Setting Up a Political Action Committee (PAC) and a Bank Account

As a first-time candidate, you’re likely overwhelmed by the sheer amount of information out there. With so many moving parts it’s easy to get lost in the weeds. Having been in your shoes — twice — here’s practical advice on why setting up a Political Action Committee and a dedicated bank account are essential first steps.

What a PAC is, and why you need one

A political action committee, or PAC, is a special kind of non-profit organisation that lets individuals or organisations pool resources in support of political candidates. It’s a separate legal entity created for the purpose of political action.

Setting one up lets you:

• Pool your own funds with those from supporters
• Accept donations from individuals and organisations, subject to limits
• Use that money to fund campaign expenses
• Create transparency around your campaign’s finances
• Make required campaign finance reporting far easier

You might ask how this differs from setting up an LLC or a corporation. The difference is that federal and state governments make PACs extremely easy to set up, with very little paperwork. LLCs and corporations need organising documents, bylaws and other legal filings. A PAC can usually be created from a template supplied by your Secretary of State.

In Pennsylvania you can create one with two template documents — three pages total — using the Political Committee Registration Statement. They even provide a completed sample showing you how.

Why you need a bank account for it

Separation of funds. Keeping personal and campaign money apart avoids conflicts and misunderstandings. Most states — and the federal government — prohibit commingling, so a separate account is probably required where you are.

Easy record-keeping. Reconciling one account is far simpler than moving between personal, business and campaign accounts. That matters when reporting deadlines arrive.

Professionalism. Asking someone to donate to your city council campaign and then asking them to write a cheque to your personal account is sketchy. An account in the PAC’s name says you’re running a clean campaign.

How to set them up

1. Choose an entity type. Federal or state-level PAC, or both. This depends on where you’re running and what expenses you’ll incur.
2. File the necessary forms with your state’s election commission or Secretary of State. Most states have online forms. Check with them or your local elections board.
3. Get your EIN. An Employer Identification Number is like a social security number for organisations. You need it to open the bank account.
4. Open the account. Not every bank will open political accounts — choose one with experience in campaigns. Make sure the account name matches the PAC’s official name. Ask your local party or an elected official where they bank.
5. Set up online banking, so you can track expenses, pay bills and transfer funds.
6. Get printed cheques and a debit card. Some vendors only accept cheques, others only take cards. When you need something fast — and you will — waiting days for the bank to post something can be the difference between getting the last mailer out and missing your deadline.

A few more things to keep in mind

Keep it simple. Don’t overcomplicate things with too many accounts or entities. Focus on what matters — winning the election.

Be transparent. Setting up a PAC — and sometimes simply being a candidate — triggers required financial compliance reporting on a fixed schedule. Know those deadlines. Failing to file can bring fines, and in some cases removal from the ballot.

Plan ahead. Don’t leave this to the last minute. Give yourself plenty of time before campaign season starts.

Running a successful campaign takes more than a good message and a catchy slogan. It takes careful planning, strategic execution, and a solid financial foundation. Get the PAC and the bank account right early, and you’ve built the base everything else stands on.