Know Your Limits: How Much Money Can Your Business Donate To Political Campaigns?

 

As described by The Center For Public Integrity, following the Supreme Court’s ruling in 2010 in “Citizens United”, corporations, non-profit organizations and unions can spend an unlimited amount of money in support or in opposition to a specific candidate or issue. However, before a business donates money in a federal election, the owners should be aware of the amount they can contribute to a candidate, party or political action committee. They should also be aware of how such donations will affect their brand identity.
 
 

 

The super PAC exemption

 
According to the Federal Election Commission, as an individual, you can only donate a maximum of $2,700 to a federal candidate, $5,000 to a political action committee and $33,400 to a national party committee. However, those restrictions do not apply to corporate, non-profit, unaffiliated individual and union donations to Super Political Action Committees. Super PACs are organizations that are allowed to raise an unlimited amount of money from contributors, as long as the super PAC stays within certain boundaries. These organizations differ from traditional PACs in that they cannot give money directly to a candidate, and they cannot coordinate their electioneering efforts with a candidate’s campaign. Practically any individual or organization can form a super PAC and spend millions of dollars to further their PAC’s aims.

 

The dangers of making political donations

 
A company or business leader might be wary of donating to a super PAC because that contribution will be recorded and reported to the Federal Election Commission. The FEC records contributions so that the public can find out who is sponsoring a PAC’s activities. In some cases, this public disclosure can result in negative publicity for the contributor. For example, as pointed out by OpenSecrets.org, both Koch Industries executives, David and Charles Koch, and finance industry magnate George Soros have been criticized for supporting certain politicians or policies through various super PACs. As such, it’s a good idea for owners to consider the possible ramifications that making a political contribution will have on their companies.

 

The benefits of politicizing your brand

 
On the other hand, you could choose to make political advocacy a central aspect of your company’s brand identity. By aligning your business with certain ideologies and causes, you might be able to win the loyalty of certain demographics, especially cause-focused millennials. For example, Orbitz, Kenneth Cole and Absolut Vodka all made it a point to celebrate the Supreme Court’s landmark decision on gay marriage on their respective social media accounts, as described by Business Insider. While pursuing such strategy runs the risk of alienating segments of the market, politicizing your brand identity may give you an edge against businesses with no declared affiliations.
 
 

 
This article was written by Mario McKellop of Examiner.com for CBS Small Business Pulse.
 

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