Understanding Campaign Finance Laws

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Campaigns need to thoroughly know and understand the laws regarding campaign finance. Nothing can get a campaign into trouble like running afoul of campaign finance laws. The candidate, campaign treasurer, campaign manager, and anyone else who is helping with raising money or involved with spending money needs to know these rules.

Campaign finance laws differ in every jurisdiction. Even two candidates in the same state may have different sets of rules. For instance, a candidate for city council may adhere to the rules created by the city government, whereas a candidate for state legislature follows state laws.

Before we go any further, a general word of caution: consult your local board of elections for the applicable laws in your race.

Find a treasurer

Most campaigns are required to have a treasurer. This is the person who is officially responsible for the campaign’s money and who prepares and files the required campaign finance reports to disclose donors and spending. Your treasurer doesn’t necessarily need to be a bookkeeper or account, but the ideal pick will be someone who is detail oriented and very organized. They are going to need to track every dollar your campaign receives and every cent that the campaign spends.

Many places have requirements that a treasurer is a registered voter from your state who is not a candidate themselves for any office. They may or may not need to be registered to vote in the same city or county where you are running.

Typically all contributions need to pass through the hands of your treasurer, not the candidate. In some jurisdictions, the candidate may not be able to have access to the campaign bank account.

Open a campaign bank account

You’ll need to decide on a name for your political campaign. Some common names include “Friends of Sandra Johnson” or “Citizens for Jake Varshney.”

To open a bank account, you will likely need an Employer Identification Number, which can be obtained online from the IRS. You’ll need this identification number regardless of whether or not the campaign will employ anyone.

All campaign expenses should be paid from the campaign’s bank account. Local laws may include provisions to allow for reimbursement for expenses after the fact. Alternately, a purchase that is made on behalf of the campaign but not with campaign funds needs to be reported as an “in kind contribution.” For instance, if your neighbor hosts a meet and greet party at their house and spends $40 on coffee and cookies, that spending has to be disclosed on the campaign finance report.

Create your campaign committee

Part of the process for filing to get your name on the ballot will include officially creating your campaign committee. Depending on the jurisdiction, this could be a one or two step process.

  • In some places, you need to file all of your paperwork at one time, including forms and voter signatures to get on the ballot, as well as information about your campaign committee (name of the committee, what bank you’re using, and who is your treasurer).
  • In other places, you need to register your campaign committee before you can file to get on the ballot.
  • Some jurisdictions allow exploratory committees to spend up to a certain amount of money before registering as a committee.

Be aware that you may be required to file a financial disclosure statement that would identify any potential conflicts of interest.

Know the rules about contributions

Here’s a few key points to be aware of in your local code:

  • What is the individual donor limit? Is that per year or per election cycle?

  • Is there a limit on how much a candidate or their spouse can contribute?

  • What information do you need to track about your donors? Typical requirements include name, address, employer, occupation, contribution amount, contribution date.

  • Are you required to provide a receipt to each donor?

  • Are anonymous contributions allowed?

  • Is there a cap on cash donations? Many jurisdictions limit cash contributions to small amounts (i.e. $10 or $20).

Campaign finance reporting

Campaigns are required to periodically report the contributions they received and how they spent the money. The finance report deadlines will vary by jurisdiction.

As long as your campaign committee is still registered--even if you are no longer asking for money or spending it--you’ll need to keep filing reports. So if you aren’t running for office again, it’s a good idea to terminate your campaign committee.

Authorization line

One of the most important and publicly visible parts of your compliance with campaign finance laws is the authorization line that you have to include on all campaign materials. For instance, “Authorized by Monica Brown, Treasurer.” Your website, campaign literature, and even campaign social media accounts should include the authority line. It’s the way that the public can discern what messaging is a result of political spending.

Art made by freepik at falticon.com and Stella at creativemarket.com.
Modified from original by Brian Carr