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Law & Policy: Soliciting RPAC Investments from Staff

May 20, 2013

A question raised from time to time by AEs and other association staff involves soliciting association staff to contribute to RPAC.

Most members and AEs involved in RPAC are aware that federal law permits solicitation of RPAC contributions only from members of the so-called solicitable class, and most are also aware that the solicitable class includes members of NAR and their immediate family. But people often overlook the fact that executive and administrative personnel of NAR, and its state and local associations, may also be solicited to make RPAC contributions in the same way, and to the same extent, as REALTORS® are solicited for RPAC.

There is, however, an important distinction between types of staff. Executive and administrative personnel of associations who may be solicited are individuals paid on a salary (rather than an hourly) basis and who have policymaking, managerial, professional, or supervisory responsibilities.

The requirements of the Fair Labor Standards Act can be used to distinguish between personnel who may be solicited and those who may not. This means that those employees who are “exempt” (that is, not entitled to receive overtime pay) are included in the solicitable class, while other employees who must be paid for overtime (“nonexempt” employees) may be solicited, but only in the more limited manner described below.

As noted, executive and administrative association employees may be solicited for RPAC in the same manner as REALTORS®. That is, they may be solicited an unlimited number of times using any form of communication.

As with REALTORS®, however, all RPAC contributions from staff must be voluntary. In particular, association staff may not be required to contribute to RPAC as a condition of employment or entitlement to employment privileges or benefits. And all the usual requirements of soliciting contributions to RPAC apply equally to soliciting association executive and administrative staff. For example, the usual “disclaimer” notice must be included on all written solicitation materials provided to association executive and administrative personnel.

In addition, because a portion of each RPAC contribution is provided to the state PAC in which the contribution is made, all solicitations must also comply with the requirements of state law regarding soliciting state PAC contributions. Thus, even though solicitation of executive and administrative association personnel is permitted under federal law, AEs should be sure to confirm that state law also permits such individuals to be solicited, or to determine and comply with any unique requirements and duties that may apply to solicitation of such association staff.

Nonexempt association employees (those other than executive and administrative employees) may also be solicited to make RPAC contributions, but federal law narrowly limits how they can be solicited. For these employees, there is enhanced concern for explicit or indirect management pressure or coercion to contribute, and the federal restrictions outlined below are intended to reinforce the ability of such employees to contribute in a truly voluntary fashion. Three specific requirements are imposed:

  • Non-executive and administrative association employees may not be solicited for RPAC more than two times per year;
  • They may be solicited only in writing and by mail addressed to their home addresses; and
  • The association soliciting such employees must establish a custodial arrangement operated by a third party that allows such employees to make anonymous contributions. The association must also inform employees being solicited in this fashion of the custodial arrangement and of their opportunity to make anonymous contributions via that custodial arrangement, and further inform them that their employer may not be advised of those who do not make contributions.

A custodian appointed to fulfill this function will typically be a bank or other financial institution. The custodian operating the custodial arrangement must keep records of contributions made and deposit those contributions in a separate account. The custodian must provide to RPAC (or the state PAC as RPAC’s agent) information about contributors, including the identity of contributors of a single contribution in excess of $50 or annual aggregate contributions in excess of $200, and transfer the funds received to the same. Conversely, the custodian may not provide to the employer (the association) information about the identity of contributors of amounts of $50 or less or aggregate contributions of less than $200 in a single year. Note that if an association chooses not to establish and operate such a custodial arrangement, however, RPAC solicitation of non-executive and administrative personnel is prohibited.

Soliciting RPAC investments from affiliates

Another RPAC solicitation question is whether affiliate members may be solicited for contributions to RPAC. Many local associations include in their bylaws one or more categories of “affiliate membership” for individuals or firms involved in business activities related to, but not directly engaged in, real estate, such as mortgage brokerages or title or property insurance firms.

Even if an association’s bylaws provide that such firms qualify for membership (not individuals within the firm, but the entire firm), those firms, because they are in most cases incorporated, are not allowed to make RPAC contributions because of the prohibition against PAC contributions by corporations. If, on the other hand, an association’s bylaws provide for individuals employed by, or associated with, such firms to hold individual affiliate membership in their own names, then they may be solicited for and make contributions to RPAC. Note, however, that these individual affiliate memberships must be established in the bylaws as a bona fide category of membership.

More specifically, Federal Election Commission regulations provide that such individuals are deemed members for purposes of RPAC solicitation if they are obligated to pay dues (of a meaningful, and not purely nominal, amount), or if they have some other “significant organizational attachment to the organization.” Examples of such a “significant organizational attachment” include the right to vote directly or indirectly for at least one individual on the membership organization’s highest governing board; the right to vote directly for organization officers; the right to vote on policy questions where the highest governing body of the membership organization is obligated to abide by the results; the right to approve the organization’s annual budget; or the right to participate directly in similar aspects of the organization’s governance. Individuals that hold a membership that satisfies these criteria may be solicited as often and as aggressively as desired, in the same manner as REALTOR® members.

Conversely, as noted above, affiliate members who are corporations, or affiliates who are not permitted to be solicited for RPAC because their status as members does not satisfy these criteria, may never be solicited to, or make a contribution to RPAC. But corporate affiliate members, or other affiliate members whose membership relation with the association does not satisfy the criteria described above, may contribute to, or make financial resources available to, the association for use in connection with RPAC administration or fund-raising, such as assisting with the costs of a fund-raising event or providing a “prize” to be used at an RPAC auction or raffle (where otherwise permitted by law).

Another related issue raised in connection with soliciting RPAC contributions is what constitutes a “solicitation.” The Federal Election Commission takes a fairly broad view of what constitutes a solicitation. Communications that do not explicitly request a contribution may nevertheless be deemed a solicitation (and therefore subject to the requirements and restrictions described above) if they encourage support of RPAC or facilitate making contributions. Facilitating contributions would include providing information on how individuals may contribute to the RPAC, such as by including in the communication an address to which a contribution could be sent.

Conversely, however, general information about RPAC is not a solicitation. This kind of information would include how much had been contributed to the RPAC in a given period, how many contributors had contributed to the RPAC, the federal candidates supported by RPAC, that RPAC funds are used to support candidates for federal office, or that only certain individuals may be solicited for contributions to RPAC.

RPAC fund-raising programs

Through RPAC’s fund-raising programs, which include the RPAC Partnership program, associations can find a variety of resources to ensure successful fund-raising, such as conference grants, customized marketing brochures, and recognition ribbons. Find these and more at REALTORactioncenter.com.