A historic presidential election is pushing more and more Americans to make political donations.
But like most things in politics, the rules around donations are complicated. And for everyday people balancing grocery bills and mortgage payments, is giving money to a candidate the best idea? Here’s what you need to know.
How Much Can I Donate?
Joe Biden’s exit from the race drove a surge of donations to the campaign of Vice President Kamala Harris, with many first-time donors opening their checkbooks. That came after the assassination attempt on Donald Trump fueled a flood of endorsements and money to the Republican campaign.
According to the Federal Election Commission, an independent government agency that enforces U.S. campaign finance laws, individuals can only give $3,300 to each federal candidate per election. Since there is both a primary and a general election, the total limit is $6,600.
You could also give to a political action committee, or PAC, which pools contributions and donates those funds to campaigns. The limit for individuals is $5,000 per year. There are several different types, including PACs set up by employers, professional associations, labor unions and advocacy groups. If you’ve already reached your limit for a candidate, donating to a PAC would be an option.
There are also super PACs, which accept donations in unlimited amounts of money for so-called independent expenditures like advertising. That’s why billionaires like, say, Elon Musk can pledge $45 million a month to a pro-Donald Trump super PAC.
If you know that you want to support a specific candidate, giving money directly to their campaign might make the most sense. You can also donate to a political party committee—both Democrats and Republicans have arms that focus on House and Senate races. Donation limits to parties are much higher: An individual can give $41,300 per year that can be used to influence elections.
Can I Afford To Donate?
Before you get out your wallet, it’s important to take a deep breath and consider the state of your own finances, according to Shane Sideris at Synchronous Wealth Advisors.
“It’s easy to forget about this because we’re in this 24/7 news cycle, and you think, ‘I have to be involved,’” he said.
First, consider if you have an adequate emergency fund and if you’re meeting your retirement savings goals. Even if that’s all on track, wait a couple of days—the same as you would before any big purchase—to make sure you’re not just getting caught up in the moment.
Also, donating money isn’t always the best way to have the most impact. If you’re able to volunteer your time and energy, that’s potentially a more tangible and valuable way to help a candidate, according to financial adviser George Gagliardi of Coromandel Wealth Management.
“The efforts out there that are getting people to register and vote are probably the most important of anything if you’re in a swing state,” he said.
Are Donations Tax Deductible?
It’s a common misconception that political donations are tax-deductible, but that’s actually not the case, said Karen Ogden, partner at Envest Asset Management. Whether you contribute directly to a campaign or to a PAC, you can’t write that off on your taxes, according to the Internal Revenue Service.
However, you could donate to a 501(c)(3) organization that is adjacent to politics—maybe they conduct nonpartisan voter registration and get-out-the-vote drives—and that would be tax deductible. The IRS has a handy tool on its website to check if an organization is tax exempt.
What Else Should I Consider?
Make sure donating won’t cause any issues with your workplace. If you don’t know the rules, try reaching out to your human resources department.
“A lot of employers either restrict it or require you to disclose it internally prior to doing it,” Sideris said. “I’ve seen many people get in trouble because of that.”
For example, contractors for the federal government and some people involved in the financial services industry are prohibited from making contributions connected to federal elections.
Also, remember that your donation may be part of the public record. If you donate more than $50, political campaigns must keep a record of at least the amount, your name and your address, which will likely end up on a searchable database like OpenSecrets.org (click on the research tools tab to get to a “donor lookup” function if you’re curious).
How Do I Actually Donate?
Major party candidates all have portals to donate online using credit cards.
The Harris campaign has a function through ActBlue that allows PayPal, Google Pay and Venmo donations. You can also sign up to contribute weekly as the site says “recurring contributions help us create budgets, hire staff and plan ahead.”
Meanwhile, Trump’s website has Google Pay and credit card options, as well as a recurring donation button that signs donors up for monthly contributions.
Not all of your money will necessarily go to a candidate’s fund, of course, since the campaign will pay credit card processing fees. ActBlue, the platform for the Harris for Victory Fund, charges a 3.95% fee on credit card donations, and the donation platform used by Trump’s campaign, WinRed, charges 3.94% on smaller donations.
“You should always do your due diligence to make sure the person you’re sending the money to is legit,” said Chris Diodato, founder of WELLth Financial Planning in Palm Beach Gardens, Florida. If you’re giving to a PAC, he recommends researching what they do through the PAC search portal on OpenSecrets.org.
This article was provided by Bloomberg News.