As we head into another campaign season and strive to increase RPAC participation and wisely use advocacy funds, keep these legal considerations in mind to ensure that your fundraising activities and solicitations do not run afoul of state or federal regulations.
RPAC Contribution Limits
Raising RPAC investments is doubly complicated for REALTOR® associations because AEs must follow state and federal campaign finance laws. Federal contribution limits allow individuals to invest no more than $5,000 per year to the National Association of REALTORS® RPAC. State RPAC contribution limits vary from as low as $500 per individual per year in Massachusetts to unlimited individual contributions in a small handful of states including Virginia.
Federal law—and some state laws—prohibit PACs from accepting contributions from corporations. For example, RE/MAX, as a corporation, cannot contribute to NAR's RPAC, but corporate executives, brokers, and agents who are REALTORS® can contribute as individuals. This means you can't accept any contributions to NAR's RPAC from corporations. Any corporate contributions received must be deposited in your state RPAC account only (if allowed in your state, such as Virginia). Remember, there is no longer a percentage of RPAC contributions that you must transfer to NAR.
Federal law requires associations to send RPAC funds they've raised to either their state association of REALTORS® or the National Association of REALTORS® within 10 days (or 30 days if that amount is less than $50). NAR recommends that you forward all RPAC contributions received at the local association, such as those that come in with dues billing, to the state association at least once a week to meet these timelines. According to federal law, you must return all contributions that are not transmitted within the required time frame. No AE wants to return an otherwise valid RPAC investment to a well-intentioned investor with the explanation that he or she waited too long to send the contribution.
Only those in the "solicitable class" may be asked to make RPAC contributions. The solicitable class includes members or REALTOR® association employees at the local, state, or national levels. This means only association members, including individual affiliate members of state and local associations, and the executive and administrative personnel of NAR, state, and local associations and boards, and their respective families, may be solicited to make RPAC contributions. Individuals not in the solicitable class, regardless of their relationship with a state association or local board, cannot be solicited for RPAC investments. Be mindful of your RPAC communications to the general public, especially on social media. Social media RPAC communications may ask people to support RPAC's goals and initiatives, but they may not contain information about how a person may invest in RPAC, nor should such communications link to RPAC investment pages. Limit your public posts to informative RPAC content only, including highlighting RPAC achievements and describing ways in which RPAC benefits REALTORS®.
One-Third Rule Application
Paying for RPAC fundraising events and programs is another area AEs must carefully navigate. Federal law, and most state laws, permit associations to use general treasury money (i.e., dues) to pay for certain RPAC fundraising, thereby allowing associations to save more of their RPAC funds to use for advocacy. Associations can use their treasury money to pay for RPAC event-related food, beverage, venue, and administrative costs. Notably, though, these expenses do not include entertainment or anything else intended to entice RPAC contributions, such as auction items, music, or party favors valued at more than $20 each. These entertainment or enticement expenses must be paid for out of RPAC funds unless the association applies the "one-third rule."
The one-third rule says the association may pay part of the entertainment and enticement costs from the its treasury as long as the amount paid is equal to or less than one-third of the total amount raised at the RPAC event. For example: Your association is hosting an RPAC event with three items for auction (a nice bottle of wine, a dinner at a local restaurant, and a salon visit) and pays a total of $400 for all three items out of the association treasury. The auction raises $1,200 for RPAC, which is three times the amount paid by the association. Therefore, the association does not need to use RPAC funds to reimburse the association treasury. Had the auction raised only $900, then the associations could only fund $300, of the auction items and the PAC would need to reimburse the association treasury for the difference, or $100.
By following these rules, you can do your part in ensuring RPAC's continued success.