Joint fundraising with other candidates and political committees

All participants in a joint fundraising effort, including unregistered organizations, must:

• Create or select a federal political committee to act as the joint fundraising representative;
• Agree to a formula for allocating proceeds and expenses;
• Sign a written agreement naming the joint fundraising representative and stating the allocation formula;
• Establish a separate account for joint fundraising receipts and disbursements;
• Notify the public of the allocation formula and certain other information when soliciting contributions;
• Screen contributions to make sure they comply with the limits and prohibitions of the Federal Election Campaign Act (the Act); and
• Report allocated proceeds and expenses (applies to political committees only).

The committee named as the fundraising representative has additional responsibilities.

Levin fundraising (party committees only)

State and local party committees may not raise Levin funds through joint fundraising activity with any other state or local party committee. This prohibition applies to committees in different states as well. However, state and local party committees may jointly raise funds which are not used for Federal Election Activity (FEA).

In addition, national party committees may not participate in any joint fundraiser where nonfederal or Levin funds are raised.

Joint fundraising participants must either establish a new political committee (using a Statement of Organization (Form 1)) or select a participating political committee to act as the joint fundraising representative. (It is strongly recommended for ease of compliance with the law that participants establish a new political committee.)

This committee is responsible for:

• Collecting and depositing joint fundraising contributions;
• Paying expenses;
• Allocating proceeds and expenses to each participant;
• Keeping records; and
• Reporting overall joint fundraising activity.

Registering and naming the joint fundraising representative

A new political committee established for the joint fundraiser must register with the FEC using Form 1 (Statement of Organization), and must include the name of each participating federal candidate in the new committee’s name. (An existing committee would be required to amend its Statement of Organization.) Thus, for example, a joint fundraising committee established to raise funds for a candidate and a party could not be called "Victory '24," but might be called the "John Doe Victory '24" committee. Any federal candidate participating in the fundraiser must designate the fundraising representative as an authorized committee (by amending the Statement of Candidacy (Form 2)).

Collecting and forwarding contributions

If a new committee is established, it collects all the contributions. Note that such a committee may not itself be a participant in any other joint fundraising effort, though it may conduct more than one event or activity on behalf of its own participants. Alternatively, if a committee participating in the fundraiser serves as the joint fundraising representative, it and any other participating committees may collect contributions; however, all contributions received by the other participants must be forwarded to the joint fundraising representative within 10 days of receipt.

Use of commercial firm

Although participants may hire a commercial fundraising firm or other type of agent to assist with organizing and holding the joint fundraiser, they are still required to establish or select a new political committee to serve as the fundraising representative.

Before conducting a joint fundraiser, all participants must enter into a written agreement that identifies the joint fundraising representative and states the allocation formula—the amount or percentage that the participants agree to use for allocating proceeds and expenses. The joint fundraising representative must retain a copy of the written agreement for three years and make it available to the FEC upon request.

The joint fundraising participants or the joint fundraising representative must establish a separate account solely for the receipt and disbursement of all joint fundraising proceeds. Each participating political committee must amend its Statement of Organization (Form 1) to show the account as an additional depository.

Depositing contributions

The joint fundraising representative must deposit contributions into the account within 10 days after receiving them. Only contributions permissible under the Act may be deposited in the joint fundraising account. If any participant is an unregistered organization which may, under state law, accept prohibited contributions, the participants may either establish a second account for such contributions or forward them directly to the participants that may accept them.

Start-up costs

Participants may advance funds to the joint fundraising representative for start-up costs of the fundraiser. (Note, however, that individuals may not advance such costs or pay for expenses out of pocket to be reimbursed later.) The amount advanced by a participant should be in proportion to the agreed upon allocation formula. Any amount advanced in excess of a participant’s proportionate share is considered a contribution and must not exceed the amount the participant may contribute to the other participants (However, an exception is made for funds transferred between party committees.)

Unregistered organizations

An unregistered organization (such as a party organization that has not yet qualified as a political committee) must use permissible funds when advancing money for start-up costs. If an unregistered participant advances more than its share of start-up costs and thus makes a contribution, the contributed amount may trigger registration and reporting requirements under the Act.

In addition to any fundraising or disclaimer notices required, a joint fundraising notice must appear with every solicitation for contributions. The notice must contain the following information:

• The names of all participants, regardless of whether they are registered political committees or unregistered organizations;
• The allocation formula (the amount or percentage of each contribution that will be allocated to each participant);
• A statement informing contributors that they may designate contributions for a particular participant (notwithstanding the formula); and
• A statement that the allocation formula may change if any contributor makes a contribution which would exceed the amount he or she may lawfully give to any participant.

In two situations, participants must include additional information in the joint fundraising notice:

• If a participant is engaging in the joint fundraiser to pay off outstanding debts, the notice must state that the allocation formula may change if the participant receives enough funds to pay its debts.
• If, under state law, any unregistered participant is permitted to receive contributions prohibited under the Act, the notice must say that such contributions will be given only to participants that may legally accept them.

Screening contributions

The fundraising representative and participants must screen all contributions to make sure they are neither prohibited by the Act nor in excess of the Act's contribution limits. The maximum amount a contributor may give to a joint fundraiser is the total amount he or she may contribute to all participants without exceeding any limits.

To facilitate screening, participants must provide the joint fundraising representative with records of past contributions so that the representative may determine whether a donor has exceeded the contribution limits.

Recordkeeping

Receipts

With regard to gross proceeds, the joint fundraising representative must collect the required recordkeeping information and later forward it to the participating political committees. The date of receipt is the date the joint fundraising representative receives the contribution.

Prohibited contributions
The joint fundraising representative must also keep a record of the total amount of prohibited contributions received, if any, and of any transfers containing prohibited funds made to participants that may accept them.

Disbursements

The joint fundraising representative must retain, for three years, the required records on all disbursements made for the joint fundraiser.

In general, expenses must be paid before proceeds may be transferred to the participants. Thus, the joint fundraising representative may make payments for fundraising expenses from gross proceeds collected at the fundraiser (and from funds advanced by the participants). Nevertheless, it must allocate (but not transfer) gross proceeds among the participants.

Step 1: Allocate gross proceeds

Generally, the joint fundraising representative must allocate gross proceeds according to the allocation formula. However, as stated in the fundraising notice, the formula may change if the allocation results in:

• An excessive contribution from a contributor to one of the participating committees; or
• A surplus for a participant raising money solely to pay off campaign debts.

Reallocation under these circumstances must be based on the other participants’ proportionate shares under the allocation formula. If reallocation results in a contributor exceeding the contribution limits for the remaining participants, the joint fundraising representative must return the excess amount to the contributor.

Designated contributions

Designated or earmarked contributions that exceed the contributor’s limit for a participant may not be reallocated without the prior written consent of the contributor.

Prohibited contributions

Prohibited contributions must be distributed only to the unregistered participants that may lawfully accept them; they do not have to be distributed according to the allocation formula.

Step 2: Allocating expenses

After gross proceeds are allocated, the joint fundraising representative must calculate each participant’s share of expenses based on its actual share of gross proceeds. This allocation may differ from the original formula. (Prohibited contributions may be excluded from the gross proceeds when determining the ratio.) Expenses for a series of fundraising events must be allocated on a per-event basis.

Step 3: Calculating net proceeds

The joint fundraising representative may delay transferring net proceeds to participants until after it receives all contributions and pays all expenses for the fundraiser. To determine net proceeds, the fundraising representative subtracts the participant’s share of expenses from its share of gross proceeds.

Reporting by joint fundraising representative

The joint fundraising representative must also report all disbursements made for the joint fundraiser in the reporting period in which they are made. Transfers of net proceeds to the joint fundraising participants are reported as transfers to affiliated committees and itemized on a separate Schedule B for that category.