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Political Giving, Like Charitable Giving, Raises Special Year-End Issues

12.18.2012

Just as the end of the year can be a good time to make charitable donations, it can also be a good time to make political contributions for those who give frequently in federal elections.

The federal campaign finance laws cap the total amount that an individual may give to all federal candidates and committees combined during a two-year period. The current period began on January 1, 2011 and will end on December 31, 2012. This cap is above and beyond the limits on what each individual may contribute to any one candidate or committee.

Inside-the-Beltway professionals call this the "individual biennial aggregate limit." But it is really two separate caps. The first cap is on the total amount one may give to all candidates for federal office, such as president, U.S. senator or U.S. representative. During 2011–2012, that limit is $46,200. The second cap is on the amount one may give to all other federally registered political committees combined, such as political party committees or PACs. During 2011–2012, that limit is $70,800, but no more than $46,200 of it may be given to committees that are not national party committees. Thus, to take full advantage of the limit, one must give at least $24,600 to the national parties over the two-year period.

The individual biennial aggregate limits do not apply when giving to so-called "super PACs," which only make independent expenditures. Nor do they apply when giving to entities not required to register with the Federal Election Commission, such as campaigns for nonfederal offices like governor or state legislature, or most nonprofit organizations.

Because of the biennial aggregate limits, someone who expects to give often to federal candidates for the 2014 elections may want to give to some of them now, before the new year starts. This is because a contribution made in 2012 will count toward the individual donor's 2011–2012 limit, while a contribution made in 2013 to that same candidate for that same election will count toward the donor's 2013–2014 limit.

There are other reasons, too, why a donor in some cases may want to give before January 1, 2013. Under Federal Election Commission (FEC) rules, political party committees and PACs raise funds under a per–calendar–year limit. Thus, for example, a donor could give $5,000 to a federal PAC on December 31, 2012 and then give another $5,000 to that same PAC on January 1, 2013 without making an excessive contribution.

The contribution limits under campaign finance laws are very complicated and can be a trap for the unwary. The FEC has said that individual donors are responsible for their own compliance with the individual biennial aggregate limits. Someone who gives frequently to political candidates and causes may find it worthwhile to develop a program, in consultation with private counsel, to manage his or her political giving, just as he or she would consult with a personal planning attorney or tax accountant before making charitable contributions.

© 2012 Perkins Coie LLP