Chapter 4: Contributions (Money & Goods In)

Official Source: Chapter 4 - Contributions

Introduction

In the eyes of the law, a "contribution" is more than just a check. It is anything of value given to your campaign for which you didn't pay full price. This chapter defines exactly what counts as a contribution, when you legally "receive" it (which starts the clock for reporting), and how to handle special situations like fundraisers, auctions, and cryptocurrency.

Understanding this is critical because every contribution counts toward the limits discussed in Chapter 1.

Part A: What is a Contribution?

A contribution generally falls into one of these categories:

1. Monetary: Cash (never over $100), checks, credit card payments, wire transfers, or text message donations.
2. Non-Monetary (In-Kind): Goods or services donated to you for free or at a discount. Examples include free office space, donated food for an event, or free printing.
3. Loans: Money lent to the campaign, including loan guarantees or lines of credit.
4. Enforceable Promises: A written promise to pay for specific goods (e.g., a signed contract saying a donor will pay for your billboard). Note: Pledge cards do not count.
5. Extensions of Credit: If a vendor bills you and you don't pay within 45 days, that unpaid bill turns into a contribution (and counts toward limits), unless it is a standard business arrangement with a written agreement to pay later.

When is a Contribution "Received"?

This is the most common trap for new treasurers. The clock starts ticking when you possess the funds, not when you go to the bank.

• Checks/Cash: Received the day you or your agent (campaign manager, fundraiser) holds the check. If a donor hands a check to your consultant on Friday night, you "received" it Friday, even if you don't see it until Monday.
• Online/Credit Cards: Received the day you get the email notification or the funds are settled into your account/processor—essentially when you have control over the money.
• Non-Monetary: Received on the earlier of these dates:
  1. When the donor pays for the item.
  2. When you possess the item.
  3. When you receive the benefit of the item.

Part B: Exceptions (What is NOT a Contribution)

You can accept the following without reporting them as contributions or counting them toward limits:

1. Volunteer Personal Services: If someone volunteers their time to walk precincts or manage your social media, it is not a contribution.
   • The Trap: If an employer pays their employee to work on your campaign, that is a contribution from the employer (if the employee spends >10% of their compensated time on your campaign).
2. Home/Office Fundraisers (The $500 Rule): If a supporter hosts a fundraiser in their home or office, the cost of the event is not a contribution IF the total cost is $500 or less.
   • Calculation: If the host spends $300 on food and a neighbor brings $100 of wine, the total is $400. This is under $500, so nothing is reported.
   • Calculation: If the host spends $400 and a neighbor brings $200 of wine, the total is $600. Now both the host and the neighbor have made reportable non-monetary contributions ($400 and $200 respectively).
   • Restriction: Lobbyists cannot host home fundraisers for candidates they are registered to lobby.
3. Member Communications: If a union or organization sends a mailer only to its own members supporting you, that is not a contribution.
4. Uncompensated Internet Activity: Individuals posting about you on social media, blogging, or sending emails to friends for free are not making contributions.

Part C: Determining the Source (Aggregation)

Sometimes, multiple checks are legally considered to be from one single source. You must "aggregate" (add together) these contributions to see if they exceed the contribution limit.

The Golden Rule of Aggregation: If the same person directs and controls the money, it is one source.

• Individual + Business: If Sally Perez gives $500 personally and her wholly-owned business "Perez Flowers" gives $500, you report receiving $1,000 from Sally Perez.
• Parent + Subsidiary: If a parent company and a subsidiary both donate, and the parent controls the subsidiary's decisions, they are one contributor.
• Family: Spouses are separate contributors. Children under 18 are presumed to be contributors via their parents.

Part D: Special Types of Contributions

1. Cryptocurrency

You can accept crypto, but it is strict.

• No Direct Wallet Transfers: You must use a US-based payment processor (like BitPay or Coinbase) that uses "Know Your Customer" (KYC) protocols.
• Information Collection: The processor must collect the donor's name, address, occupation, and employer.
• Immediate Conversion: The crypto must be converted to US Dollars immediately upon receipt.
• Reporting: Report the value as a non-monetary contribution and a miscellaneous increase to cash.

2. Fundraisers & Auctions

• Tickets: The entire price of a ticket is a contribution. Do not subtract the cost of the chicken dinner.
  • Example: Ticket is $100. Dinner cost $25. You report a $100 contribution.
• Auctions:
  • The Item: The person who donates the item makes a non-monetary contribution equal to the Fair Market Value (FMV).
  • The Buyer: If the buyer pays more than the FMV, the amount over the FMV is a monetary contribution. The amount equal to the FMV is a "Miscellaneous Increase to Cash."
  • Example: A TV worth $500 is donated. Bidder buys it for $600.
    • Donor = $500 non-monetary contribution.
    • Bidder = $100 monetary contribution + $500 miscellaneous cash increase.

3. Joint Checking Accounts

If you receive a check with two names (e.g., "John and Jane Doe"):

• It counts as a contribution from the signer of the check.
• If both sign, it is split 50/50.
• If only John signs but he wants it to count for Jane, both must sign a document stating how the money should be attributed.

4. Intermediaries (Earmarked Funds)

It is illegal to hide the true source of a contribution. If "Donor A" gives money to "Person B" to give to you, "Person B" is an intermediary.

• You must disclose both the intermediary and the true source.
• Never accept a large bundle of checks from a single person without asking if they are an intermediary.

Part E: Valuing Non-Monetary (In-Kind) Contributions

You must report the Fair Market Value (FMV)—what it would cost a member of the public to buy the item.

Part F: Actions & Notifications

The $5,000 Major Donor Notice

If any individual or business (that is not a recipient committee) gives you $5,000 or more in a calendar year, you are legally required to notify them that they may have their own filing obligations.

• Trigger: Receipt of $5,000+ from a single source.
• Deadline: Send notice within 2 weeks (or 1 week if within the 90-day pre-election window).
• Action: Send a letter/email stating: "If your contributions to state/local committees total $10,000 or more in a year, you must file Form 461 as a Major Donor."

Returning Illegal/Excess Contributions

If you accidentally accept a contribution that is over the limit or from a prohibited source:

• The 14-Day Rule: You have 14 days to return it. If you return it within this window (and haven't spent it), you generally do not have to report it (unless you already deposited it).
• Deposited Funds: If you deposited it, you must report it, then report the return (expenditure).
• Missing Info: If you have a $100+ donor but are missing their occupation/employer, you must return the money within 60 days if you cannot get the info.

Defeated Candidates

If you accept money for the General Election but lose in the Primary:

• You must refund the General Election money to donors.
• You can deduct administrative costs (stamps, envelopes) and expenses already paid for the General Election (like pre-booked TV ads).
• Refunds are calculated on a "pro rata" (proportional) basis.

Summary Checklist

1. Date Received: Log contributions the day you get them, not the day you bank them.
2. No Cash: Never accept more than $100 in actual cash.
3. Get the Info: For every donor of $100+, get Name, Address, Occupation, and Employer.
4. Send Notices: If a donor hits $5,000, send the Major Donor notice immediately.
5. Value In-Kind: Ask donors for the Fair Market Value of goods they donate.
6. Return Mistakes: If you spot an over-limit check, refund it within 14 days.