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Introduction
As local Indivisible groups have engaged in several election cycles, we’ve received many questions about campaign finance law. While we’re not able to provide legal advice, the following is meant to be a helpful resource to provide a general overview and answer common questions.
Questions about spending on electoral activities and campaign finance are often very nuanced. Answers to these questions will generally depend on the details. This overview will give you a good framework for thinking about broad questions, but it won’t get into specifics.
While Indivisible groups sometimes engage in federal political spending through our programs, the most important way you can support candidates in your area is to spend your time, not your money. Volunteer time—canvassing, making phone calls, or holding candidate forums—is a huge factor in who gets elected, and requires the least amount of compliance by your group (none, as long as no costs are incurred).
State and local campaign finance law varies widely by place. The guidelines and answers in this resource are only applicable to federal races. This resource is meant for groups looking to engage in federal level elections. If you are considering engaging in state or local elections (such as governor, mayor, county council, state legislator, ballot measures , etc.), you should seek out local resources on campaign compliance in your area.
Disclaimer
PLEASE NOTE: How you engage in elections depends a lot on your group’s organizational status. This guide is intended for unincorporated local groups and those spending money under 501(c)(4) tax rules—independently, or through fundraising or voter contact tools we offer as a 501(c)(4) organization ourselves.
Please note that the information contained in this fact sheet and any attachments is being provided for informational purposes only and not as part of an attorney-client relationship. The information is not a substitute for expert legal, tax, or other professional advice and counsel tailored to your specific circumstances, and may not be relied upon for the purposes of avoiding any penalties or prosecution.
Types of Political Spending: Contributions and Independent Expenditures
There are two types of political spending in federal elections: contributions (monetary or in-kind) and independent expenditures (“IE”). Political spending must be reported by the organization engaging in political spending: that is, funding the project.
What are Contributions?
A contribution is a gift, subscription, loan, advance, or deposit of money or anything of value given to influence a federal election or benefit a candidate or political committee; or the payment by any person of compensation for the personal services of another person if those services are rendered without charge to a candidate or political committee for any purpose. Essentially, anything of value provided to a candidate or political committee, including a federal candidate, a party committee in relation to a federal candidate, or to a PAC.
What is an in-kind contribution?
An in-kind contribution is a contribution other than cash, such as goods or services, and they have the same limits as cash contributions. Contribution limits vary based on the donor’s status:
- Contributions by individuals (or unincorporated groups) have an FEC limit of $3,300 per election per candidate and must be reported. This limit is indexed for inflation in odd number years. Updated contribution limits can be found here.
- Contributions by most political action committees have an FEC limit of $5,000 per election per candidate and must be reported. Political action committees also must disclose lots of additional information, such as the names of all of their donors giving more than $200 in the year.
- Corporate entities, such as 501(c)(4) organizations can’t make contributions to candidates or party committees, whether monetary or in-kind.
Additionally, any money spent on coordinated activity (meaning, with knowledge of a campaign or political party’s plans, projects, activities, or needs) will be treated as an in-kind contribution. Therefore, 501(c)(4) organizations cannot engage in coordinated activity as they cannot make in-kind contributions to candidates or political parties. For more information, see the section below on coordination.
Groups who receive funding through Distributed Fundraising, GROW Grants, or other Indivisible Project programs may not make contributions (monetary or in-kind) using those funds or accounts.
What are Independent Expenditures?
An independent expenditures (“IE”) is an expenditure for a communication that:
- Expressly advocates the election or defeat of a clearly identified candidate - some clear exhortation to vote for or against a candidate (“Smith’s the one!”, “Obama ‘08”, “Jones isn’t for us” or the like); and
- Is not made in consultation or cooperation with, or at the request or suggestion of any candidate or his/her authorized committees or agents, or its agents (otherwise known as coordination).
The amount of money that industries, non-profits, and interest groups can spend when they coordinate directly with a federal political campaign is limited by federal campaign finance law, and coordinated spending is prohibited for some of those groups. As a result, many of these organizations use IEs to fund large-scale electoral activity, without coordinating with the campaign they’re supporting. IEs still have reporting requirements, but they are unlimited in terms of the amount of spending.
Indivisible National operates on the IE side of political spending, which means that our expenditures may not be coordinated.
What is Coordination?
Coordination is conduct by a candidate, party, IE committee, or agent, that influences or appears to influence the timing, targeting, or messaging of an IE communication.
What makes the supposedly “independent” communication or activity unlawfully coordinated is when the supposedly independent group learns – from discussions, through a common vendor or in some similar way – non-public information about the plans, projects, activities, needs, desires or strategies of the federal candidate (or party committee) and that information is useful to the independent, outside group in creating and disseminating its communication – in terms of message, targeting, timing, etc.
Coordinated expenditures are expenditures made in cooperation, consultation or concert with, or at the request or suggestion of, a candidate, a candidate’s authorized committee, or their agents, or a political party committee or its agents. A simple example of coordination occurs if a campaign worked directly with an outside group on the best messaging to use while canvassing - that would be considered coordination. Similarly, if an outside group reached out to a campaign to figure out which voters to target for Get Out the Vote, or if a campaign asked an outside group to use their connections to a local reporter to get a press clip about the candidate, that would be considered coordination.
What are some examples of coordination?
- A candidate asks a group to move its IE work to an area where the candidate’s polling numbers are low.
- A group leader reaches out to a party leader to run the group’s IE messages by them.
- A group leader has a private meeting with a campaign manager, and afterwards there is a shift in the strategy of the IE work in that race in any way informed by that contact.
IEs and Coordination in Incorporated and Unincorporated Groups
We know Indivisible groups around the country have varying legal structures. Many groups remain unincorporated, which we think is the right choice for many groups. Others have incorporated as 501(c)(4) non-profits, or organized themselves as political action committees (PACs). Several have incorporated as 501(c)(3) non-profits.
Your group’s tax and incorporation status will have an impact on your ability to engage in electoral work. Different legal structures have various ways they can engage with elections—you can see an outline of the most common below:
Unincorporated Groups are free to engage in electoral work on either the coordinated or IE side. They can endorse candidates and work to support them. However, spending from these groups is still subject to reporting requirements and contribution limits (on the coordinated side), and so groups should make sure that they are spending their time, not their money, whenever possible.
501(c)(4) Organizations are non-profits that are permitted to do a limited amount of political and electoral work. These organizations can endorse candidates, and spend money to support or oppose candidates as long as the spending is not coordinated. That said, electoral work cannot be the primary goal of a (c)(4). If your organization is incorporated as a (c)(4), make sure you are talking to a lawyer to ensure you are complying with tax and campaign finance requirements. 501(c)(4)s are prohibited under federal election law from making any cash or in-kind contributions to any federal candidates or party committees —including spending any money on communications that are coordinated with a candidate. While they can engage in independent expenditure activity that supports or opposes candidates, this activity must be reported to the FEC.
Political Action Committees (“PAC”) are organized for the primary purpose of raising and spending money—either to defeat or elect a candidate. Depending on how they are set up, they may be able to contribute directly to candidates, but have specific limits in the amount they can contribute. So-called Super PACs have no limitations on the amount of spending, but they can only spend money through IEs—and they cannot contribute directly to campaigns, candidates, political parties using either cash or in-kind contributions. Super PACs are allowed to raise an unlimited amount of money from individuals, corporations, unions and other groups. Hybrid PACs - a PAC and a Super PAC in one committee with two bank accounts - also are common.
501(c)(3) Organizations are non-profits that are primarily focused on educational charitable activities. Unlike a 501(c)(4), these organizations cannot partake in any partisan political activity; that is, activity focused on promoting or opposing a candidate or political party. We do not recommend that Indivisible groups incorporate as 501(c)(3)s.
Ways to Engage in Elections
Groups will have to determine whether they want to engage in electoral activity on the “coordinated side” or on the “IE side” each election cycle. Groups generally cannot move back and forth between the two sides. As you get ready to start electoral work, your group should pick which side you want to engage on, and commit to it.
Indivisible national generally operates on the IE side. In general, Indivisible national does not coordinate directly with campaigns or parties. Staying on the independent side gives us more flexibility to engage with groups and support candidates who mirror our movement’s values.
As a result, all paid voter contact tools provided by Indivisible national can only be used by groups working on the IE side. Groups across the country may choose to coordinate directly with political campaigns or political parties. But any groups who decide to coordinate will be limited to only using publicly available tools.
While your group as a whole needs to pick between working on the IE or coordinated side, individual group members are still free to volunteer for a local campaign directly. We get into more detail on this below, but individual group members should still feel free to sign up directly with a political campaign to volunteer, even if their Indivisible group is working on the IE side. If your group chooses to work on the IE side, any group leadership that has (or may in the future be exposed to) non-public information about a campaign should step down from leadership for the duration of the election. Such people should also be careful about any other involvement they have in your group, or in communications with Indivisible staff.
Frequently Asked Questions
The following questions outline basic answers to some common questions about compliance and election law. Keep in mind, laws vary widely from state to state, so these answers only apply for races at the federal level, and definitions of “coordination” and “independent expenditures” may vary for state or local-level races.
What Constitutes Coordination With a Candidate, a Political Party, or Their Agents?
“Coordination” is a legal term that means that the candidate, candidate’s committee, political party, or one of their agents or representatives has done one of the following with regard to the spending of an outside group: (1) requested or suggested the spending; (2) was materially involved in the spending; (3) had a substantive discussion with you or someone in your group related to strategy or spending; or (4) has used the same vendor that you or your group is using to carry out your spending. The involvement of former employees or former independent contractors of the candidate in your group may also result in coordination. Coordination may include:
- Hosting or sponsoring campaign events for, or in partnership with, a candidate or political party. (Sponsoring events for the general public at which candidates appear may be fine as long as the events are not campaign-related).
- Giving or sharing resources with a candidate or political party, such as money, data, vendors, or public outreach tools.
- Strategizing with a candidate, a political party, or their agents about the upcoming election in any way.
- Sharing or exchanging non-public information with a candidate or his or her campaign team.
General expressions of endorsement or opposition to a candidate are not considered coordination, nor is using information that is publicly available, such as a list of campaign offices published on a candidate’s website.
What if My Group Has Already Coordinated With a Federal Candidate?
Incorporated groups with members that have coordinated with a federal candidate are likely barred from spending money on electoral activities supporting that candidate, unless they set up special procedures to ensure that those who have coordinated with the campaign limit their interactions with the people involved with the group’s spending on electoral activities (also known as a “firewall”). Unincorporated groups that have coordinated might be able to spend some money, but that spending might be subject to reporting requirements and strict contribution limits. In either case, it’s good to check with a lawyer on best steps moving forward.
If a Group Is Coordinating, Then Which Tools and Guides Are They Prohibited From Using? Which Are Still Ok to Use?
Groups that are coordinating with campaigns should not use voter contact tools that Indivisible is providing, like canvass and phone bank tools. Groups that are part of the Distributed Fundraising program or recipients of GROW grants may also not use those funds to engage in coordinated spending. Groups are still allowed to use all publicly available guides on indivisible.org. Groups are allowed to access all webinars. Groups that are coordinating with a candidate, candidate’s committee, or political party must refrain from sharing any non-public information about the campaign with state or regional organizers.
What Are Examples of Independent Expenditures (IEs)?
Independent Expenditures are paid communications to the public in any medium that advocate for the election or defeat of a clearly identified candidate, which are not made at the request of or otherwise in coordination with candidates, political parties, or their agents.
Under federal election law, IEs may include:
- Canvassing and calling voters to advocate for the election or defeat of a candidate;
- Holding public actions and rallies to advocate for the election or defeat of a candidate;
- Mail, broadcast, cable, satellite, billboard, internet (and all other mediums) communications that advocate for the election or defeat of a candidate; and/or
- Targeting particular groups of voters with a communication advocating for the election or defeat of a candidate, including compiling mailing and canvassing lists and other outreach tools that facilitate these communications.
The standards for determining whether a person or group has engaged in an independent expenditure may be different with regard to state or local elections.
Groups engaging in independent expenditures cannot simultaneously coordinate with candidates for office under federal election laws. The tools that Indivisible provides to groups are paid for through the IE process.
If I Have Not Coordinated, When Do I Need to Register and Report My Spending?
If you have not coordinated and you’re going to spend money on electoral activities in support of or in opposition to a federal candidate, it’s likely that you’ll be engaging in an independent expenditure. Depending on the quantity of money you spend and the type of electoral spending, you may need to register to electronically file with the Federal Election Commission and report your spending to the Federal Election Commission by specific deadlines. Those deadlines and the particulars of what you must report can be complicated (and the deadlines can be very quick, within 24 hours sometimes), so we suggest that you consult with an attorney before making an independent expenditure.
Note that spending or resources provided to groups by Indivisible Project or its programs (such as Distributed Fundraising) are tracked and reported by Indivisible. Groups participating in our distributed fundraising programs and utilizing those funds for those activities do not need to do any additional reporting of their own. You can find more information here.
If My Group Is Unincorporated, Do I Still Need to Report to the FEC?
If your group is engaging in political spending, then yes, unincorporated groups may need to report spending to the Federal Election Commission.
How an unincorporated group reports its activity depends on how the money is being spent. If an unincorporated group's electoral spending is being paid for out of individual group members' accounts, not a group bank account, then that spending will be treated as individual spending, and each individual would be responsible for keeping track of their own spending with respect to any reporting thresholds or contribution limits that might apply. If an unincorporated group's electoral spending is being paid for out of a group bank account, then the group should report that spending as a group, not on an individual basis.
More information and instructions for unincorporated groups reporting IEs can be found on the FEC website here:
If your group is using the Indivisible Distributed Fundraising Program, that reporting is done by Indivisible. If your group is not, you should consult with an attorney before spending money related to an election.
Can Group Leaders Take on a Paid Role in a Campaign or Coordinate With a Campaign and Still Lead an Indivisible Group?
Anyone in a leadership position in the group who is paid by a campaign in an election that the group is working on (or otherwise has or will have access to non-public information) should step down to a regular volunteer role, so as not to be seen as influencing the decision making of the group based on non-public information they pick up as a paid staffer. The group may also need to take other steps to ensure that there is no coordination, and should probably consult a lawyer before making independent expenditures.
If a Group Decides to Use Indivisible National’s Tools on the IE Side, Can Individual Group Members Still Volunteer Directly for a Campaign?
Individual group members are welcome to volunteer on any campaign at any level, so long as they are not spending any money in support of the campaign or working directly with the campaign to learn about non-public strategy that may impact the group’s ability to make IEs.
Case Study: Individual Volunteering
Alice from Indivisible Eastern Tennessee has gotten really excited about the campaign for Tennessee’s 2nd Congressional District. She is particularly excited about one candidate, Maria Gomez. One Saturday before the primary, Alice goes to one of Maria Gomez’s local district offices and signs up for a volunteer shift. She’s given a packet of names, and spends three hours canvassing her neighborhood. The next Tuesday, Alice attends Indivisible Eastern Tennessee’s meeting. The group decides to move forward with an endorsement of Gomez, and schedules canvassing shifts for group members on the IE side using Indivisible national’s tools. Alice is still free to volunteer with her Indivisible group’s canvassing efforts on the IE side, even though she already volunteered directly with Gomez’s campaign.
Are Indivisible Members or Leaders Who Are Employed by a Campaign Restricted in Their Ability to Engage With Indivisible Electoral Tools?
Yes, at the federal level, once individuals are being paid by a Campaign or are otherwise spending money on a campaign, they must be very careful about how they conduct themselves. There are limits on how campaigns can spend their money and requirements for reporting any money spent or resources used.
Indivisible group members should feel free to volunteer their time on behalf of a campaign, but if a group member is hired directly by a campaign, they will not be able to volunteer with their group on the IE side using Indivisible tools.
Can a Group Recruit Volunteers for a Candidate When on the IE Side?
It is fine for groups to inform or recommend that people volunteer for publicly disclosed candidate-sponsored events. Any volunteer opportunities you re-post must be based on public information, like office locations, events listed on the campaign’s website, Mobilize page, or public Facebook or Twitter accounts.
Are Social Media Accounts on Twitter & Facebook Run by Individuals That Use the Indivisible Name Subject to Any Restrictions Regarding Candidates?
On the federal level, individual Indivisible group accounts may share publicly available information about candidates or candidate events. The same goes for individuals’ accounts, as well as closed Facebook pages. These are still considered public communication. Paid advertisements on social media sites that advocate for the election or defeat of a candidate would be considered IEs and require reporting.
Can an Indivisible Group Host a Fundraiser for a Candidate?
No, Indivisible groups may not host a fundraiser for or on behalf of a candidate because doing so would be a contribution to a candidate which would be subject to campaign finance rules and reporting requirements.
Can Indivisible Groups Promote Publicly Available Fundraisers for Candidates?
If your group has moved through the endorsement process and decided to endorse a candidate, group leaders may choose to send out publicly available fundraising links for candidates. Indivisible groups may not spend any money to advertise or promote those pages or links.
However if your group has not endorsed a candidate, because different group members may support different candidates—particularly during the primaries—we would strongly recommend group leaders refrain from promoting fundraisers for any candidates that their groups have not already voted to endorse.
Can a Group Member Without an Official Title or Role in the Group Be Paid for Campaign Work and Still Contribute to Indivisible, With Restrictions, on Their Own Time?
Group members who are paid for campaign work can still do advocacy work as a volunteer with Indivisible, but they should be very careful not to engage in electoral work with Indivisible related to the same race in which they are getting paid.
Additionally, they cannot share any non-public information about the campaign with Indivisible staff, or with any local groups that are using Indivisible tools for electoral work. It’s important that people who are paid by campaigns be transparent about that fact with their Indivisible group, so that the group can set boundaries on those people’s involvement in group activities.
As an Individual Can I Contribute to Candidates Directly?
Yes, individual group members or leaders can personally contribute their own funds to candidates if they choose.
What Limitations Are Imposed by Groups Incorporated as 501(C)(4)s?
- If your group incorporates and seeks 501(c)(4) status, it can introduce some restrictions on your activities, including but not limited to:
- Incorporated 501(c)(4)s must spend less than half of their time and resources on partisan political activity, i.e., promoting or opposing a candidate or political party, opposed to advocacy around issues.
- 501(c)(4)s must report independent expenditures in federal elections to the FEC when they total at least $250 per election. Many states impose similar reporting requirements for state and local elections.
- Incorporated 501(c)(4)s are strictly prohibited from making direct and in-kind contributions to federal candidates or party committees.
More information on C4 restrictions and reporting can be found on the FEC site here: Reporting independent expenditures on Form 5
What Limitations Are Imposed by Groups Incorporated as 501(C)(3)s?
There are many restrictions that apply when a group obtains C3 status. Notably, C3 organizations may not engage in partisan political activity (work that supports or opposes a candidate or party in an election). However they may under some circumstances engage in nonpartisan work around elections, such as voter registration, voter education, and issue advocacy, including hosting nonpartisan candidate debates.
We do not recommend incorporating as a 501(c)(3) organization if you or your group are interested in engaging in any political activity, and recommend that groups consult with legal counsel before seeking C3 status. For more information about group status, check out our resource here: Common Legal Structures for Indivisible Groups.
You Didn’t Answer My Question!
Feel free to reach out to your Organizer or supportteam@indivisible.org and we can point you in the right direction!
Bolder Advocacy also provides great research and guidelines on election law. Check out their website for more in depth resources on everything from types of organizations to electoral activity.