AO 2018-05: Commercial vendor may offer online contribution processing services to political committees
A commercial vendor may offer two internet-based fundraising platforms to political committees. The first allows users to “round up” the amount of their credit and debit card purchases to the nearest dollar and contribute the difference to political committees. The second allows contributors to pledge small contributions each time a specified event happens, such as a certain hashtag being used on social media.
Background
CaringCent, LLC has elected to be treated as a corporation for federal tax purposes. The company currently provides donation-processing services to non-profit and charitable organizations through two platforms, “Round-Up” and “Micro-Pledge,” and plans to provide the contribution-processing services to political committees through the same platforms.
Through the “Round-Up” platform, a political committee will invite individuals to “round up” their credit or debit card purchases and contribute the difference to the committee. Each time a contributor makes a purchase, CaringCent will tabulate the rounded-up amount as a pledged contribution from the contributor to the political committee.
Through the Micro-Pledge platform, a political committee will invite individuals to pledge contributions every time a specified event occurs, such as when a candidate’s name appears in a tweet made by his or her opponent. Every time the event occurs, CaringCent will tabulate the amount pledged as a contribution from the contributor to the political committee.
At the end of every month, or at alternative times agreed upon between CaringCent and its clients, the company will calculate the total pledged contributions generated through each platform for each contributor and charge the contributor’s credit or debit card for the total amount of the contributions. CaringCent will not exercise any direction or control over the transfers, which will be made according to contributors’ designations. CaringCent will send the money to a merchant account separate from its treasury funds and used solely to deposit contributions to federal political committees. Within one day of charging a contributor’s credit or debit card, CaringCent will process an automated transfer of funds to the recipient political committee designated by the contributor. The company will provide an itemized record of contributions to political committees. CaringCent will deduct a service fee from each contribution before forwarding the contribution to the political committee.
Analysis
The Commission found that CaringCent may provide the proposed services without making a contribution to a political committee.
In advisory opinions 2016-08 (eBundler.com), 2012-09 (Points for Politics), and 2007-04 (Atlatl), the Commission concluded that the provision of contribution-processing services to a political committee by a commercial vendor is not a contribution to the political committee. In these advisory opinions, the Commission determined that commercial vendors rendered services in the ordinary course of business and at the usual and normal charge; forwarded contributions through a segregated account to candidates and political committees; and employed adequate screening procedures to ensure that they were not forwarding illegal contributions. CaringCent’s proposed services satisfied these criteria. As a result, the Commission concluded that CaringCent will be acting as a commercial vendor and its services to political committees will not result in a contribution.
CaringCent will forward all contributions to a designated recipient political committee within 10 days after the contributor’s funds are transferred to their merchant account. Additionally, CaringCent will collect contributors’ names, addresses, occupations, and employers, and provide this information to the designated recipient political committee, along with an itemized record of all contributions to that committee. Consistent with previous advisory opinions, CaringCent will screen for impermissible and excessive contributions. The Commission determined that the proposed contribution-processing services comply with the requirements of the Federal Election Campaign Act and Commission regulations concerning the forwarding of contributions to political committees.
Reporting
CaringCent will not be subject to any registration or reporting requirements, including those applicable to political committees, conduits or intermediaries.
Date issued: April 30, 2018; Length: 7 pages
Citations
Regulations
11 CFR 100.52
Gift, subscription, loan, advance or deposit of money
11 CFR 102.1(d)
Registration of political committees: other political committees
11 CFR 102.8
Receipt of contributions
11 CFR 104.1
Reports by political committees; Scope
11 CFR 110.6
Earmarked contributions
11 CFR 114.2(b)
Prohibition on corporations or labor organizations making contributions
Advisory opinions
AOs 2017-06 and AO 2016-08
Vendor collecting and forwarding contributions to political committees
AO 2012-22
Use of web platform to make contributions to federal candidates
AO 2012-09
Web-based platform to transmit affinity points as contributions to political committees
AO 2007-04
Corporation's proposal to provide online transaction services to political committees