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

As a first-time candidate for public office, you’re likely feeling overwhelmed by the sheer amount of information out there on how to run a successful campaign. With so many moving parts, it can be easy to get lost in the weeds. But fear not! As someone who’s been in your shoes (twice!), I’m here to give you some practical advice on why setting up a Political Action Committee (PAC) and creating a bank account are essential steps for any first-time candidate.

What is a Political Acton Committee and Why Do You Need One?

A political action committee, or PAC for short, is essentially a special kind of non-profit organization that allows individuals or organizations to pool their resources together in support of political candidates. In essence, it’s a separate legal entity created just for the purpose of political action.

By setting up a PAC, you’ll be able to:

• Pool your own funds with those from other supporters
• Accept donations from individual donors and corporations (subject to certain limits)
• Use that money to fund your campaign expenses
• Create transparency around your campaign’s financial procedures
• Make required campaign finance reporting much easier to do.

You might be asking, “Craig, how is this different than setting up a ‘regular’ company like an LLC, or a C-Corp?” Great question. The difference between most PACs and other corporate structures is that the Federal government and individual states make PACs extremely easy to setup, with very little paperwork required. Companies like LLCs and corporations require organizing documents, bylaws, and other legal documents. PAC’s can usually be setup with a template doc from your state’s Secretary of State.

For example, in Pennsylvania, you can create a PAC with two template documents – a total of 3 pages – with the Political Committee Registration Statement template. They even provide a sample already filled out to show you how to do it for your race.

Why You Need a Bank Account for Your PAC

Okay, so now we’ve got our PAC set up – what about the bank account? A dedicated bank account is crucial for any candidate. Here’s why:

• Separation of Funds: By having separate accounts for personal and campaign expenses, you’ll avoid any potential conflicts or misunderstandings. Most states (and the federal government) do not allow commingling of personal and campaign funds, so a separate bank account is probably required in your area.
• Easy Record-Keeping: With a dedicated bank account, it’s much easier to keep track of your income and expenses – essential for reporting purposes (more on that later). It’s much easier to account for what’s coming in and going out when you have to reconcile just one account and not go back and forth between multiple personal, business, or campaign accounts.
• Professionalism: Having a professional-looking bank account with your PAC’s name on it shows voters you’re serious about running a clean campaign. Asking someone to donate to your campaign for city council, but then asking them to write you a check to your personal bank account is sketchy!

How to Set Up Your PAC and Bank Account

Now that we’ve covered the why, let’s get down to business! Here are some step-by-step instructions for setting up your political action committee and its associated bank account:

1. Choose an Entity Type: Decide whether you want to set up a federal or state-level PAC (or both!). This will depend on where you’re running and what kind of campaign expenses you’ll be incurring.
2. File the Necessary Forms: You’ll need to file paperwork with your state’s election commission or secretary of state’s office, depending on which level of government you’re targeting. Don’t worry – most states have online forms that make it easy peasy! Check with the Secretary of State or local elections board for their paperwork.
3. Get Your EIN (Employer Identification Number): This is like a social security number for businesses and organizations. You’ll need this to open your bank account.
4. Open Your Bank Account: Not every bank will let you open political bank accounts. Choose a reputable bank with experience working with political campaigns. Make sure the account name matches your PAC’s official name, and don’t forget to get an ATM card or debit card (just in case you need it). Check with your local political party or elected official on where they bank.
5. Set Up Online Banking: This will make it easy for you to track expenses, pay bills, and transfer funds online.
6. Get printed checks AND a debit card: Some vendors will only accept checks and some will only accept online/debit/credit purchases. When you need something quick (which will eventually happen on your campaign) you don’t want to get stuck waiting for the bank to send you something. Waiting a few days for a check to arrive can mean the difference between getting that last mailer out the door or missing you deadline to mail.

A Few More Things to Keep in Mind about PACs and Political Bank Accounts

As someone who’s been around the block a few times, I’ve learned that setting up your PAC and bank account early on can save you (and your campaign) a world of headaches down the line. Here are some additional tips to keep in mind:

• Keep it Simple: Don’t overcomplicate things by trying to set up too many accounts or entities. Keep it simple, and focus on what matters most – winning that election!
• Be Transparent: Make sure your bank account is transparent (i.e., easy for voters to see where their money’s going). This will help build trust with your supporters. Setting up a PAC (and sometimes just being a candidate for public office) will trigger required financial compliance reporting on a regular schedule. Make sure you are aware of those filing deadlines. Not filing required reports can have serious repercussions including fines and even being kicked off the ballot.
• Plan Ahead: Don’t wait until the last minute to set up your PAC or bank account. Give yourself plenty of time to get everything in order before campaign season kicks off.

Running a successful political campaign takes more than just a good message and some catchy slogans – it requires careful planning, strategic execution, and (of course) a solid financial foundation. By setting up a Political Action Committee (PAC) and creating a dedicated bank account, you’ll be well on your way to building the kind of strong, sustainable campaign that can help you achieve victory.

And remember, if you’re thinking about running for office and need help with your setup, checkout our online course: How to Launch a Winning Political Campaign, which teaches you everything you need to do in the first 30 days of setting up your campaign, including setting up a PAC, bank account, creating your message, and finding the voters you’ll need to win!