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It’s important to understand the ins and outs of campaign finance when you’re soliciting money to run for a public office. Spending money for purposes it wasn’t intended for, for example could get you in a lot of trouble. If you are considering running for a local office or helping a friend or family member with a bid for election, here are some things to know about campaign finance.
Seek professional help in managing finances.
Even the most grassroots of campaigns should begin with a campaign bank account, campaign website, and proper staffing who understands the legal and financial aspects of campaign management. Trying to make your best guess about how to spend donations can quickly add up to dangerous territory.
There are state and federal laws that mean a campaign account and the proper allocation of funds are important. Before even announcing your candidacy, it’s a good idea to hire a professional accountant instead of your best friend to manage funds. You’ll want someone who understands the tax ramifications of funds with the IRS, how to work within your budget, and more. Mixing your personal bills and bank account with your campaign account is how rookie candidates often land in trouble.
Keep track of the money spent.
After hiring a professional staff who will know the laws in the United States or country you’re running in, be sure to consider all options for securing campaign funds. From grassroots fundraisers to bigger events and rallies, there are many ways to bring both enthusiasm and needed cash to your campaign.
A simple google search for “bridge loan lenders California” or another lender in your area could be an option for funding your campaign. Not all funds need to come from donations and it’s perfectly reasonable to reach out to financial professionals and lenders for help with your business plan and fundraising plans.
During your planning process, don’t be afraid to ask questions. While the campaign ahead will come with excitement, it’ll be important to know things like whether or not you can accept donations from political action committees and more. Some states have caps on how much you can receive from an individual, lender, or corporate donor. In the United States, there are even more rules with federal campaigns and funding. You and your staff experts will need to do your research.
When tracking personal funds versus those meant for your run, be sure to ask about important steps and tax breaks you can take to make the most of those donations. Ask about interim financing once your accounts are separated and be open-minded to what your staff experts are advising. You are in a partnership for the duration of your run. Let them worry about the financing while you work on branding and message. Whatever you do, be sure the person you hire is keeping detailed track of records on all your campaign spending.
Use donations as they were intended.
It should probably go without saying that you can’t use donations for your campaign for things other than as they were intended. For example, using donated funds for planning a wedding instead of public events, signs, or marketing could come with criminal charges and a quick end to any shot you’ll ever have of running for public office again.
Over the course of your campaign, you will likely make many close friends and some will be inclined to make campaign contributions. While this is perfectly legal, it’s an important thing that you clearly put money into the account for which it was intended and never let them bleed over.
A donation for political ads should not end up in the savings account reserved for your wedding ceremony even if it came from a friend. If financial literacy isn’t your strength, it might be best to open a new account for that wedding planning and keeping it as far away as possible from the campaign funding. When in doubt, make that phone call to your financial advisor so you can have peace of mind and worry about the seating chart and guest list on your off time and your political views on how to handle Covid-19 on business days. In short, keep personal and business separate.
In the end, the best way to be safe in how you use campaign finances is to hire a good and experienced campaign manager. You’ll want attorneys and financial professionals you can call too as you move through budgeting. With the right help and expertise on staff, you can concentrate on your messaging and bringing people out to vote for you. Happy campaigning!
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