COMMENTARY: Top-10 Things to Understand About Making Political Contributions

28 July 2020 2020 Election Resource Center Blog
Authors: Jason J. Kohout Erika E. Alba

1. It’s All Public!

All contributions to political candidates and independent expenditure political action committees are publicly disclosed. Some groups are “data-mining” this publicly available information. Disguising gifts is a criminal act and can (and has) resulted in jail time. Reporters and bloggers know how to use these databases.

2. But, Sometimes It’s Not All Public

Contributions to advocacy organizations such as 501(c)(4) (social welfare) and (c)(6) (business league) organizations are not publicly disclosed, unless the organization spends the money for political activity in such as California and New Jersey, which require disclosure (other states and localities have started efforts to join the list). Donors need to be careful not to step on landmines.

3. Business Contributions

There are significant limitations on businesses making contributions to candidates, including an outright ban on corporate contributions in federal elections and in some states such as New Jersey.

4. Doing Business Restrictions

Before giving to a state or local candidate, owners of closely held businesses should review whether they are subject to limitations on contributions because their businesses have contracts (or would like to have contracts) with the state or locality.

5. It’s Limited

Despite all of the big talk of big donors, most campaign cash comes in small numbers. A donor can contribute a maximum of $2,800 to a federal candidate per election (the Primary and a General Election are separate elections; each spouse or family member has their own limit). Certain types of contributions, called “independent expenditures” are unlimited; but they must be truly “independent” and not coordinated with a candidate. Individuals have been sent to jail for violating that rule.

6. It’s Limited Based on Jurisdiction

Is that a federal or state or local candidate? For federal candidates (president, house, senate) the maximum allowed its $2,800. For other candidates it all depends on the jurisdiction and every state has its own limits.

7. Raising Dollars

Politicians have to raise significant dollars. But, a candidate is limited. Instead, the candidate must rely on individuals who can fundraise from their friends/acquaintances/employees. This may mean hosting a fundraiser. Two caveats: an employer can’t reimburse an employer for making a contribution (“I’ll raise your salary $2,800 if you come to my fundraiser” or “go ahead and expense the amount of the contribution”). Also, there are strict rules about using corporate assets (including meeting rooms and stationery) for fundraisers and candidate events.

8. Be Strategic

Give first — dollars early in the cycle are worth three times as much as dollars at the end of a campaign. Campaigns need “venture capital” to get started, and if flush with cash, campaigns can lock in TV advertising early at lower rates; later in the campaign it becomes expensive. Candidates are generally more appreciative of early donors.

9. All Politics is Local so Give Local

Give to the lower state house, the caucuses and the AG — you get more “bang for the buck” and those elected officials are likely to remember your name.

10. Build Relationships Before You Need Them

Make sure that the elected official knows your business or family and the impact you make on your community. Take the time to educate them on the issues critical to you. Your involvement with a trade association or chamber of commerce with an affiliated political action committee can be very helpful in moving policy after the election.

This article was originally published in the Wisconsin Law Journal.

This blog is made available by Foley & Lardner LLP (“Foley” or “the Firm”) for informational purposes only. It is not meant to convey the Firm’s legal position on behalf of any client, nor is it intended to convey specific legal advice. Any opinions expressed in this article do not necessarily reflect the views of Foley & Lardner LLP, its partners, or its clients. Accordingly, do not act upon this information without seeking counsel from a licensed attorney. This blog is not intended to create, and receipt of it does not constitute, an attorney-client relationship. Communicating with Foley through this website by email, blog post, or otherwise, does not create an attorney-client relationship for any legal matter. Therefore, any communication or material you transmit to Foley through this blog, whether by email, blog post or any other manner, will not be treated as confidential or proprietary. The information on this blog is published “AS IS” and is not guaranteed to be complete, accurate, and or up-to-date. Foley makes no representations or warranties of any kind, express or implied, as to the operation or content of the site. Foley expressly disclaims all other guarantees, warranties, conditions and representations of any kind, either express or implied, whether arising under any statute, law, commercial use or otherwise, including implied warranties of merchantability, fitness for a particular purpose, title and non-infringement. In no event shall Foley or any of its partners, officers, employees, agents or affiliates be liable, directly or indirectly, under any theory of law (contract, tort, negligence or otherwise), to you or anyone else, for any claims, losses or damages, direct, indirect special, incidental, punitive or consequential, resulting from or occasioned by the creation, use of or reliance on this site (including information and other content) or any third party websites or the information, resources or material accessed through any such websites. In some jurisdictions, the contents of this blog may be considered Attorney Advertising. If applicable, please note that prior results do not guarantee a similar outcome. Photographs are for dramatization purposes only and may include models. Likenesses do not necessarily imply current client, partnership or employee status.