Gifts made from Political Acton Committees (PAC) or as a result of a PAC matching program are not considered or counted as gifts to UT/UT Foundation. Monies received will be considered non-philanthropic and recorded as such in ANDI. Organizations and individuals will not receive legal or recognition credit for any monies received and no fundraising campaign or proposal credit shall be granted as a result of this non-philanthropic transaction.
A Political Action Committee isconsidered a 527 organization under Section 527 of the U.S. Internal Revenue Code (26 U.S.C. § 527). A 527-group is organized and operated primarily for the purpose of directly or indirectly accepting contributions or making expenditures, or both, for an exempt function. The exempt function of a political organization is influencing or attempting to influence the selection, nomination, election, or appointment of an individual to a federal, state or local public office or office in a political organization.
Tax-exempt charitable organizations (also known as 501(c)(3) organizations) are specifically prohibited from attempting to influence legislation or participating in political campaigns. For an organization to be tax-exempt it cannot “participate in or intervene in (including the publishing or distributing of statements) any political campaign on behalf of (or in opposition to) any candidate for public office.” Charities, educational institutions, and religious organizations, including churches, are among those tax-exempt organizations restricted. Contributions from PACscannot be classified as charitable and political donations cannot be treated the same way as tax-deductible contributions.
Federal law prohibits companies from donating directly to political candidates, which is why individual employees must voluntarily fund corporate-sponsored political action committees. Companies use matching programs to attract PAC support. PAC Matching Programs will “match” employees’ donations with contributions to charities of their choosing in the same amount that the employee supported the PAC.
The Federal Election Commission has held that corporate PAC matching programs are legal because they “do not provide any tangible benefit to the contributing employee.” Neither the employee nor the company receives a tax-deduction for such gifts. The charitable contribution is not deductible by the corporation because the corporation is receiving a quid pro quo in the form of a contribution to the political action committee. The employee does not receive either property or an economic benefit because of the contribution.