How to Obtain Political Action Committee (PAC) Status

If you are a political organization and you are interested in increasing revenue, look no further than obtaining Political Action Committee (PAC) status. Obtaining PAC status is not an easy thing to do; let me be very clear in that. Everyone is always hearing and talking about PACs but no one quite seems to know exactly what PACs are.

Political Action Committees are basically non-profit political groups that raise and give money to politicians or for a political cause. Almost every major politician has a PAC specifically designed to take in campaign contributions.

There are two different classifications for PACs: State PAC or a Federal PAC. State PACs are for classifications of organizations that do political activities strictly on a state level and a federal PAC is for organizations that do political activities on a nationwide scale. For example, a U.S. Congressional candidate would set up a federal PAC for obtaining campaign contributions while a small political group would set up a state PAC. Interestingly enough, you can chose to be both a State and Federal PAC.

Before you fill out any paperwork, I strongly recommend that you talk to people from the Federal Elections Committee if you want to set up a Federal PAC or you talk to members of the Democratic or Republican Party for setting up a state PAC. There is a great deal of paperwork that you need to fill out before you can get registered as a PAC. For Federal PACs, you have to send a form to request recognition as a PAC. That form can be found on the FEC website.

In terms of setting up the bank account for your organization, it can get a little complicated. You should go over with your bank all of the necessary fees involved and what exactly you will be charged for in terms of transaction fees and minimum balance fees. For example, the Bank of America requires that you maintain a minimum balance daily of $3,000.

Additionally, the bank account that you set up as a registered PAC has to be set up as a business account. This also explains why you have to maintain a minimum balance amount. Therefore, if you set up both a state and federal PAC, you have to have $6,000 total sitting in 2 bank accounts that you won' t be able to touch. If your bank account balance at any given point during a month is below $3,000 then you will be charged a fee by the bank.

There are some other fees involved as a PAC and as a business account holder. You will need to pay another fee to the bank if you deposit more than $500 in cash on any given day and there are several other fees involved as well, depending on the bank you set up the account with during the year.

Another thing you will have to keep in mind that as a PAC, you have to keep and file every receipt for expenditures and revenue taken in. All of these receipts are then sent to the Federal Elections Committee.

The benefit to being a PAC is that you can gain more money in the long run by obtaining money from political organizations that only give to other PACs. PACs can also endorse a politician and give them money as well.