If you’ve announced your candidacy or are considering a run for office, chances are you’ve put together a platform and have evaluated your chances of winning -- but have you considered all of the financial and operational logistics awaiting your campaign?
This is where a good treasury department steps in to strategically manage your money and respond to incoming compliance concerns.
I’ve seen how campaigns often underestimate the amount of work involved with treasury management and compliance. Don’t let sloppy campaign finances undermine your campaign’s message or occupy all of your resources. As the 2014 midterm elections ramp up, here are five important steps for staying compliant throughout the election cycle:
1. Choose your credit card processor wisely. Credit card processing companies have become more prevalent in recent years. Cash-strapped campaigns tend to focus more on affordability than on what information processors are actually collecting. Low transaction costs are important, but it’s essential that your campaign collect specific donor data with every transaction.
At the minimum, your credit card processor should collect the employer, occupation and address data of the donor and joint donor, if applicable. Source code and fundraiser fields are also important tracking tools for your fundraisers. Your donation page should also display relevant disclaimers and terms in accordance with state and/or federal election law to protect your campaign from non-compliant transactions or credit card disputes. Most importantly, choose a processor that allows you to export donation data directly into your donor database. Collecting quality data from the onset will benefit your campaign’s fundraising outreach and will ease the reporting process.
2. Standardize your batching and caging process. A comprehensive and efficient process for securely collecting, verifying, depositing, and archiving donations is crucial in a fast-paced campaign environment. Not only does your treasury department perform the administrative function of manually recording and archiving donations, it also flags non-compliant donations and subsequently conducts necessary correspondence. An efficient batching and caging process will give your campaign access to funds faster, which allows key decision makers to react swiftly to fundraising numbers, make informed spending decisions and strategically allocate resources.
3. Reconcile, reconcile, reconcile. The next step after depositing donations is reconciling the deposits to bank statements. This is another activity that campaigns often overlook, but it’s crucial for maintaining financial accountability. Pledged dollars and actual dollars aren’t the same thing: A properly managed cash flow is essential to making wise spending decisions. Reconciling bank statements on a monthly basis also ensures that your reports won’t be flagged by the FEC for inconsistencies.
4. Responsible and strategic expense management. Does the same person on your campaign submit expenses, write checks, and balance the books? One way to get your campaign in a lot of trouble—both legally and financially—is to yield these responsibilities to one individual. Stories of campaign embezzlement or debt frequently make headlines. Separating access to key job functions and internal spending controls such as a multi-layered approval process will protect against unauthorized transactions. Moreover, keeping spending on budget will guarantee that your campaign will have the funds to be competitive through November 4.
5. Administrative continuity. Win or lose, when the campaign is over, everyone scatters – with the exception of your treasury department. This is when any unresolved issues that were swept under the rug for the past eight months reemerge. Who are you going to trust with outstanding bills, expense reimbursements, tax filings, or lost rental cars? Your treasury department is involved for the long haul—so you want a team that understands not only the quick ramp up of your campaign, but the interim operation as well.
Bradley T. Crate is the founder and CEO of Red Curve Solutions, a full-service treasury and compliance firm for campaigns and political organizations. In addition to serving as the chief financial officer for Romney for President and Romney Victory, Bradley has been the treasurer and assistant treasurer to numerous statewide, federal and presidential campaigns. A version of this post appeared on The Red Curve blog.