Political contributions:What to know before you donate

July 10, 2020
Ike Devji, JD

Medical Economics Journal, Medical Economics July 2020 Edition, Volume 97, Issue 11

What follows are basic answers to some common legal questions about political donations.

The COVID-19 crisis, its intersection with health care policy and how it has personally affected physicians across America have encouraged many doctors to be more politically active.

What follows are basic answers to some common legal questions about political donations. This summary is not specific legal advice and should be treated as a resource for your own compliance and due diligence.

Who can make political contributions?

Individuals and certain specific business entities, including some LLCs and partnerships depending on how those entities are taxed. (But not your “professional corporation”; see details below.) Individuals can contribute to candidates, parties and a variety of political organizations in different amounts. Both minors and adults can give. However, you’re not allowed to give your minor children money specifically to make contributions that you are directing. It needs to be their own money and their choice.

Who can’t?

The list of prohibited donors is long and detailed, so for the purposes of our discussion, we’ll highlight some key details. Campaigns are prohibited from accepting contributions from certain types of organizations and individuals. These prohibited sources are:

Your “professional corporation.” Although law firms, doctors’ practices and similar businesses are often organized as partnerships, some of these businesses may instead be professional corporations. Unlike a partnership, a professional corporation is prohibited from making any contributions because contributions from corporations are unlawful.

Corporations, including nonprofit corporations. (Contributions from a separate segregated fund are permissible.)

Labor organizations. (Funds from a separate segregated fund are permissible.)

Federal government contractors.

Foreign nationals (exception for green-card holders as permanent resident aliens).

Contributions in the name of another.

Can I donate anonymously?

Probably not, at least not directly to a specific candidate and especially if you are donating more than $50 and using any form except cash, according to the FEC.

An anonymous contribution of cash is limited to $50. Any amount in excess of $50 must be promptly disposed of and may be used for any lawful purpose unrelated to any federal election, campaign or candidate.

Federal law requires disclosure of most significant contributions over $200. This includes donors’ names, addresses, occupations and employer information, which then become public record freely available and tracked by the FEC. Many organizations report all contributions to stay on the safe side of disclosure laws.

Federal law requires that all political action committees, political parties and federal candidates disclose any and all contributions received that are over $200. This information, then becomes public record.

How much can
I contribute?

Surprisingly to many, you are most limited in giving money to a specific candidate directly ($2,800) but can make very large contributions ($100,000 plus) to a national party committee account and can give away potentially millions through other methods. The FEC has a very detailed chart that breaks down contribution limits based on the type donor and the type of recipient. Cash (actual currency) contribution limits are most specifically limited by the FEC: A campaign may not accept more than $100 in cash from a particular source with respect to any campaign for nomination for election or for election to federal office.

What is a contribution?

A contribution can take many forms including the following examples:

Direct monetary contributions and personal loans.

In-kind contributions of goods and services offered free or below market rate

Finds obtained through sales, fundraisers and purchases of political items or event tickets.

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