are rules dictating how money can be spent after a campaign ends, there are also rules about who can contribute and how much. For example, corporations and labour organisations are prohibited from making contributions. However, there are ways to get around this, such as through the sale of campaign assets, including mailing lists, equipment, supplies, and fundraising items. In recent years, selling merchandise has become an essential part of a campaign's fundraising and marketing strategy, with grassroots fundraising and low-dollar amount donations on the rise.
| Characteristics | Values |
|---|---|
| Can campaigns sell their property? | Yes, but the purchase is considered a contribution to the campaign by the purchaser. The payment must not come from prohibited sources and must not exceed the contribution limits. |
| What are prohibited sources? | Corporations, including nonprofit corporations (although funds from a corporate separate segregated fund are permissible), and labor organizations (although funds from a separate segregated fund are permissible). |
| What are contribution limits? | A candidate’s authorized committees may accept a contribution of up to $2,000 per election from the authorized committee of another federal candidate. |
| Are there other contribution limits? | Yes, an individual can contribute $6,600 to a federal candidate—once during the primary and another time during the presidential campaign. |
| What happens to contributions if a candidate drops out or loses the primary? | Contributions must be refunded to individual donors within 60 days or the candidate can redistribute them with the contributor's permission. |
| What happens to leftover campaign funds? | There are rules in place that dictate how money can be spent after a campaign concludes. Permitted uses include charitable donations, donations to other candidates, and saving it for a future campaign; personal use is prohibited. |
| Can campaigns sell merchandise? | Yes, selling merchandise is an essential part of a political campaign's fundraising and marketing strategy. |
| What kind of merchandise can campaigns sell? | Campaigns can sell branded items such as t-shirts, sweatshirts, and tote bags. |
| Can campaigns sell mailing lists? | Yes, mailing lists can be sold or exchanged at the "usual and normal" charge without the purchaser making a contribution. |
| Can 501(c)(3) organizations participate in political campaigns? | No, they are prohibited from directly or indirectly participating, contributing, or intervening in any political campaign. |
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What You'll Learn
Selling merchandise as a marketing and fundraising strategy
Selling merchandise is a creative and effective marketing and fundraising strategy for political campaigns. It is a strategy that has been used for years to help nonprofits and individuals raise additional funds. It is a lucrative way of fundraising that resonates with a contemporary audience.
Firstly, merchandise is a cost-effective marketing tool that can help spread awareness of your campaign. Unlike paid ads, which stop once funding ceases, merchandise continues to promote your campaign as long as people are using it. This means that satisfied supporters who wear or use your merchandise act as personal endorsers, organically recommending your campaign to others. Merchandise can also be multipurpose and support various campaigns, serving dual purposes such as fundraising and awareness-raising.
Secondly, selling merchandise is a great way to raise funds for your campaign. It diversifies donor contribution options, allowing supporters to make a charitable donation to your campaign and, in return, receive a new custom t-shirt, sweatshirt, or any other type of apparel. It is important to note that the Federal Election Commission (FEC) considers the sale of campaign assets as a contribution to the campaign by the purchaser. Therefore, the payment must not come from prohibited sources and must not exceed the contribution limits.
Thirdly, selling merchandise helps to build and foster a sense of community among participants and supporters. It also helps to strengthen relationships with supporters and potential donors. This sense of community is enhanced when supporters wear or use the merchandise and organically promote the campaign to others.
Finally, selling merchandise can help to improve donor satisfaction. When people order merchandise online, they receive a dose of dopamine, a neurotransmitter that makes them feel excited in anticipation. Therefore, selling branded merchandise online not only makes supporters feel good about their contribution but also excites them when they receive the merchandise.
To effectively sell merchandise for your political campaign, it is important to align the merchandise with the campaign's mission, values, and the interests of the supporters. It is also beneficial to incorporate the campaign's logo, messaging, event taglines, and sponsors into the design of the merchandise. Additionally, offering participants the option to personalize their merchandise can make the strategy more successful.
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Rules for selling campaign assets
When a campaign purchases an asset, this is generally considered a contribution to the campaign by the purchaser. Therefore, the payment must not come from prohibited sources and must not exceed the contribution limits. Campaigns are prohibited from accepting contributions from certain types of organizations and individuals, including corporations, labour organizations, and national banks.
There are, however, some exceptions to this rule. The sale of campaign equipment and supplies does not result in a contribution under certain conditions. For example, mailing lists developed by a campaign for its own use may be sold or exchanged at the "usual and normal" charge without the purchaser making a contribution.
Additionally, the sale of fundraising items or materials developed uniquely for the committee, such as artwork, publications, and opinion polls, results in contributions from the purchasers. It is important to note that campaigns are prohibited from retaining contributions that exceed the limits, and they must follow special procedures for handling such funds.
Furthermore, the date of the contribution is crucial, as it determines whether certain rules will apply. The date of receipt, which is the date the campaign or a person acting on its behalf receives the contribution, is also important as it governs whether the contribution is acceptable under the rules. All contributions must be deposited within 10 days, although the date of deposit is not used for reporting or contribution limit purposes.
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Who can and can't contribute to a political campaign
Political campaigns can receive funds from individuals, political party committees, and political action committees (PACs). PACs are committees that make contributions to other federal political committees. They can be established by corporations, labour organisations, incorporated membership organisations, trade associations, and national banks. However, it is important to note that campaigns are prohibited from accepting contributions from certain types of organisations and individuals. For example, they cannot accept funds from federal government contractors, foreign nationals, or the treasury funds of corporations, labour organisations, or national banks.
Campaigns may also receive contributions from trusts, but certain conditions must be met. The committee must disclose the name of the trust and the name of the decedent in its report. Additionally, contributions from unregistered organisations are allowed under certain circumstances. For instance, the funds must come from permissible sources, and the nonfederal committee making the contribution may need to register with the Federal Election Commission (FEC) as a federal political committee.
Furthermore, candidates can use their personal funds for campaign purposes without any limits. They can also create political action committees, known as leadership PACs, which are separate from their official campaign committees and are often used to contribute funds to political allies.
It is worth noting that there are additional restrictions on political activity for charities under the provisions of the Internal Revenue Code. Additionally, 501(c)(3) organisations are prohibited from participating in any political campaign activity on behalf of or in opposition to any candidate for elective public office. Violating this prohibition may result in the denial or revocation of tax-exempt status and the imposition of excise taxes. Certain non-partisan activities, such as voter registration drives and voter education activities, are permitted.
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What happens to campaign contributions after elections
In the United States, the Federal Election Commission (FEC) enforces the Federal Election Campaign Act of 1971 (FECA), which limits the amount of money individuals and political organisations can give to a candidate running for federal office. The FEC also sets campaign contribution limits for individuals and groups.
Campaign funds are subject to limits and rules, and the date a contribution is received determines whether the rule will apply. Campaigns are prohibited from retaining contributions that exceed the limits, and if they receive excessive contributions, they must follow special procedures for handling such funds.
After an election, any leftover campaign funds must be used to pay off debts. Candidates are not allowed to keep any campaign funds for themselves, and contributions must be used to pay for related expenses. They are not intended for personal use.
Campaign funds given for a general election during a primary must be refunded if the candidate does not make it past the primary election. This refund must be made within 60 days. Donors can also give permission for the candidate to redirect the funds elsewhere. Candidates may also choose to refund contributions for moral or ethical reasons, or if a donor has exceeded the maximum allowable contribution.
Super PACs have fewer restrictions on what they can do with leftover funds, and while they are not required to, they often return them after winding down costs. There are no regulations on how a super PAC uses funds after a candidate drops out or an election is over. They can continue to use the money to support the same or another federal candidate in future elections, or donate it to other organisations aligned with their political cause.
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How to report PACs and other political committee contributions
Political Action Committees (PACs) are political committees that can receive contributions from individuals, corporations, and other committees. They are required to disclose these contributions, including the date and amount of receipt, to the Federal Election Commission (FEC) for reporting and compliance purposes.
- Identify the Type of PAC: There are different types of PACs, including separate segregated funds (SSFs), nonconnected committees, Super PACs, and hybrid PACs. SSFs are connected to corporations, unions, or associations, while nonconnected committees are independent. Super PACs can accept unlimited contributions, and hybrid PACs maintain separate accounts for contributions and independent expenditures. Leadership PACs are established by political leaders to support various candidates and are a type of multi-candidate PAC.
- Determine the Reporting Form: PAC contributions to federal campaigns are reported to the FEC. House and Senate committees use Form 3, Line 11(c) to report contributions from other political committees, including PACs. These contributions are itemized on Schedule A, regardless of the amount.
- Disclose the Required Information: When itemizing a contribution from a PAC or political committee, the receiving committee must disclose specific details. This includes the PAC's name, mailing address, date of receipt, amount of receipt, election designation ("primary," "general," or "other"), and the aggregate election cycle-to-date total for the contributor. The FEC identification number of the PAC may also be included.
- Follow Designation Guidelines: The FEC recommends that campaigns encourage contributors to designate their contributions for specific elections. Written designations ensure the contributor's intent is clear and help maintain consistency in reporting. Designated contributions count against the donor's limit for that specific election, while undesignated contributions count against the donor's limit for the next election.
- Note the Date of Receipt: The date of receipt is crucial for reporting and compliance purposes. It is the date the campaign or its representative receives the contribution. For electronic contributions, it is the date of the committee's authorization of the transaction. The treasurer should maintain records, including batch numbers or other identifying information.
- Understand Contribution Limits: It is important to be aware of contribution limits for PACs and political committees. While Super PACs can accept unlimited contributions, other PACs and committees have limits. A campaign must follow special procedures if it receives contributions exceeding these limits.
- Sale of Campaign Assets: When a campaign sells its property, the purchase is generally considered a contribution by the buyer. The payment must not exceed contribution limits and must not come from prohibited sources. However, there are exceptions, such as the sale of mailing lists, campaign equipment, or fundraising items developed uniquely for the committee, which may not be considered contributions.
By following these steps, PACs and political committees can ensure they accurately report contributions received and comply with FEC regulations. Accurate reporting helps maintain transparency and compliance with campaign finance laws.
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Frequently asked questions
Yes, you can sell your products to a political campaign. It is a good way to raise funds for the campaign. However, the campaign is prohibited from accepting contributions from certain types of organizations and individuals, including corporations and labor organizations.
The Federal Election Commission has rules in place to control how money is spent by candidate campaign committees. The committees are run by the candidate and their campaign team. The contributions they receive can be used for charitable donations, donations to other candidates, and saving it for a future campaign. Personal use is prohibited.
Selling to a political campaign can be a great way to get your product into the hands of influential people and promote your business. It can also be a way to show your support for a particular candidate or cause.
Yes, the campaign must ensure that the purchase is not considered a contribution to the campaign by the purchaser. The payment must not come from prohibited sources and must not exceed the contribution limits.
You can set up a free online store on a law-compliant platform like Bonfire, which will ensure Federal Election Campaign Act compliance. You can sell branded merchandise such as t-shirts, sweatshirts, and tote bags to your supporters.
