Political action committees (PACs) have been a staple of the American political system for decades. Traditional connected and non-connected PACs can fundraise for and donate directly to campaigns or candidates. However, they are subject to strict contribution limits.
Super PACs, on the other hand, can raise as much money as they want and aren’t restricted by any spending limits. The thing is, they face a different limitation: being unable to collaborate directly with candidates or their campaigns.
Enter the hybrid PAC, which combines some of the key benefits of other PACs to create a powerful and versatile political donation mechanism. Here’s what you need to know.
What Is a Political Action Committee?
A PAC is an organization that raises money to support candidates or causes. Connected PACs are linked to a specific entity, such as a union or corporation, and they can only solicit donations from members of the entity they are affiliated with. Non-connected PACs can solicit funds from anyone, but they are subject to the same intake and expense limits as connected committees.
Super PACs, formally known as independent expenditure-only committees, can receive as much money as donors are willing to give and spend unlimited funds on independent activities. They can run ads for or against candidates, draw attention to important issues, and much more. However, as mentioned, they cannot directly work with candidates or their staff in any way.
What Makes a Hybrid PAC Unique?
A hybrid PAC, also known as a Carey Committee, combines the features of traditional and Super PACs. It operates as two entities under one umbrella, allowing it to perform functions of both.
As such, a hybrid PAC can donate money directly to candidates as long as it stays within federal contribution limits, a capability that allows the entity to have a direct financial impact on a candidate’s campaign.
At the same time, the committee can also raise unlimited amounts of money to spend on independent expenditures. These independent expenditures can be used to advocate for or against candidates, but they cannot be coordinated with any politician’s campaign.
The Two-Account Approach to Political Donations
Hybrid PACs rely on a two-account hierarchy to maintain compliance with federal regulations. The entity in question must establish a traditional PAC account and report its contributions and expenses in accordance with federal law. The PAC can only give a certain amount to each candidate per election cycle.
The hybrid entity’s Super PAC account is used for independent expenditures. There are no limits on how much money the committee can raise or spend through it; as long as the expenditures are not coordinated with the candidate’s campaign, the committee will be within federal guidelines.
The key is to keep the funds completely separate. Hybrid PAC leadership cannot combine money from the accounts and must conduct extensive reporting on both funds.
Why Use a Hybrid PAC?
A hybrid PAC offers several advantages for entities that want to influence campaigns through independent expenditures while also providing direct support to candidates.
These advantages are as follows:
Flexibility in Fundraising and Spending
One of the biggest benefits of a hybrid PAC is its flexibility. By combining the features of traditional and Super PACs, a hybrid committee gives organizations more options for raising and spending money. They can accept direct donations and give funds to specific candidates or choose to spend Super PAC money on broad advertising campaigns.
Participating in the political process has never been more expensive, with hotly contested state and federal elections being particularly costly to participate in. Hybrid PACs can play a key role in helping candidates gain traction among constituents via direct and independent expenditures.
Ability to Support Candidates Directly
The primary limitation of a Super PAC is that it cannot directly contribute to a candidate. It cannot even collaborate with a candidate’s campaign leadership before running an ad.
Hybrid PACs (at least, the traditional component of the committee) can support candidates directly, thereby allowing organizations to build relationships with politicians and have a more direct impact on their campaigns.
Admittedly, the dual-purpose nature of a hybrid PAC does blur the lines a bit in terms of collaboration, especially if the same person oversees both the traditional and Super accounts. Therefore, if you intend to establish a hybrid PAC, consider placing separate individuals in charge of each account to promote compliance and transparency. You don’t want to incur the ire of the Federal Election Commission (FEC) or tarnish your candidate’s reputation.
Unlimited Independent Expenditures
The Super account of a hybrid PAC, as highlighted earlier, is not subject to federal spending limits. It can allocate as much money as it wants toward independent advertising and voter mobilization efforts. Likewise, donors can give as much money as they wish to a hybrid PAC’s super account. A single person can donate millions without worrying about donation limits.
Strategic Political Influence
Because hybrid PACs can engage in both direct and independent expenditures, they offer a strategic advantage for organizations looking to influence elections and policy. By using both types of spending, a hybrid PAC can support candidates and causes in a more comprehensive and effective way.
While the independent expenditures team may not be able to collaborate directly with candidates, PAC members can work together to maximize the committee’s impact. The point-of-contact in charge of allocating direct contribution funds can provide the super PAC account manager with insights about a candidate’s campaign goals and help guide advertising efforts.
Ensure Compliance With Aristotle
Aristotle is committed to helping political action committees maintain transparency and compliance. Our PAC solutions and consulting services give you the digital tools and knowledge necessary to promote accountability while simplifying complex FEC reporting requirements. Schedule a demo with us today to learn more.
