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      Fundraising for both federal and nonfederal accounts with same program or event

Fundraising for both federal and nonfederal accounts with same program or event When a nonconnected committee raises money for both its federal and nonfederal accounts, the costs of the fundraising event or activity must be allocated between those accounts. However, the federal account could pay 100 percent of the costs without reimbursement and avoid the need to allocate. Note that expenses incurred in connection with activities directly supporting candidates (such as fundraising for candidates) are not considered the committee’s own fundraising expenses, and the committee must report them as in-kind contributions to the candidates. Payment of allocable fundraising expenses Committees with separate federal and nonfederal accounts must use one of the following two methods to pay allocable fundraising 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 ratio Committees with separate federal and nonfederal accounts must use the following allocation ratio to determine the federal and nonfederal share of allocable activity expenses. Funds received ratio Used for: Direct fundraising costs for both the PAC’s federal and nonfederal accounts 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. Reporting allocated fundraising expenses Required forms Schedule B—Itemized DisbursementsSchedule H2—Allocation RatiosSchedule H3—Transfers from Nonfederal to Federal AccountSchedule H4—Disbursements for Allocated Activity Unique identifier The committee must give each fundraising program a unique name or code. When referring to a fundraising program in subsequent schedules and reports, the committee must continue to use that program’s unique name or code. Allocation ratio If the committee raises money for both its federal and nonfederal accounts through the same fundraising program or event, the costs directly associated with the program or event are allocated using the “funds received” ratio, i.e., the ratio of funds received for federal activities to total funds raised through the program or event. The committee must estimate the ratio prior to beginning the solicitations and report the ratio on Schedule H2.
 Payments The committee pays for fundraising expenses from its federal account (or separate allocation account). The federal and nonfederal shares of the payments are reported on Schedule H4 and included in the total for Line 21(a) (Allocated Federal/Nonfederal Activity) of the Detailed Summary Page. The “year-to-date” figure entered for each fundraising payment represents the total spent on that particular committee fundraising event as of the date of payment.
 Transfers The committee may transfer the nonfederal share of fundraising expenses to the federal account (or separate allocation account) within the 70-day window. The committee reports transfers from the nonfederal account to the federal account for shared fundraising expenses on Schedule H3.
 Adjustments to ratio After a particular fundraising program or event, the committee may need to adjust the allocation ratio reported for the event on Schedule H2 to reflect the federal and nonfederal shares of the actual receipts. The committee must determine whether such an adjustment is necessary within 60 days after the date of the fundraising event. For direct mail fundraising the event date is the day on which the final solicitations are mailed. The adjusted ratio should be noted on a Schedule H2 filed with the committee’s next report.
 If an adjustment indicates that the nonfederal account paid more than its allocable share of expenses for the event, the committee must transfer funds from its federal account to its nonfederal account to avoid an excessive payment by the nonfederal account. Any transfers from the federal account to the nonfederal account made as a result of the revision must be reported on Schedule H4 and included in the total for Line 21(a)(i) on the Detailed Summary Page in the committee’s next regular report. Further adjustments and transfers from the federal account may be necessary if additional federal receipts come in. If an adjustment indicates that the federal account paid more than its share of allocable expenses, the committee may transfer funds from the nonfederal account to make up for the excessive nonfederal payment. Such transfers, however, may only be made within 60 days after the event. Transfers from the nonfederal account are itemized on a Schedule H3 and included in the total for Line 18(a) on the Detailed Summary Page.
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          Fundraising for the PACPaying for fundraising for nonconnected PACNotices required on nonconnected PAC solicitationsPurposes of disbursements Need help? Get help from the FEC by phone or email
 Legal citations Regulations 11 CFR 104.10(b)(2)Reporting by separate segregated funds and nonconnected committees of expenses allocated among candidates and activities; Expenses allocated among activities 11 CFR 106.1(a)Allocation of expenses between candidates; General rule 11 CFR 106.6(b)Allocation of expenses between federal and nonfederal activities by separate segregated funds and nonconnected committees; Payments for administrative expenses, voter drives and certain public communications 11 CFR 106.6(d)Allocation of expenses between federal and nonfederal activities by separate segregated funds and nonconnected committees; Method for allocating direct costs of fundraising 11 CFR 106.6(e)Allocation of expenses between federal and non-federal activities by separate segregated funds and nonconnected committees; Payment of allocable expenses by committees with separate federal and nonfederal accounts


This information is not intended to replace the law or to change its meaning, nor does this information create or confer any rights for or on any person or bind the Federal Election Commission or the public. The reader is encouraged also to consult the Federal Election Campaign Act of 1971, as amended (52 U.S.C. 30101 et seq.), Commission regulations (Title 11 of the Code of Federal Regulations), Commission advisory opinions and applicable court decisions.


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