Ask the Expert - Corporate Contributions to Charities and Scholarships - State and Federal Communications

March 16, 2023  •  

Ask the Expert – Corporate Contributions to Charities and Scholarships

Q: As a registered lobbyist, I am often contacted by elected officials to make a corporate contribution to the officials’ charity of choice, foundation, or scholarship fund.  Is this legal?  Am I required to disclose these contributions on my lobbying reports?

A: This scenario is happening more and more every day.  Even though the official does not derive direct, political contributions for his or her campaign, such charitable contributions nonetheless result in positive exposure for the official, goodwill by the lobbyist, and beneficiaries that include the underprivileged, the sick, and the elderly.  Furthermore, the monetary amount of corporate charitable donations can surpass the amount of permissible political contributions under campaign finance law.

Most states allow a lobbyist’s employer to make charitable contributions at the behest of an elected official and there are no reporting obligations.  Some of the other jurisdictional requirements include:

FEDERAL:  Pursuant to House and Senate Rules, charitable contributions made by a registered lobbyist at the behest or designation of a legislative member or employee are prohibited, unless the member or employee has designated the contribution to a charitable organization in lieu of an honorarium.

Please note, however, a charitable organization established by a person before that person became a covered official and where that covered official has no relationship to the organization after becoming a covered official, is not considered to be established by a covered official.

CALIFORNIA:  Payments may be made at the behest of a state elected officer for a charitable, legislative, or governmental purpose.  The state official must report the payment.

CONNECTICUT:  If a client lobbyist makes a charitable contribution at the behest of a public official, the contribution generally will be deemed to have been made to foster goodwill with the public official and hence to constitute an expenditure in furtherance of lobbying. If deemed in furtherance of lobbying, the expenditure must be reported on the client lobbyist’s ETH-2D report as lump sum under “Other Expenses.”

DELAWARE:  Charitable contributions made at the behest of an official are required to be disclosed on lobbying reports. A charitable contribution made at the behest of a legislator must be reported as a gift. If the amount is over $50, it must be itemized and the specific legislator must be named. A notation may be made if it was a donation to a charity.

NEW YORK:  A state official may not designate or recommend a third party to receive a gift, and no prohibited gift may be offered to, or received by, a third party under circumstances in which it would be reasonable to infer the gift was intended to influence a public official. In other words, an interested source is presumptively prohibited from giving a gift to a third party, even a charity, at the behest of a public official.

A gift offered on behalf of or at the designation or recommendation of a public official is only permissible if, under the circumstances, all of the following criteria are met:

It is not reasonable to infer the gift was intended to influence such public official;

The gift could not reasonably be expected to influence the public official in the performance of his or her official duties; and

It is not reasonable to infer the gift was intended as a reward for any official action on the public official’s part.

NEVADA:  Charitable contributions are reportable if made in the legislator’s name. A registered lobbyist is required to report the total expenditures made to any other person on behalf and for the benefit of a legislator.

Continue Reading

State and Federal Communications, Inc. provides research and consulting services for government relations professionals on lobbying laws, procurement lobbying laws, political contribution laws in the United States and Canada. Learn more by visiting stateandfed.com.

Sort by Month