What Nonprofits Need to Know about Donations to Political Campaigns
For the 2016 presidential election, more than $6 billion will be donated to political campaigns according to The Wire – and generally the side that raises the most money wins. Where does that money come from and where exactly does it go, however?
Political donation law limits the amount of money that one individual or corporation can donate to particular candidates, but there are a handful of outlets for additional donations (some even unlimited and anonymous). If you are thinking of supporting a politician or a specific platform cause this election cycle, make sure you know how the financing system works first and where your organization fits best within it.
Donation caps: How much can you give?
- Hard Money: The Federal Election Campaign Act (FECA) governs donations directly to campaigns, often termed “hard money”. This is the most useful donation you can make to elect a particular person. Under the law, individuals can donate up to $2,500 directly to a candidate per election (the primary and the general election are separate).
- Soft Money: That same individual can give up to $30,800 to a national party, $10,000 to state and local parties, and $5,000 to any political action committee (PAC). This “soft” money is what really funds campaigns, because it generally pays for the advertising that “educates” voters about campaign issues, other candidates, and the candidate herself. In the 2012 election, Republicans and Democrats both spent $1 billion in ads (7:1 negative) in swing states, which NPR reported was $1,000 per persuadable vote. If you give soft money for the 2016 election, you can bet it is going toward advertising in swing states.
Beyond Soft Money: Nonprofit and Advocacy Groups
To get around FECA regulations, which not only has caps on donation amounts but requires reporting on from where the donations came, campaigns seek donations via indirect channels. The Koch brothers, for example, recently announced their association of advocacy groups, nonprofits, PACs, and other advocacy vehicles will spend nearly $1 billion combined to get conservatives elected in 2016.
- Advocacy Groups: Tax code dictates that nonprofits cannot lobby or be focused on political action; hence advocacy groups fall into a different tax code. During important elections, they will side with a candidate because of his/her support of particular causes for which they advocate. For example, the Sierra Club is an advocacy group that will side with the candidate who best supports environmental health; if you donate to them, they will advocate for the candidate indirectly. The Sierra Club spent $1.6 million on federal political elections in 2014, with a 74% success rate of candidates winning their elections.
- Social Welfare Nonprofits: Falling under the same tax code as advocacy groups for “social welfare”, an individual can anonymously donate any amount to groups that advocate for the public good. These are basically disguised “Super PACs” that paid for hundreds of millions of ads in 2012, and most likely will do so again for 2016.
- Nonprofits: Though nonprofits cannot advocate for particular candidates, they are more than welcome to “educate” the public on particular issues and platforms in a “nonpartisan” way, which often translates to indirect support for particular candidates. For example, nonprofits will go out of their way during election cycles to focus program work on hot button topics. They often send email blasts to members showing different sides of the platform on important issues, in effect encouraging them to go out and vote for a particular candidate.
- Advocacy Group Nonprofit Arm: Another twist to be aware of is that nearly all 501(c)(4) advocacy groups have a 501(c)(3) nonprofit arm, for which they seek tax-deductible gifts that support their mission but are not directly related to elections or politics. For example, the National Rifle Association has a Foundation that raises millions of dollars to support organizations that promote hunting and education on fire arm use. It is “America’s leading charitable organization in the support of shooting sports”.
Best Sources for checking organizations and candidates
If you’re still mystified by the web of giving and spending in elections, the following resources are best bets to help clarify. Take a look and see where your group might show up if you support a political party, candidate or cause:
- The Center for Media and Democracy SourceWatch wiki gives a plethora of nonpartisan, pertinent information on what organizations do, with whom they are associated, and from where they get their funding.
- OpenSecrets.org is the largest database of federal campaign donation and lobbying analysis on the web.
- The Federal Election Commission allows you to download filings for all political candidates directly.
- VoteSmart.org provides basic information and education on terminology in regards to elections and campaigns, as well as detailed information on nearly all politicians in the US.
- The League of Women Voters might be the oldest platform for protecting and educating voters on key issues.
Election financing from state to national levels may seem complicated, but it is critical to understand as you get involved in supporting either candidates or platform issues as an organization!
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>> Read more articles by Devon Reeser
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