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Tunnel of water

FEC Issues New Guidance on 501(c)(4) Independent Expenditure Reporting

The Federal Election Commission (FEC) has issued new guidance on the reporting obligations of outside groups, including 501(c)(4) organizations, that make independent expenditures (“IEs”) in federal elections. The need for guidance arose from the federal court decision in Citizens for Responsibility and Ethics in Washington (CREW) v. FEC, which was issued on August 3, and took effect on September 18. As detailed in an earlier eUpdate, the court in CREW v. FEC struck down an FEC regulation that limited the scope of donor disclosure to only those contributions made for the purpose of furthering a specific IE. (That decision was subsequently appealed, but the Supreme Court ultimately let the decision go into effect and declined to intervene.)

With the old regulation struck down and no new regulation to replace it, organizations that make federal IEs and their counsel have been left to determine what contributions need to be disclosed in their upcoming IE reports. The FEC’s new guidance comes at a time when many organizations are preparing to file their quarterly IE reports for the third quarter of 2018, due on October 15.

Disclosure of Contributions

Under the new guidance, a 501(c)(4) organization that made (or makes) IEs aggregating more than $250 in any federal election must, in their quarterly FEC reports, identify each person (other than a political committee) who made one or more “contributions” to the organization during the reporting period if that person’s total contributions exceed $200 in the calendar year. In addition, the organization must indicate which, if any, of those persons made a contribution for the purpose of furthering any federal IE.

This is undoubtedly a much broader disclosure requirement than the one existing prior to CREW v. FEC, covering any person making contributions of more than $200. But while the word “contribution” may seem broad, that word is in fact limiting as a matter of federal election law. To be a “contribution” for purposes of federal election law, a donation (monetary or in-kind) must be made “for the purpose of influencing any election for federal office.” In other words, a gift to an organization that is not intended by the donor to be used to support or oppose federal candidates is not a “contribution” that must be reported in the event that the organization makes federal IEs. Nevertheless, organizations may have a difficult time determining which of their donations are reportable contributions as they prepare their quarterly IE reports.

Safe Harbors for Prior Activity

Importantly for those organizations preparing to file federal IE reports for the third quarter of 2018, the FEC has established two safe harbors: one for IEs made prior to September 18, 2018, and another for contributions received on or before August 3, 2018:

  • IEs made before September 18 can be reported as under the old, pre-CREW rule, which required disclosure of only those contributions made with the purpose of furthering a specific IE. In other words, for the quarterly report due on October 15, 2018, organizations need only report contributions that were made to further the specific IE being reported.
  • Even if an IE was made on or after September 18, contributions that would otherwise need to be disclosed under CREW v. FEC need not be reported if those contributions were received on or before August 3.


Given this new disclosure paradigm, 501(c)(4) organizations that make — or are considering making — IEs in federal elections should consult with their counsel about how determine what is a reportable “contribution”. And donors wishing to support a 501(c)(4) organization without risk of being disclosed on an FEC report should consult with counsel about how to ensure that their donation will not be a reportable “contribution”.

On the other hand, nothing has changed for organizations that do not make IEs in federal races.  Neither CREW v. FEC nor the FEC’s new guidance has any effect on state or local (as opposed to federal) campaign finance disclosure laws.  And an organization that does not make IEs in federal races but does engage in other activities to influence federal elections (such as making contributions to federal super PACs or making “electioneering communications”), is not required to do anything different as a result of the decision or guidance.

This publication is designed to provide accurate and authoritative information about the subject matter covered. It is not distributed with the intent to render legal, accounting, or other professional advice. The services of a competent professional should be sought if legal advice or other expert assistance is required.