In my two prior posts in this series, I discussed first whether an organization can take a position and/or work to defeat or support a ballot measure, and second, what §501(c)(3) organizations need to think about when working on these issues. Now, I will begin to touch on the state regulatory rules that Minnesota organizations have to think about.*
The Minnesota Campaign Finance and Public Disclosure Board is the entity that is responsible for overseeing lobbying and campaign spending in Minnesota. This includes work being done for/against ballot measures. Whether an organization should be reporting to the CFPDB and what they should be reporting depends on what specific activities the organization is conducting.
Chapter 10A, the statute that governs campaign finance rules in Minnesota, states that the filing threshold is met when an association (I use this word here to refer to any incorporated/unincorporated group engaging in a campaign) is met when the association has received or spent $100 for the campaign. However, the CFPDB has released guidance that states that they will not enforce penalties for failing to register unless an association reaches a $5,000 threshold. An association then has up to 14 days after reaching that threshold to register as a political committee or fund.
So -- the first thing to think about is whether an organization has made $5,000 dollars in expenditures on a ballot question (as understood in the statute) and/or whether they have collected $5,000 in contributions (as defined in the statute).
What is an expenditure?
An expenditure to promote or defeat a ballot question is one that: (a) expressly advocates the adoption or defeat of a ballot question measure, or; b) is susceptible to no other reasonable interpretation other than as an appeal to vote for or against a ballot question. Depending on the specifics of the transaction, an expenditure could be considered as an in-kind contribution to a registered political committee or fund (and thus not apply toward the $5,000 limit that would trigger registration requirements). The CFPDB has issued guidance in that area and organizations that want to coordinate with a registered committee or fund (versus conducting activities on their own) could do so in order to avoid registration for reaching the expenditure threshold (although after $5,000 in contributions, the donor association is subject to underlying source disclosure rules).
What is a contribution?
The statute defines contribution as “money, a negotiable instrument, or a donation in-kind that is given to a political committee, political fund, principal campaign committee, or party unit.” A political fund comes into existence when an organization begins collecting dues or contributions for the purpose of using those funds to promote or defeat a ballot question. The political fund itself does not have to even be a separate account; it is merely an accounting mechanism that tracks contributions raised for that purpose. As with registering a fund for expenditure purposes, the same guidance as referenced and linked to above applies to registering a fund for contributions received – organizations will not be penalized until they meet the $5,000 threshold.
Campaign finance rules prohibit associations from accepting (and keeping) anonymous contributions in excess of $20. If a contribution exceeds $20, the statutes require that the association track the name, address of the source of the contribution, and the date that it was received. Once contributions exceed $100 or more in a year from any one source, the association should additionally track the employer (or occupation if self employed) of any person or association that has made contributions (in aggregate) at that level.
For organizations whose major purpose is not to support or oppose a ballot question, it is important to track whether the contributions you are collecting are being donated to your general fund, or whether they were raised with the intent from the donor that they be used for the organization’s work on the ballot questions. Those amounts raised for the organization’s general activities do not have to be accounted for within the association’s political fund (although they are potentially subject to underlying source disclosure if the association makes contributions out of that fund). If the contributions were collected on the basis that they would be used in part for use on the ballot question, and in part for the organization’s general work – then the contribution can be allocated. The contributions can also be allocated between ballot questions (and a separate fund is then kept for both).
Organizations making contributions
Even if an organization does not trigger registration requirements on either of the above – it might still have to disclose the underlying sources of its own contributions to a political committee or fund. Assuming the contributions made by an organization meet the definition of contribution in the statute (i.e., they are not expenditures) --- once the contribution level of the organization reaches $5,000, then the organization is required to disclose the underlying sources of the contribution whose allocable portion of the contribution meets or exceeds $1,000. The statute provides several ways to do this – which can include allocating it among all donors to try and minimize/eliminate reporting needs – or allocating it all to certain donors (assuming they agree to this allocation).
*The discussion above is meant primarily for organizations who are not taking a particularly active role in advocating for or against a ballot question. While many of these same rules apply to organizations that are devoting significant resources to the effort, there may be other issues not addressed above. I highly recommend that those organizations consult with competent counsel.