Legal Insight and Litigation

Get the Biggest Bang for Your Association’s Political Buck!

The strategy of most Trade Associations is to advance shared issues and industries through pooling members’ resources. Nothing impacts those issues and industries more directly than elected officials and the campaigns that bring them into power.  A Political Action Committee (PAC) can serve as an effective advocacy tool to maximize member resources and support political candidates who are more likely to support and vote on your association’s initiatives, or even promote specific policy initiatives and action items directly.

PACs come in multiple forms, and numerous options are available to an organization depending on its goals and budget. No association is too large or too small to benefit from such an effective advocacy tool, and by establishing the right type of entity, your association can effectively educate and support policymakers on key member issues.

There are some caveats, of course.  Both the Federal Election Campaign Act and Kentucky state election laws largely prohibit trade associations and similar membership organizations from directly contributing to political candidates, political party committees, and political action committees (PACs).  They may, however, make independent expenditures, contribute to the non-contribution accounts of Hybrid PACs, contribute to Super PACs, and establish separate segregated funds (SSFs), all of which are defined below:

• Independent Expenditures are payments for communications that openly advocate for the victory or defeat of a clearly identified candidate, but that are not coordinated with the candidate, or his or her party. These expenditures may take the form of advertisements that suggest how a viewer should vote, an online video that advocates for a certain hot-button political issue, or even a bumper sticker, as long as a reasonable person might interpret it as advocating for or against someone or something in a political context.
• Hybrid PACs are structured with two separate accounts - one for making direct campaign contributions in connection with federal or state elections (depending on the PAC’s registration), and one for making independent expenditures as defined above. While the former is subject to legal limits and prohibitions, the latter may accept unlimited contributions from individuals and organizations.
• Super PACs are independent expenditure-only committees.  Super PACs can raise and spend unlimited funds from individuals, corporations, and labor unions, as long as they do not contribute to or coordinate with a candidate or party.
• Separate Segregated Funds (SSFs) allow labor unions and corporations, including trade associations (organizations generally prohibited from making direct or coordinated contributions in connection with federal or state elections) to establish political organizations through a governance structure and bank account maintained separately from the entity’s board and treasury.  SSFs may contribute directly to candidates’ campaigns, as well as make independent expenditures.

Large or small, a PAC is a targeted tool to make your association’s voice heard on the issues that matter most to your members.  The complexities of how to legally raise and spend money, however, can be difficult to navigate without an experienced and knowledgeable hand to guide you.  Don’t miss out on the game-changing benefits of a PAC - call McBrayer Law today, and we’ll help make it manageable.

Anne-Tyler Morgan is a Member of McBrayer law.  Her law practice primarily focuses on politics, elections, and campaign finance, nonprofit institutions and associations, foster care and adoption, administrative law, healthcare law, pharmacy law and transactional healthcare and transactional agreements. Ms. Morgan can be reached at atmorgan@mcbrayerfirm.com or (859) 231-8780, ext. 1207. 

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This article does not constitute legal advice.