Is Your Family Business Getting Political? 5 Things to Consider <i>Before</i> Donating to Political Candidates and Political OrganizationsThe First Amendment broadly protects political speech, and every citizen has a fundamental right to participate in the political process, including making contributions to political candidates and political organizations. However, like any fundamental right, political speech has its limits. Political contributions are heavily regulated by governments and public perception, and you and your family business should consider the following before making a political contribution.

1. It is better to ask for permission than forgiveness.

Campaign finance laws (laws that regulate and restrict political contributions) vary greatly by jurisdiction, and restrictions on political giving can come in many different shapes and sizes. In particular, donors should always be mindful of whether there are applicable contribution limits, prohibitions or disclosure requirements when making a contribution. Penalties for violating these rules can be very significant, including potentially hefty fines and, in rare instances, incarceration. Depending on the circumstances, making a political contribution can even result in canceling a government contract or making a contractor ineligible to bid on government contracts in some jurisdictions. Accordingly, it is critical that donors do their own due diligence or seek counsel to confirm that their political contributions are compliant with the applicable rules before making a contribution.

Also, note that you should not rely solely on a candidate’s or fundraiser’s word that a proposed contribution is OK. They do not represent you and do not always know how the rules apply specifically to you or your business.

2. You are the company you keep.

When you contribute to a candidate or a political organization, you are expressly endorsing them. You may be supporting them for a very specific reason, but you are generally associating yourself and potentially your business with that candidate or organization when you make a contribution. Accordingly, it is critical to seriously vet all political contributions, especially if it is a political organization.

Further, the world of campaign finance is generally very transparent. Despite what you may have heard about “dark money” in politics, there are very few options, if any, to effectively participate in elections confidentially. You should assume that any political contribution that you make will either be reported in a public filing or will otherwise be discoverable by the general public and the media. Accordingly, if you are concerned about being associated with a candidate or an organization – think twice before you contribute.

3. Never reimburse a political contribution.

Although political laws vary from jurisdiction to jurisdiction, one rule is consistent everywhere – it is illegal for an individual or entity to reimburse another individual or entity for making a contribution to a political candidate. Not only is it a violation of campaign finance laws, it is a felony in most jurisdictions. While most campaign finance violations will not result in jail time, this is one violation that could. Simply put, never pay or reimburse anyone for making a political contribution.

4. Give with no strings attached.

Never make a request of a candidate or officeholder when making a political contribution. Similarly, never mention a political contribution when making a request to a candidate or officeholder. Political giving and lobbying requests should not be made contemporaneously. Not only is it frowned upon and makes most candidates and officeholders uncomfortable, it could be a crime depending on the circumstances. There is a time for lobbying and making requests, and there is a time for fundraising. Those times are never the same.

5. Elections can affect you and your business.

Participating in elections and supporting candidates makes a difference. Not only is it a fundamental right, but supporting certain candidates and political organizations can often be in the best interest of both you as an individual and your business. There are risks with everything you do in life, but the risks involved with making political contributions can be mitigated.