Show Me The Money, Part 1: A Campaign Compliance Guide
Campaign finance law is a big, complicated, and sometimes scary part of running for office or running a political organization. In this two-part series, we will go over some basics to help you stay out of trouble with campaign finance law. Part 1 will focus on what candidates need to know about reporting, campaign contribution limits, and more. Part 2 will go over the rules applicable for organizations like PACs, 501(c)(3)s, and (c)(4)s.
Candidates: Hire a treasurer
If you’re a candidate or considering running for office, you’re likely thinking about serving your community, excited about the prospect of talking to voters, pushing your solutions, and making a real difference. You might be worried about your opposition: what will they say, will it be fair, and how you’ll handle their attacks.
But there is something way scarier than your opponent to deal with first, the law. So before you worry about your opposition, you should make sure your finances are legally and ethically compliant (in other words, make sure you stay out of jail and avoid hefty fines for violating the law).
Like it or not, there’s a lot of money in politics. Staying compliant with the law can be especially tricky for newcomers who don’t know all the rules. Candidates often get into this work to help their community and make a positive impact, not realizing compliance is a big part of campaign management.
Disclaimer: we always recommend you contact a professional treasurer — they can help you navigate the complex world of campaign finance law. However, it’s important you understand the basics.
Who makes the rules?
Because states are given almost complete control over their elections and how they are run, most campaign finance rules are dictated at the state level rather than by the federal government. From there, local municipalities have the right to make laws that affect only their jurisdictions.
For example, in 2023 in California, the state-wide law says that candidates cannot accept more than $5,500 from an individual donor per election. However, if a candidate is running in Riverside County, they can accept a $20,000 contribution! And if a candidate is running in the City of San Diego, they cannot accept more than $750 per election. That’s because Riverside County and City of San Diego made laws that affect their jurisdiction only. Cities and counties can either make their own rules or simply defer to state law.
Moral of the story: if you’re running for something other than a state or federal race, always check the rules of the municipality in which you’re running for office. If they don’t have rules for your city or county, that likely means they’re playing by state-wide rules, but it is always worth it to ask the city or county clerk for confirmation if you’re unsure.
Disclosing campaign contributions: how and when?
The first step to compliance is making sure your contributions are disclosed properly.
When you file to run for office, your committee will be added to the public database where — eventually — all contributions (both the amount given, and who gave it to you) and expenditures (how much, and where you spent it) will be published and made available to anyone who wants to see it. This promotes transparency, and theoretically allows voters to make informed decisions about you and your campaign based on where your money comes from.
When collecting contributions over a certain amount (again, check your local rules!), there is specific information you must get from every donor: their first and last name, address including their city, state, and zip code, as well as their occupation and employer. This is a good rule of thumb, however the requirements can differ depending on where you’re running. For example, in some states, if a donation is less than $1,000 the donor’s name doesn’t need to be included, whereas in others anything over $99 must have all the donor’s information.
All contributions are documented by the campaign treasurer and sent to the city, county, or state entity in charge of the election where you’re running. These are called reports. Reporting deadlines vary depending on state and federal guidelines and where you’re at in the campaign cycle: most states require them to be done electronically, and have at least three reporting periods: end of year, just before the election, and right after the election. Some require bi-annual reports and many require quarterly or monthly reports during the height of a campaign. The idea is to keep campaigns honest, while keeping voters informed about where their dollars are coming from.
Bottom line: do your paperwork, listen to your treasurer, and make sure you communicate every single contribution and expenditure with the treasurer and their team. They can only report what they know. And if any contribution or expenditure is not reported, it is considered a violation of the law, which you and your team could be liable for
Disclosures on Public Facing Materials
You know that “Paid for by…” line you see on political mail, ads, and text messages? It’s not just window dressing, it’s required. And it’s an easy way to get fined if you forget to include it on your materials.
At the risk of sounding like a broken record, every state has different rules on what information needs to be disclosed on public-facing promotional materials for your campaign.
In California, the Fair Political Practices Commission (FPPC) regulates and enforces the campaign finance laws (among other things). Every campaign in California must register with the state to receive an FPPC number, and campaigns must include “Paid for by — committee name — (FPPC #)” on almost every piece of campaign material that goes out to the public. The idea is this ensures voters can look up the financial interests of each campaign and who paid for which materials. It’s another tool that encourages the public’s ability to track where dollars are coming from.
Did we mention you should hire a treasurer?
This process can be complicated and scary, especially for first-time candidates. We encourage you to hire a professional treasurer, regardless of the size of your campaign.
And no, the friend who is an attorney or an accountant won’t cut it — campaign finance law is nothing to mess around with. If you think hiring a political treasurer is expensive, wait until you’re fined for making preventable mistakes, or even worse, face jail time for it.
You also have to remember that opponents can and will use your mistakes against you in the public eye. Missing a reporting deadline or filing incorrectly can be painted as carelessness, lack of attention to detail, or even a character flaw — real consequences that could hurt your image in the eyes of voters.
Check out Part Two of this series, where we go over compliance rules for organizations like PACs, 501(c)(3)s, and (c)(4)s.
Ready for advice for your campaign? Reach out for a free consultation today.
Written by Colin Scharff and Ashleigh Padilla Goins from the Evinco Strategies Policy Department.
Sources: