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      FEC Record: Outreach
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      Testing-the-waters (2011)

FEC Record: OutreachTesting-the-waters (2011)March 1, 2011 Before deciding to campaign
for federal office, an individual
may want to “test the waters”—in
other words, explore the feasibility
of becoming a candidate. An individual
who merely test the waters,
but does not campaign for office,
does not have to register or report
as a candidate even if the individual
raises more than $5,000—the dollar
threshold that would normally trigger
registration. Nevertheless, funds
raised to test the waters are subject
to the Federal Election Campaign
Act’s (the Act) contribution limitations
and prohibitions. See Advisory Opinion 1998-18. Once an individual begins to
campaign or decides to become a
candidate, funds that were raised
or spent to test the waters apply to
the $5,000 threshold for qualifying
as a candidate. 11 CFR 100.72(a)
and 100.131(a). Once that threshold
is exceeded, the individual must
register with the FEC (candidates
for the House of Representatives or
President) or the Secretary of the
Senate (candidates for the Senate),
and begin to file reports. Testing the waters vs. campaigning An individual may conduct
a variety of activities to test the
waters. Examples of permissible
testing-the-waters activities include
polling, travel and telephone calls
to determine whether the individual
should become a candidate. 11 CFR
100.72(a) and 100.131(a). Certain activities, however, indicate
that the individual has decided
to become a candidate and is no
longer testing the waters. In that
case, once the individual has raised
or spent more than $5,000, he or she
must register as a candidate. Intent
to become a candidate, for example,
is apparent when individuals: Make or authorize statements that
refer to themselves as candidates
(“Smith in 2012” or “Smith for
Senate”);
Use general public political advertising
to publicize their intention
to campaign;
Raise more money than what is
reasonably needed to test the waters
or amass funds (seed money)
to be used after candidacy is
established;
Conduct activities over a protracted
period of time or shortly
before the election; or
Take action to qualify for the
ballot. 11 CFR 100.72(b) and 100.131(b). Contribution limits Contribution
limits apply to all the support given
to an individual who is testing the
waters. The limits apply, for example,
to: Gifts of money, goods and services;
Loans (except bank loans);
Certain staff advances until repaid;
Endorsements and guarantees of
bank loans; and
Funds given or personally loaned
to the individual to pay for his
or her living expenses during the
testing-the-waters period. For additional information on
contributions, including current
contribution limits, please review the
FEC’s Contributions brochure. Prohibitions An individual who
is testing the waters must comply
with the Act’s prohibitions. The Act
specifically prohibits money from: Labor organizations (although
funds from a labor separate segregated
fund are permissible);
Corporations, including nonprofit
corporations (although funds
from a corporate separate segregated
fund are permissible);
Foreign nationals; or
Federal government contractors. 11 CFR 114.2(a),(b), and (d),
110.20(a)(3), 115.2. Recordkeeping An individual
who tests the waters must keep
financial records. If the individual
later becomes a candidate, the money
raised and spent to test the waters
must be reported by the campaign as
contributions and expenditures. 11
CFR 101.3. The money raised and
spent for testing the waters must be
disclosed on the first report the principal
campaign committee files. Separate bank account Although
this is not a requirement, an individual
who tests the waters may
want to consider segregating testing-the-waters
funds from personal
funds by setting up a separate bank
account for the deposit of receipts
and the payment of expenses. If the
individual later becomes a candidate,
a campaign account must be
established to keep campaign funds
separate from anyone’s personal
funds. 11 CFR 102.10, 102.15,
103.2, 103.3(a). Organizing a testing-the-waters
committee. An individual may
organize a committee for testing the
waters. An exploratory committee
or a testing-the-waters committee is 
not considered a political committee
under the Act and is not required
to register with the FEC or to file
reports. The name of the testing-the-waters
committee and statements
made by committee staff must not
refer to the individual as a candidate.
Thus, for instance, a testing-the-waters
committee may be named “Sam
Jones Exploratory Committee,” but
not “Sam Jones for Congress.”
If the committee’s activities go
beyond the testing the waters and
the committee begins to campaign,
the committee must register with the
FEC. The funds raised during the
testing-the-waters phase automatically
become contributions, and the
funds spent, including polling costs,
become expenditures. These contributions
and expenditures count
toward the threshold that triggers
candidate status. Once the contributions
exceed $5,000, the individual
becomes a candidate and must
register under the Act. To download
registration and reporting forms,
please visit the FEC webpage for
“Forms for Candidates and Authorized
Committees.” If an individual decides not to run
for federal office, there is no obligation
to report these finances, and the
donations made to the testing-the-waters
committee will not count as
contributions. Further information on organizing
a campaign committee can be found
in the Campaign Guide for Congressional
Candidates and Committees
[PDF].
 Author
          Stephanie Caccomo


Read next: Testing the waters for possible candidacy (2017)
 Related: Help for candidates and committees »


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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