Joint fundraising with other candidates and political committees
Joint fundraising is election-related fundraising conducted jointly by a political committee and one or more other political committees or unregistered organizations.
The rules described apply to political committees and unregistered organizations engaged in joint fundraising. Please note that nothing in these rules supersedes the fundraising restrictions of 11 CFR Part 300.
Joint fundraising basics
All participants in a joint fundraising effort, including unregistered organizations, must:
- Create or select a federal political committee to act as the joint fundraising representative;
- Agree to a formula for allocating proceeds and expenses;
- Enter into a written agreement naming the joint fundraising representative and stating the allocation formula;
- Establish a separate account for joint fundraising receipts and disbursements;
- Notify the public of the allocation formula and certain other information when soliciting contributions;
- Screen contributions to make sure they comply with the limits and prohibitions of the Federal Election Campaign Act (the Act); and
- Report allocated proceeds and expenses (applies to political committees only).
The committee named as the fundraising representative has additional responsibilities.
Levin fundraising (party committees only)
State and local party committees may not raise Levin funds through joint fundraising activity with any other state or local party committee. This prohibition applies to committees in different states as well. However, state and local party committees may jointly raise funds which are not used for Federal Election Activity (FEA).
In addition, national party committees may not participate in any joint fundraiser where nonfederal or Levin funds are raised.
Joint fundraising representative
Joint fundraising participants must either establish a new political committee (using a Statement of Organization (Form 1)) or select a participating political committee to act as the joint fundraising representative. (It is strongly recommended for ease of compliance with the law that participants establish a new political committee.)
This committee is responsible for:
- Collecting and depositing joint fundraising contributions;
- Paying expenses;
- Allocating proceeds and expenses to each participant;
- Keeping records; and
- Reporting overall joint fundraising activity.
Registering and naming the joint fundraising representative
A new political committee established for the joint fundraiser must register with the FEC using Form 1, and must include the name of each participating federal candidate in the new committee’s name. (An existing committee would be required to amend its Form 1.) Thus, for example, a joint fundraising committee established to raise funds for a candidate and a party could not be called "State Victory Fund," but might be called "John Doe State Victory Fund." Any federal candidate participating in the fundraiser must designate the fundraising representative as an authorized committee (by amending the Statement of Candidacy (Form 2)).
Collecting and forwarding contributions
If a new committee is established, it collects all the contributions. Note that a new committee may not itself be a participant in any other joint fundraising effort, though it may conduct more than one event or activity on behalf of its own participants. Alternatively, if a participating committee acts as a fundraising representative, the other participants may also collect contributions, but they must forward them to the fundraising representative within 10 days of receipt.
Commercial firm
Although participants may hire a commercial fundraising firm or other type of agent to assist the joint fundraiser, they are still required to establish or select a fundraising representative.
Allocation and written agreement
Before conducting a joint fundraiser, all participants must enter into a written agreement that identifies the fundraising representative and states the allocation formula—the percentages or amounts used to allocate the joint fundraising proceeds and expenses among participants. The joint fundraising representative must retain a copy of the written agreement for three years and make it available to the FEC upon request.
Separate depository account
Joint fundraising participants must establish a separate account for the receipt and disbursement of all joint fundraising proceeds. Each participating political committee must amend its Form 1 to show the account as an additional depository.
Depositing contributions
The fundraising representative must deposit contributions into the account within 10 days after receiving them. Only contributions permissible under the Act may be deposited in the joint fundraising account. If any participant is an unregistered organization which may, under state law, accept prohibited contributions, the participants may either establish a second account for such contributions or forward them directly to the participants that may accept them.
Start-up costs
Participants may advance funds to the joint fundraising representative for start-up costs of the fundraiser. The amount advanced by a participant should be in proportion to the agreed upon allocation formula. Any amount advanced exceeding a participant’s proportionate share is considered a contribution and must not exceed the amount the participant may contribute to the other participants. (However, an exception is made for funds transferred between party committees.)
Unregistered organizations
An unregistered organization (such as a party organization that has not yet qualified as a political committee) must use funds that are permissible under the Act when advancing money for start-up costs. If an unregistered participant advances more than its share of start-up costs and thus makes a contribution, the contributed amount may trigger registration and reporting requirements under the Act.
Joint fundraising notice
In addition to any fundraising or disclaimer notices required, participants or the joint fundraising committee must include a joint fundraising notice with every solicitation for contributions. The notice must contain the following information:
- The names of all participants, regardless of whether they are registered political committees or unregistered organizations;
- The allocation formula (the amount or percentage of each contribution that will be allocated to each participant);
- A statement informing contributors that they may designate contributions for a particular participant (notwithstanding the allocation formula); and
- A statement that the allocation formula may change if any contributor makes a contribution which would exceed the amount they may lawfully give to any participant.
In two situations, participants must include additional information in the joint fundraising notice:
- If a participant is engaging in the joint fundraiser to pay off outstanding debts, the notice must state that the allocation formula may change if the participant receives enough funds to pay its debts.
- If, under state law, any unregistered participant is permitted to receive contributions prohibited under the Act, the notice must say that such contributions will be given only to participants that may legally accept them.
Screening contributions and recordkeeping
Screening contributions
The fundraising representative and participants must screen all contributions to make sure they are neither prohibited by the Act nor in excess of the Act's contribution limits. The maximum a contributor may give to a joint fundraiser is the total amount they may contribute to all participants without exceeding any limits (less any amounts that the contributor has otherwise contributed to any of the participants).
Example
For example, in a joint fundraiser between three state party committees, an individual would be permitted to contribute $30,000 per year—$10,000 to each committee)—if they hadn’t yet contributed to any of the participants.
To facilitate screening, participants must provide the joint fundraising representative with records of past contributions so that the representative may determine whether a donor has exceeded the contribution limits.
Recordkeeping
Receipts
With regard to gross proceeds, the fundraising representative must collect the required recordkeeping information and later forward it to the participating political committees. The date of receipt is the date the joint fundraising representative receives the contribution.
Prohibited contributions
The fundraising representative must also keep a record of the total amount of prohibited contributions received, if any, and of any transfers containing prohibited funds made to participants that may accept them.
Disbursements
The fundraising representative must retain records on all disbursements made for the joint fundraiser for three years. If a commercial fundraising firm or agent is used, it must forward required records on disbursements to the fundraising representative.
Paying expenses
In general, expenses must be paid before proceeds may be transferred to the participants. Thus, the fundraising representative may make payments for fundraising expenses from gross proceeds collected at the fundraiser (and from funds advanced by the participants). Nevertheless, it must allocate (but not transfer) gross proceeds among the participants. The transfer is not made until after the net proceeds are determined.
Step 1: Allocate gross proceeds
Generally, the fundraising representative must allocate gross proceeds according to the allocation formula. However, the formula may change if the allocation results in:
- An excessive contribution from a contributor to one of the participating committees; or
- A surplus for a participant raising money solely to pay off campaign debts.
Reallocation under these circumstances must be based on the other participants’ proportionate shares under the allocation formula. If reallocation results in a contributor exceeding the contribution limits for the remaining participants, the fundraising representative must return the excess amount to the contributor.
Designated contributions
Designated or earmarked contributions that exceed the contributor’s limit for a participant may not be reallocated without the prior written consent of the contributor.
Prohibited contributions
Prohibited contributions must be distributed only to the unregistered participants that may lawfully accept them; they do not have to be distributed according to the allocation formula.
Step 2: Allocating expenses
After gross proceeds are allocated, the joint fundraising representative must calculate each participant’s share of expenses based on its actual share of gross proceeds. (Prohibited contributions may be excluded from the gross proceeds when making this calculation.) This final allocation formula may differ from the original formula if receipts have to be reallocated.
Expenses for a series of fundraising events must be allocated on a per-event basis.
Step 3: Calculating net proceeds
The fundraising representative may delay transferring net proceeds to participants until after it receives all contributions and pays all expenses for the fundraiser. To determine net proceeds, the fundraising representative subtracts the participant’s share of expenses from its share of gross proceeds.
Example
Committees A, B and C raise $50,000 in gross proceeds and spend $10,000 in expenses, leaving $40,000 in net proceeds. The fundraising representative allocates $10,000 (20 percent) in gross proceeds to Committee A and $2,000 (20 percent) in expenses; Committee A’s net proceeds equal $8,000.
Reporting by joint fundraising representative
The fundraising representative must report all disbursements made for the joint fundraiser in the reporting period in which they are made. Transfers of net proceeds to the joint fundraising participants are reported as transfers to affiliated committees and itemized on a separate Schedule B for that category.
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Video: Joint Fundraising