George Farrell
BlakPac Chair
That is the question.
What is BlakPac? What s a PAC? What is a Super PAC? Does your campaign or organization need a PAC? It's complicated.
The BlakPac Alliance Network, which contains a PAC and a 501(c)4 can
receive unlimited funds from donors and make IE to a candidate or make
cash contribution to candidates and PAC's, or unlimited cash
contribution to a Super PAC. If your campaign has large donors and want
to concentrate on winning, it is best to use BlakPac and save the
organization and compliance cost required by state and federal agencies. The best time to have this discussion is during the exploratory phase of your campaign. Both Ben Carson and Jeb Bush used the exploratory phase to raise tons of funds. After your official announcement, your campaign donation are limited by local and federal regulations. Consult BlakPac soon.
The only entity allowed not to disclose donors and do political
independent expenditures ( IE ) is a 501(c)non-profit, including a
501(c)4. The 501(c)4 only disclosures its donors to the IRS but that
info is not disclosed to the public. It is confidential and not
available through the Freedom of Information Act.
All other PAC's, including Super PAC's must disclose donors.
The
key restriction on the 501(c)4 is that the political IE must not make
up or be the primary purpose of the non-profit. The Internal Revenue
Service is vague about how they determine “primary purpose” but our
legal team recommends spending no more than 40% on IE. Its an open
question if we can average the spending in the two years of an election
cycle or if each year is looked at separately by the IRS.
The reason a Super PAC is needed on top of the 501(c)4 for large
campaigns is that there are many IE expenditure disclosure reports that
need to be filed and it is easier to file those from the Super PAC than
the 501(c)4. It also adds another layer of protection of the donors as
the IE will be done by your PAC and not by the 501(c)4. Both of them are
allowed to receive unlimited contributions and make unlimited IE, and
both are required to disclose their IE's. Usually those disclosures are
big lump payments to Public Relations Companies, Pollsters or one stop
shops of campaign consultants. The 501(c)4, if it is a corporation, can
make unlimited cash contributions to a Super PAC. Also, besides being
able to give unlimited IE's, the PAC can also make cash contributions
within the normal PAC limits of $2,700 per election cycle, and can
receive unlimited cash contributions from not just the incorporated
501(c)4 but others also These donors must be disclosed to the Federal
Election Commission .
The Cost of your own PAC
The BlakPac Alliance
Network fees are $3,500 for establishment of each entity , the 501(c)4
and the PAC (both should be corporations), plus the cost of maintenance
and compliance for each, There is an annual fee of $3,500, for the
5019(c)4, to file the annual IRS 990 reports and the state corporation
reports; and for the PAC, $1,500 monthly for the filing of the FEC
receipts and disclosure reports, this increases to $2,500 in the last
six months before the 2016 election.
If your campaign budget is less than, $50,000, it's best to use
those funds in the campaign and not forming and maintaining a PAC. Your
large donors can work through BlakPac without coordinating with your
campaign. Certain conduct is “deemed” as coordination such as sharing
staffs or office space or vendors.
The non IE activities of the 501(c)4 must comprise the main
purpose of the 501c4. Many of the IRS and FEC guidelines on PAC's
are not clear. Alvin Jones and our legal team are available to
discuss these and other issues. Like we said, It's complicated.
www.blakpac.com
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