Allocating shared costs of fundraising for federal and nonfederal candidates

A “direct candidate support” activity is an in-kind contribution that supports specific candidates. In-kind contributions that must be allocated include payments for fundraising activities conducted on behalf of both federal and nonfederal candidates. Allocation is not required, however, if shared expenses are paid entirely by the federal account.

Failure to allocate expenses when required could result in a contribution by the nonfederal account to the federal account—a violation of the Federal Election Campaign Act.

Payment of allocable candidate fundraising expenses

Committees with separate federal and nonfederal accounts must use one of the following two methods to pay allocable activity expenses:

Payment from federal account

The committee may pay the entire amount from its federal account, transferring funds from the nonfederal account to the federal account only to cover the nonfederal share of allocable expenses.

Payment from allocation account

The committee may establish a separate allocation account for the sole purpose of paying joint federal and nonfederal expenses.

Under the second option, the committee transfers funds from both the federal and nonfederal accounts to the separate allocation account in amounts equal, respectively, to the federal and nonfederal shares of each allocable expense. The allocation account is considered a federal account, and the committee must include the account’s receipts and disbursements in its FEC reports.

Timing of internal transfers

The committee must transfer funds from the nonfederal account to the federal account (or to the allocation account) within a 70-day “window”— not more than 10 days before or 60 days after the original payment to the vendor. The committee must report each such transfer and itemize the activities the transferred funds are intended to pay. (A transfer from the federal account to the allocation account is permissible at any time and is not reported separately.)

Time limits also apply to adjustments of the allocation ratio and corresponding transfers, which may be required after an activity where federal and nonfederal funds are raised.

Allocation ratios

Funds received ratio

Used for: Direct fundraising costs of events that support both specific federal and specific nonfederal candidates.

Calculation:

Costs are allocated according to the ratio of funds received for the federal account (or candidates) to the total funds received through the fundraising event.

Committees with separate federal and nonfederal accounts must use the following allocation ratios to determine the federal and nonfederal share of allocable activity expenses.

Reporting allocating costs of fundraising for candidates

This section explains how to allocate the costs of a direct candidate support activity that raises money for both federal and nonfederal candidates. The explanation is based on the following scenario: