campaign finances

Remember these:

  • Set up a campaign account and take care of bookkeeping.
  • Draw up preliminary campaign budget.
  • Create a financing plan and make a list of places to ask support for the campaign. 
  • Write a support request for all actors mentioned in the financing plan.
  • Examine the rules and restrictions governing campaign financing.

Money is not Everything, but it Does Help

Money does not make or break the election. However, it is difficult to campaign without it. Successful campaigning does indeed require resources. The most important resources are volunteer work and available money.

Most of the money goes to gaining visibility. Although some of the voters can be reached with face-to-face contacts, the rest must be reassured though various media platforms and with electoral materials. These all cost money. Finances are then essential part of any campaign. Taking good care of the campaign finances is also the key for the success of all other operations. 

This chapter discusses the practical arrangements of campaign finances, planning of revenue and expenditure, fundraising, and regulations governing campaign financing.

Study the Basics

Campaign financing is based on two main rules:

  1.   Plan ahead: without a reasonable plan, you cannot use money reasonably.
  2.   Monitor in real time: record all incomes and expenses as they occur.

The most important tool in planning is the creation of a sound campaign budget. You should draw it up right at the start of the campaign. If the circumstances during the campaign change (for instance the campaign receives a significant donation which allows more extensive use of money), do not hesitate to change the plans. It is only bad if you don’t plan at all. 

Real time monitoring is as important as planning. If you do not keep track of the invoices and donations, you cannot know how much money you still have available. In these cases, campaigns often go over their budgets. Monitoring the money traffic is also essential for the openness of Green campaign finances: all candidates should be ready to disclose their campaign incomes and expenses before the election day.

Campaign Account and Taxes

It is important to keep the campaign money separate from your personal (private) incomes and expenses. Each campaign should therefore have a separate campaign account through which you handle all campaign related incoming and outgoing money traffic. It is where all donations are directed and from where all election bills are paid. In this way you can monitor all money use of the campaign straight from the account statement. If you use your own money for the campaign, you should transfer them to the campaign account. It is crucial that only election related money go through the campaign account and that all election related money (except direct cash payments) go through the campaign account.

After the election, if necessary, all candidates that are required to file campaign funding disclosures (check the election regulations later), must be able to indicate, with the campaign account statement (or similar), that the information given to the authorities in the campaign funding disclosure, are accurate.

If the campaign account is under the name of the candidate, the tax authority interprets that the campaign is part of the candidate’s private finances and therefore they need to pay gift tax for the received donations (maximum of 5 000 euros from the same person during three years). In addition, fundraising without compensation can be interpreted as professional activity in which case you need to pay taxes for it.

If the campaign account is under the name of the support group (for example Finance Manager or person responsible for finances), the tax authority interprets that the campaign is a non-profit corporation or association and therefore you don’t have to pay gift or income taxes.

Finance Manager

You need someone in your campaign to take care of its finances. The responsibilities of this Finance Manager include:

  • Records the revenue and expenditure of the campaign.
  • Makes sure that the campaign budget is actualized accordingly.
  • Pays the bills and takes care of all practical finance matters.

The Finance Manager must pay the bills on time, store all receipts, and record all expenses to the budget monitoring. You do not need official bookkeeping. The Finance Manager should take care that the campaign incomes (for example donations and money from campaign product sales) are recorded correctly and quickly before they are forgotten. Moreover, the Finance Manager takes care of the cash funds of the campaign. It is a good idea to have a concrete cash fund, a small money box or at least big enough money purse.

You need to figure out how the Finance Manager takes care of the bills and bookkeeping in your campaign. It is a good idea to direct all bills to the Finance Manager who has online banking codes to the campaign account. The candidate should never have to be the Finance Manager of their own campaign. Particularly in larger campaigns, the candidate should be able to focus on the voters, not on paying bills and recordings money traffic. 

Single-entry bookkeeping

The law does not require double entry bookkeeping from electoral candidates, so campaign finance management is quite straight forward. You can choose the form of you bookkeeping yourself – it is enough that all money traffic is clearly recorded. You can use the bookkeeping template the Party provides for simple and clear single-entry bookkeeping of common parliamentary and municipal elections. The Finance Manager can use it as tool to record the incomes and expenses of the campaign as well as to monitor the actualization of the budget. We distribute the bookkeeping template in the finance education materials to all candidates during each election. You can also ask for it from the association that put you up as a candidate.

Campaign Budget

A campaign budget is a plan of all revenues and expenditures of a campaign. Both sides are equally important. Far too many campaign struggles to plan carefully what they are about to do and what they can afford doing. On the other hand, if you underestimate the expenditures (or don’t plan them at all) you don’t have enough time to raise sufficient funds. 

It is important to plan the use of money in advance to avoid the so-called election madness. There are cautionary tales of candidates who have made panic solution during the last weeks of elections in the hopes of getting elected. Some have for instance taken bank loans to multiply their campaign budgets. This can easily lead into expensive misjudgments.

Think carefully:

  • What to use money for?
  • How much money you wish to use for it?
  • Where do you get the money from?

You can start by outlining the overall use of money in your campaign: How big campaign are you organizing? How much of your own money are you willing to use? How much money can you get from fundraising? What are you planning on doing and how much does it cost?

You should be ambitious but realistic. Candidacy is an important and honorable part of democracy; take part proudly. If you start by planning too small a campaign, you need to change your plan along the way – so start with a big enough campaign! Still, remember to keep your head clear and try not to overspend.

Budget Structure

It is reasonable to structure your budget according to the classification used in the election funding disclosure that all candidates must file in accordance with the law.

Itemisation of election campaign expenses

  1. Election campaign advertising (only expenses of newspaper columns, broadcasting time, ad space etc. not for example ad production expenses)
    a) Newspapers, free papers, and periodicals
    b) Radio
    c) Television
    d) Information networks
    e) Other media (e.g. organization calendar you buy ad space from)
  2. Outdoor advertising (e.g. street ads, billboards, ads on public transportation vehicles; includes print and delivery costs)
  3. Procurement of campaign newsletters, brochures, and other printed material (e.g. printing and delivery costs)
  4. Planning of advertising campaign (e.g. layout, graphic design, advertising agency costs)
  5. Rallies (e.g. rent, catering, performance fees, travel reimbursements, event posters, and flyers)
  6. Other expenses (e.g. acquisition costs of campaign products, support group meeting expenses, candidate payment)

Itemisation of election campaign funding and contributions

  1. Candidate’s own funds
  2. Loans taken out by the candidate, including unpaid bills at the moment of filing the disclosure.
  3. All contributions for election campaign from
    a) private individuals
    b) companies
    c) a political party
    d) party associations
    e) others.

Income Plan: Where to get Money?

We have focused on planning money usage in the other parts of these guidelines, but we should also plan where to get the money. 

Where can I get more money for my campaign?

Green campaigns don’t deal with shady godfathers nor other secretive election funders. Our electoral finances are open and transparent from the get-go. Our voters can access this information before elections, and we always act accordingly.

Election funding problems of the Greens deal more with the fact that often people do not know how to support the greens financially, even if they support their values and could be ready to support them financially. We don’t know how to give people this opportunity or we don’t know how to ask for money. 

If you wish to raise funds, you need to be ambitious and daring above all. It is likely that there are more people – and possibly even companies, associations, or other parties – who are willing to support a candidate as yourself than you realize. You will receive nothing if you don’t ask.

The most important challenge for a Green candidate is to dare to ask for money for their campaign. It might feel difficult at first: why is my candidacy so important that people would pay to support it? Yet, you should remember that you are not asking for money for your own personal gain – you are asking for money for matters and issues you represent.

Well then, from whom to ask from? At first you should sit down and write a list of all your friends, family members, and acquaintances you could turn to. Contact each and tell them that you are running and that you hope that they will support your campaign. Many of those who do not wish to take part in your actual support group might be ready to donate some money for you. 

Secondly, you need to go through other actors that might be interested in supporting your campaign – for example various green technology companies in your area. There are multiple opportunities. List all your contacts and the contacts of your support group members. Does someone have connections that might help? Similar requests do not work for everyone. Think about how you contact people; what do you tell them, how do you reason with them, what is your tone?

Carefully organized fundraising plan does not end with one contact prior to the elections! Many people will join the support group during the campaign and many potential doners might be ready to donate money for your campaign when the elections are approaching.

Remember the most important expression of fundraising: THANK YOU. Thank everyone personally, if possible. Thank those who have given you their support. 

Fundraising Opportunities

Donations

Organizations, corporations, and private persons can support your campaign by making direct money donations. No amount is too small: “Many little streams make a mighty river”.

If one hundred people donate ten euros each, it already produces thousand euros.

The Party offers a handy donation tool for their candidates to use in their fundraising. You can use this tool for example on your own web pages. You just need to link it to your page and start advertising it. This way you can raise funds straight to your campaign account and the Party takes care of all reporting required by the Money Collection Act. 

It is important to know how to ask even if you are asking for a small amount. Candidates that actively ask for donations are also likely to receive them. If you won’t ask, you won’t get any. Remember that asking personally is always more effective than sending a mass message.

Note that selling campaign products, such as t-shirts, books, or seminar tickets, is fundraising in exchange for something and is therefore treated differently in the eyes of the law than direct donations. Therefore, payments for products cannot be collected with the fundraising tool. They must be paid directly to the campaign account.

Campaign Products

In addition to direct donation, buying campaign products, such as t-shirts, books et cetera is an easy way to show support to a candidate. If campaign products are meant to be a part of fundraising, they need to have sufficient profit margins; profits from selling them must be higher than original costs (rule of thumb: you should get at least three times the money you spend on them in the first place).

From a fundraising viewpoint it is not practical to make products that do not produce clear profits for the campaign. You also need to think about the time and effort used in the planning of the products when you are estimating their profit margins. Think about each product: What is the purpose of this product in my campaign? What do I want to achieve with it? Is it money, visibility among your focus groups, engagement of the supporters or some sort of combination of these?

Fundraising events

Election seminars with expensive tickets are typical examples of fundraising events. Other examples include parties with entrance fees, children’s events, concerts etc. 

A fundraising event should always have a clear concept fitting the candidate profile. For instance, if you wish to organize an election seminar, you need to be already sufficiently well-known as a candidate or you can get famous speakers to perform in your seminar. A fundraising event needs to be interesting enough for the potential participants to loosen up their purse strings. 

On the other hand, if the candidate already has a wide contact network and enthusiastic support group, they can for example organize a campaign launch party for their supporters.

You need to have a realistic plan for the income you are expecting from the fundraising event. Preparations of a successful event require a lot of time and effort (and possibly money) so you shouldn’t proceed if it isn’t reasonable to expect that your concept is good enough.

Voluntary Work

Active support group members can earn some money for the campaign by working together. They can for example volunteer to work on small projects and donate their salaries to the campaign. Cleaning, doing yard work or picking strawberries are for instance suitable tasks. Supporters can put a small group together and look for suitable jobs that require a certain amount of people and time to do them. Then just off to work they can go.

This kind of fundraising should be started early on for everyone has important things to do right under the elections. All support group members are then needed to be reaching out for potential voters, not collecting garbage after a concert for instance. Instead, when there is over half a year before the election, all sorts of joint activities are great for enthusiastic support group members. 

Other Opportunities

Support group members can organize other activities than volunteer work as well if they want to. For instance, they can collect useless household items and sell them in a flea market. This way support group members get rid of useless stuff and the campaign get a nice donation.

Money Collection Permit

According to the Money Collection Act, you need a money collection permit when money is collected without compensation by appealing to the public. “Public” here means an indefinite group of people not limited in advance. You do not need a permit for a collection carried among those participating a public meeting arranged indoors, or for emailing your support group members or asking money from your relatives, friends, or acquaintances for example in a form of a personal letter. However, you do need a permit if you are asking people to donate money on the streets, web pages, newspaper ads, and brochures. 

The Greens have a money collection permit that enables fundraising for candidates’ campaigns. Donations to all candidates are directed to a collection account of the Party and transferred from there to each candidate’s campaign account. This kind of fundraising occurs via a donation page that operates under the money collection permit of the Party. When a candidate has delivered their campaign account number to the candidate register of the Party, they will receive their own donation page.

When Do I Need a Money Collection Permit?

You DO NOT need a permit:

  • for asking money privately from your relatives, friends, and acquaintances
  • for asking money on an email sent to the support groups
  • for collecting contributions in closed events
  • for receiving donations without asking
  • for selling campaign products (selling products is a mean of funding, not fundraising).

You NEED a permit:

  • for asking money publicly, for example on social media, brochure, newspaper ad, web page, or blog.
  • for any activity in which money is collected without compensation by appealing to the public.

Election fundraising can be carried out without a money collection permit. The organizer of the fundraising must then be a party association or an organization acting solely in the interest of the candidate, and the raised funding must be used to cover the costs of the candidate’s election campaign. In addition, the fundraising must occur over a period starting no earlier than six months before the election day and ending no later than two weeks after the election day.

You always need do settlement of accounts to the National Police Board. If you use the donation service of the Party you do not have to think about separate reports of fundraising.

Campaign Funding Legislation

Every green candidate and Campaign Manager need to know the following law and restrictions and follow them consciously. We have been forerunners in the promotion of better rules – we have an obligation to be such hereinafter as well!

Contribution Limit

Single donor cannot contribute more than 3 000 euros in municipal elections, more than 6 000 euros in parliamentary elections or more than 10 000 euros in European Parliament elections.

Commercial Payer Information

In accordance with the law, each candidate must take care that all paid commercials and ads that are part of candidate’s campaign must indicate the commercial payer information. The purpose of the Act is to increase the transparency of election funding. You should give the commercial payer information in all cases. In practice, this means that you place a small unnoticeable print at the lower edge of the ad, for instance: “Commercial paid by the candidate.”

Disclosure Obligation

Before early voting begins, each candidate should file an election funding disclosure of their incomes and expenses so that their election funding is transparent, and the voters can evaluate it before they reach their decision. However, only elected candidates and alternate members are required to file election funding disclosures after the elections.

Publicity of Donors

Publicity of donors depends on the elections and the amount of money donated.

Each individual campaign contribution and its donor must be published if the value of the contribution exceeds 1000 euros in parliamentary elections or European Parliamentary elections. In municipal elections this amount it 800 euros. Donations are calculated cumulatively, so if several smaller donations under 800/1000 euros exceeds the 800/1000 limit, the donation must be made public.

You can publish even smaller donations if you ask for a permission from the donor (this is obligatory if the donor is private person, and it is correct in other situations as well).

Forbidden Support

The candidate is not allowed to receive support from donors they do not know (exceptions: small-scale product sales and box fundraising and other small-scale fundraising methods). Moreover, the candidate is not allowed to receive support from public bodies (government, municipality, joint municipal authorities or their business establishments/corporations, student associations or Kela, the Social Insurance Institution of Finland etc.). They can receive donations from abroad only from private persons.

Campaign Period

The campaign period spans from six months before the election day to two weeks after it. All expenses during this period are campaign expenses regardless of when the bills are paid. For instance, campaign commercial published during the campaign period forms a campaign expense even though it would be paid three weeks after the campaign. The money used to pay these expenses are part of campaign finances regardless of whether they were obtained during the campaign period. Donation to the campaign is a donation to the campaign even if it is made seven months before the elections.

Campaign Account

When you sign your candidate agreement you commit to open a campaign account through which all your campaign incomes and expenses are transferred. The campaign account can be under the name of the candidate, in which case the campaign is part of their private finances. If you wish that the tax authority interprets that the campaign is a non-profit corporation or association that does not have to pay gift or income taxes, you should place the campaign account under the name of your Campaign Manager, Finance Manager or someone else from your support group, or from local party association.

You can find more information the pages of Oversight of Election Campaign and Political Party Financing.