Last week, we started our article series on setting up an issue committee and getting involved with your local politics. This week, we are continuing with banking and campaign finance.
As you read, keep in mind that we are passing on some of our experience and lessons learned but are not lawyers. We strongly encourage you to seek knowledgeable legal counsel to help you manage the myriad pitfalls and loopholes in campaign law to keep you above board.
Is there anything special about setting up a bank account or choosing a bank?
No special type of account needs to be set up for an issue committee – a run of the mill business checking account with a debit/credit card will suffice. The only requirement is that all funds collected are deposited into this account and said account includes the name of the committee.
Be direct and honest when setting up your account and be sure that the bank understands your cause. If they are confused or feel that you haven’t been forthcoming about your intentions, they may close your account and ask you to leave, regardless of the effect the timing may have on your campaign.
Remember that banks are not immune from political pressure from internal management or financially influential customers. Being perceived as taking “the wrong side” can have a significant impact on a bank’s bottom line and they are risk-averse institutions. Do not be surprised if your business is declined and be prepared to “shop around” to several institutions if your issue is particularly volatile.
Are there special requirements regarding how I collect, report or spend funds?
Yes. In fact, this part of the process is where things are most complex and we highly recommend seeking professional advice from either a lawyer or a company such as Polifi (www.swspolifi.com) that specializes in campaign finance for issue committees, non-profits and political campaigns. You can also begin educating yourself on the many rules involving donations, gifts in kind and what you can spend your money on by reviewing the Colorado Secretary of State’s campaign finance manual
You can collect donations in cash, via credit cards, with checks, and you can collect in person or online. You can also take donations of equipment, information, or other materials as well as professional services. All of it needs to be reported, so be sure to keep good records of everything you receive. You must resist the inclination to think of donations only as financial transactions. According to the Colorado SOS manual (page 26): “Non-monetary donations of goods, equipment, supplies or services constitute contributions, and require disclosure. Non-monetary contributions count against contribution limits.” Money will be the easiest to record and valuate, but gifts in kind need to be valued and recorded just the same.
You can either collect the old fashioned way by accepting cash or check and writing a receipt to the contributor, or you can set up some electronic point of sale using a credit card processor and a laptop/tablet/smart phone. The advantage of the electronic method is that the same credit card processor can be used to collect website donations. It is important to do your homework when selecting such a processor. Some will be more user friendly and willing to work with you than others. Just like banks, they can be politically influenced, so it would be best to find a few options and contact them to determine how they can work for you.
There are three categories of donations to consider, each with reporting requirements based on their size.
- Donations of less than $20 must be reported, but they do not need to be itemized
- Donations of more than $20 must be reported and itemized. This includes gifts in kind that can be valued at more than $20. For these donations, you must record the name and address of the contributor.
- Donations of $100 or more must be itemized, you must collect the name and address of the contributor, as well as their occupation and employer.
Valuing gifts in kind cannot be overlooked. For example: If an entity or person gives you a list of names to use as contacts, that has a value and it must be reported. If an entity or person pays for your transportation to an event, that has value and must be reported. If an entity or person allows you to use their equipment to print fliers, that has value and must be reported. Even if the gift doesn’t have a value you can calculate into dollars, you still must report it as a gift. It’s not wrong to document even the smallest of gifts as it will save you headaches when it comes time to submit your financial report.
As long as you’ve documented all donations, you shouldn’t have any problems with reporting. You can file online or reports can be dropped off at various locations, depending on whether your committee was at the county level or state level. For information on where to file your report, please see page 5 of the CO SOS manual: http://www.sos.state.co.us/pubs/elections/CampaignFinance/files/CPFManual.pdf
Next week we will delve into the message you are trying to convey and the tools you can use to do so.
Yours in Liberty,
The Board of Directors
Colorado Second Amendment Association