The research is in!
Stakeholders are demanding that corporations take an active role in solving social and economic problems through their business strategies. Trade associations cannot afford to sit on the sidelines while their members are looking for enhanced advocacy on their behalf. A focus on enhancing your association’s political action committee (PAC) activity is an effective way to show members you are defending their interests and maximizing impact. But, compliance is key. Noncompliance with Federal Election Commission (FEC) guidelines could have negative effects on your association’s finances, public image, and future membership development. Understanding the regulations surrounding your political action committee’s solicitation practices will help to effectively project your members’ voice, and to advocate for their interests on a state and national level.
Understanding your solicitable classes
Incorporated traded association political action committees may solicit two separate classes in order to raise funds:
- Restricted class: This includes executive and administrative personnel of your trade association and their families, non-corporate members and their families, and, with prior approval, corporate members’ executive and administrative personnel, stockholders, and families of both. Members of this class may be solicited at any time, and they may contribute up to $5,000 per donor, per year.
- Expanded class: This includes your association’s non-executive and non-administrative personnel and their families. They may only be solicited twice per year, and they may contribute up to $5,000 per donor, per year.
What constitutes a solicitation?
A trade association must be very careful that its communication to its expanded class does not constitute a solicitation for contributions. A clear call for donations is only the most obvious solicitation a trade association can make. Others include:
- Publicizing the committee’s right to accept an unsolicited contribution
- Providing the solicitable class with information on how to contribute to the committee
- Language encouraging support of the committee
Political action committees are an effective way to show your members that you are in their corner and advocating for their industry, but using this strategy requires effective communication between your marketing and membership development team and your finance team. A clear understanding of the rules and regulations established by the FEC should not be taken lightly. Your association should plan carefully and have competent advising to ensure you make the most of your fundraising efforts and opportunities to advocate for members.
If you have questions regarding your trade association’s political action committee, solicitation practices, or building strategies to effectively advocate for your trade association members, contact Will Donahue or one of our experienced trade association advisors today at 301.231.6200.