State of Minnesota

Campaign Finance & Public Disclosure Board
Suite 190, Centennial Building. 658 Cedar Street. St. Paul, MN 55155-1603

THE FOLLOWING PUBLICATION DOES NOT IDENTIFY
THE REQUESTER OF THE ADVISORY OPINION, WHICH IS NON PUBLIC DATA
under Minn. Stat. § 10A.02, subd. 12(b)RE: Campaign finance laws applicable to specific form of political fund

ADVISORY OPINION 427
SUMMARY
An association may accept contributions from individuals into its political fund for the purpose ofmaking its own contributions to Minnesota candidates. The association may permit donors to its
political fund to indicate their preferences for candidates that the association should support. If
donor preferences are not a direction or the equivalent of a direction to the association as to thecandidates to whom it should donate, earmarking does not occur.
FACTS
As the attorney for an association (the Association), you ask the Campaign Finance and Public
Disclosure Board for an advisory opinion. Your request included a number of statements ofassumed facts. Only those assumed facts that are necessary to answer your questions areincluded in this opinion.
1. The Association is a corporation that is has been granted tax exempt status under IRC
section 504(c)(4).
2. The Association plans to register a Minnesota political fund.
3. A separate association, which is a political organization that has registered with theInternal Revenue Service under Internal Revenue Code section 527 operates a website
where it provides services through which candidates and associations can solicit andaccept contributions.
4. The Association will use the section 527 organization's website to allow individuals to
make contributions to its political fund.

Question One
Does Minnesota law permit the Association to establish and register a political fund to accept
contributions from individuals for Minnesota state candidates, but not earmarked for any
particular Minnesota candidate?
OpinionAccording to the assumed facts, the Association is a 501(c)(4) nonprofit corporation. By
definition, the major purpose of a 501(c)(4) association cannot be to influence the nomination orelection of candidates.
In Minnesota a political committee is an association whose major purpose is to influence thenomination or election of candidates or to promote or defeat a ballot question. Thus, under theassumed facts, the Association is not a political committee.
An association that is not a political committee, a party unit, or a candidate's principal campaign
committee, may accept contributions and make donations to influence the nomination orelection of candidates in Minnesota. If it does so, the accumulation of money raised or spent forthat purpose is referred to as the association's political fund.
You should note that the Association does not "establish" a political fund. The Association's
political fund is simply the pool of money raised or spent to influence the nomination or electionof candidates. The political fund exists without the Association doing anything other than raisingor spending money to influence the nomination or election of candidates. Registering thepolitical fund means notifying the Board that the Association is raising or spending money toinfluence the nomination or election of candidates or to promote or defeat a ballot question andwill be disclosing the receipt and use of that money.
Your request states that contributions to the Association's political fund will not be earmarked forany particular candidate. Minnesota Statutes section 10A.16, reproduced at the end of thisopinion, prohibits the solicitation or acceptance of earmarked contributions.
Question Two
Does Minnesota law permit the Association's political fund to solicit undesignated contributions
from contributors, while permitting contributors to indicate the candidates they would prefer theAssociation's political fund to support by selecting one or more Minnesota state candidates froma list of candidates? These choices would be considered mere preferences for support, butwould not be binding on the Association's political fund.
OpinionThe question is posed in a way that suggests that the Association's political fund is an entity
separate from the Association itself. An association's political fund is an accumulation of moneythat the association tracks through an accounting mechanism. It is not an entity separate fromthe association itself.
-2-The Board recognizes that disclosure by an association with a political fund is typically done in
the name given by the association to its political fund and, further, that associations often referto themselves by their political fund name when communicating about contributions orexpenditures that will be part of their political fund. This shorthand form of reference is acommon and accepted practice. However, it is important for associations themselves tounderstand that referring to the political fund as if it were a separate entity is simply analternative form of reference to the association itself and to the accounting mechanism that theassociation uses to keep track of the money that constitutes its political fund account.
Thus, the question in this section actually asks if the Association, disclosing its activities throughits political fund, may engage in the specified actions.
If the Association solicits contributions to support Minnesota candidates, those contributions
become a part of its political fund and must be reported on its political fund report. Contributions
to candidates made by the Association and reported through its political fund account arecontributions from the Association, not from the underlying donors to the political fund account.
The Association may solicit donor preference information from its Minnesota donors without aresulting earmarking violation if donor preference indications do not result in donors directing
their contributions to specific candidates.
If examination of the facts in the real world results in a conclusion that donor preferenceindications are the equivalent of directives to make contributions, an earmarking violation wouldresult.
Question Three
May the Association's political fund make contributions to Minnesota state candidates guided by
the preferences indicated by individual contributors?
OpinionThe Association may make contributions to Minnesota state candidates without violating
Minnesota's prohibition on earmarking if the expression of preferences by contributors to theAssociation's political fund is merely a guide and does not constitute a direction by donors as towhere their money should be used. Whether the donors' preferences are merely a guide or are
a direction of spending will depend on the facts in the real world and cannot be determinedconclusively in the context of a hypothetical question.
Question Four
In addition to the questions reproduced above, your request includes a section titled "What does
Minnesota law require?" This section purports to describe Minnesota campaign finance law andincludes a summary that you have complied of registration and reporting requirements forpolitical funds in Minnesota. Your fourth question asks if the summary contains any errors.

-3-Opinion
Minnesota Statutes section 10A.02, provides that the Board may issue advisory opinions basedon real or hypothetical fact situations that provide information to guide an individual or
association's conduct. The advisory opinion process is not used by the Board to edit andcorrect legal summaries that others have produced.
The Board has developed a handbook of campaign finance law applicable to politicalcommittees and funds and has published that handbook on its website. The handbook willanswer most of your questions. Additionally, Chapter 10A speaks for itself. To the extent thatyou ask whether the statute says what it says, you should rely on the statute. With respect tocontribution limits and disclosure dates, the Board publishes annual limits documents andcalendars which you may consult.
From time to time, the Board also provides additional guidance with respect to the application ofChapter 10A. For example, the Board has provided guidance stating that the administrative rule
requiring associations that have political funds to maintain a separate bank account for those
funds will not be enforced.
To the extent that your summary includes references to Minnesota Statutes Chapter 211A or toMinnesota Statutes Chapter 211B, the Board advises that those chapters are not under theBoard's jurisdiction and its published materials do not relate to those chapters.

Issued August 7, 2012

/s/ Greg McCullough
Greg McCullough, Chair
Campaign Finance and Public Disclosure Board-4-

Relevant Statutes
10A.01 Definitions. . .
Subd. 27. Political committee. "Political committee" means an association whose major
purpose is to influence the nomination or election of a candidate or to promote or defeat a ballot
question, other than a principal campaign committee or a political party unit.
Subd. 28. Political fund. "Political fund" means an accumulation of dues or voluntary
contributions by an association other than a political committee, principal campaign committee,
or party unit, if the accumulation is collected or expended to influence the nomination or electionof a candidate or to promote or defeat a ballot question.
10A.16 Earmarking contributions prohibited
An individual, political committee, political fund, principal campaign committee, or party unit may
not solicit or accept a contribution from any source with the express or implied condition that thecontribution or any part of it be directed to a particular candidate other than the initial recipient.
An individual, political committee, political fund, principal campaign committee, or party unit thatknowingly accepts any earmarked contribution is guilty of a gross misdemeanor and subject to a
civil penalty imposed by the board of up to $3,000.

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