Practice Makes Perfect – 2010 Corporate Best Practices Study

There are many established principles of best practices relative to political action committee accountability, ethics, governance, finance, programming and public disclosure. While the culture of each political action committee is different, every organization should use some form of these principles as a guide for strengthening effectiveness and accountability.

During March 2010, Sagac Public Affairs put these principles and the corporate PAC community to the test by conducting one-on-one phone and internet-based interviews with representatives of numerous Fortune 100 companies in America. Interviewees received a series of questions that produced industry benchmarks for certain principles and industry best practices.

Governance
A PAC’s board of directors is responsible for defining the mission and for providing overall leadership and strategic direction to the PAC. Each PAC board should: 1) actively set policy and ensure that the PAC has adequate resources to carry out its mission; 2) provide direct oversight and direction for the staff executive and be responsible for evaluating his/her performance; and 3) evaluate its own effectiveness as a governing body, and as a representative of the company in upholding the interests served by the PAC.

78% of corporations have written roles and responsibilities for the PAC Board members

74% of corporate PAC boards assist directly in raising funds.

Planning
PAC planning sets the overall direction, activities and strategies a committee employs to fulfill its mission. PACs have a duty to engage in sound planning, define a clear vision for the future, and specify strategies, goals and objectives for plan implementation. Planning should incorporate input from constituents and should be intentional and ongoing to successfully position the PAC to achieve its goals.

74% of corporate PACs have a written mission statement.

69% maintain strategic goals and objectives for their PAC.

Only 57% have a written, annual plan of action for fundraising and participation.

Transparency and Accountability
PACs have an ethical obligation to their constituents to conduct their activities with accountability and transparency a PAC should regularly and openly convey information to constituents about it’s mission, activities, accomplishments and decision-making processes. Information from a PAC should be easily accessible to its donors and should create external visibility among the eligible class to create trust in the organization.

97% provide information regarding the PAC’s mission, activities, accomplishments and decision-making to employees.

This information is communicated through:
82% Online and Email
36% Group Meetings
32% Direct Mail
27% Other
9% Telephone

1

65% issue an annual PAC report, with 80% making the report available to all eligible employees.

Among PACs that issue an annual report, it is distributed through:
87% Online and Email
40% Other
20% Group Meetings

2

65% of corporate PACs maintain specific standards of practice for fundraising efforts.

These standards include:
73% How to solicit contributions
40% How to record contributions
47% How to report contributions
67% How funds are used

3

Fundraising
PAC fundraising should be conducted according to the highest ethical standards with regard to solicitation, receipt, recording, reporting and use of funds. PACs should adopt clear policies for fundraising activities to ensure responsible use of funds and open, transparent communication with contributors and other constituents.

70% of corporate PACs do not allow donors to earmark funds for candidates and parties.

Objections mentioned by employees toward donating to a corporate PAC include:
65% “Economy and economic concerns”
48% “Did not know about the PAC”
39% Other
35% “Have not been asked to contribute”

13

The average PAC participation rate by employee position within company:
93% Officers
65% SVP
51% VP
16% Director
12% Manager
5% Other

4

The average annual PAC contribution by employee position within company:
$3,180 Officers
$2,374 SVP
$1,140 VP
$569 Director
$248 Manager

14

70% have donor clubs and/or giving levels for PAC contributors.

Corporate PACs provide recognition for donors including:
87% Thank-you letters
44% Donor clubs
17% Recognition pins
17% Certificates or awards
17% Public recognition

15

Effective corporate PAC communications tools include:
91% Email
70% Newsletters
65% Group Meetings
52% Brochures
48% Annual Reports
17% Other
4% Company Magazine

16

Fundraising activities implemented by corporations include:
95% Payroll Deduction
78% One-on-one Solicitation
74% Email Solicitation
52% Special Events
52% Membership Drives
22% Direct Mail
17% Other

5

The percentage of PAC receipts coming from these fundraising activities include:
79% Payroll Deduction
50% Membership Drives
10% One-on-one Solicitation
10% Direct Mail
8% Email Solicitation
8% Special Events

6

The following methods are used to identify potential PAC donors within corporations:
70% Online Communications
39% Existing Donor Recommendations
22% Direct Mail
22% Regional Recruitment Events
22% Other
9% Event at Annual Business Meeting

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Financial Management
PACs have an obligation to act as responsible stewards in managing financial resources, must comply with all legal requirements, should adhere to sound accounting principles that produce reliable financial information, ensure fiscal responsibility and build trust. PACs should use financial resources to accomplish its mission in an effective and efficient manner and should establish clear policies and practices to regularly monitor how funds are used.

100% of corporate PACs maintain clear policies and accounting practices to regularly monitor the use of funds.

78% administer receiving, caging, depositing and recording of PAC contributions internally, while 22% outsource these accounting functions.

48% prepare, review and approve FEC and state ethics reports internally, while 52% outsource these reporting and filing functions.

Decision-makers for critical PAC processes within corporations include…

Requesting Contributions:
18% Treasurer/Asst. Treasurer
23% PAC Director
5% General Counsel
23% PAC Board
5% Accounting and Finance
27% Head of Gov’t Relations

7

Approval of Contributions:
14% Treasurer/Asst. Treasurer
5% PAC Director
55% PAC Board
27% Head of Gov’t Relations

8

Disbursement of Contributions:
36% Treasurer/Asst. Treasurer
27% PAC Director
14% PAC Board
23% Head of Gov’t Relations

9

Human Resources
The ability of a PAC to make effective use of the energy, time and talents of its employees and volunteers is essential to accomplish the organization’s mission. PACs should exercise fair and equitable practices that attract and retain qualified volunteers and employees. Each PAC should establish specific policies and practices for employees, volunteers and other constituents so they can effectively work together to advance the organization’s mission.

The average size of corporate PAC staff working on PAC functions within corporations is:
57% 1
22% 2
17% 4
4% 3
0% 5 or more

10

Job responsibilities of PAC staff within a corporation include:
30% Other
24% Lobbying
21% Fundraising
20% Caging and Cashiering
16% Contribution Request and Recommendations
15% Compliance and Reporting
8% Grassroots

11

Evaluation
An essential responsibility of every PAC is to assess the impact of its actions and to act upon this information. PACs should regularly measure performance against a clear set of goals and objectives, such as revenue and participation, in addition to meeting deadlines and exceeding desired outcomes for elections. PACs should share this information with constituents and use it to continually improve the quality of processes, programs and activities.

78% of corporate PACs assess the impact of actions annually.

The metrics to assess annual impact of corporate PACs include:
100% Funds Raised
94% Number of Donors
83% Growth Over Prior Cycles
50% Per Capita Contribution Growth
17% Other
11% Cost to Fundraise

12

A qualitative study of top corporate political action committee professionals fielded February 9 – March 8, 2010, Sagac Public Affairs, LLC.

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