Jun 24 2011
Advocacy is an important initiative for many associations today, and many 501 (c) 6 organizations have whirlwind romances with their Political Action Committees (PAC)–finding love in funding advocacy initiatives for issues that advance their profession or cause. However, given the complex and confusing legal requirements for operating a PAC, it is definitely worth the investment of time and money to regularly meet with your accountant and your attorney to ensure that you are in compliance with all of the many laws and regulations that can impact the way that PAC fundraising is conducted.
Many organizations fail to recognize that, if they operate an “affiliated” federal PAC, (the PAC is not independent of the organization), they may only be allowed to solicit and receive contributions from their members (not non-members). Further, PACs like these may only be allowed to solicit and receive contributions from individuals, not corporations. And, with this type of PAC, an organization may not be able to use ANY portion of its members’ dues to fund the PAC.
There are also many PAC solicitation disclosures required by the Federal Election Commission (FEC) and the Internal Revenue Service (IRS). For example, donors (and potential donors) must be informed that contributions will be used for political purposes—and that they have the right to refuse to donate without any fear of penalty or reprisal. Tax laws also dictate that potential donors be notified that their contribution is not tax deductible for charitable purposes.
Currently, according to the FEC, an affiliated federal PAC may only receive up to $5,000 per individual per year, separate bookkeeping records must be established for a PAC and it must be housed in a separate bank account.
If you are uncertain about the implications of a particular PAC fundraising endeavor, do yourself and your organization a favor and raise your hand, and raise the question—before your fundraiser!
Please note: The content above is disseminated for informational purposes only and should not be construed as legal advice. Contact your attorney for more information about operating a PAC.