Advisory Opinion 06-05

     A candidate has asked for guidance regarding the establishment of an Internal Revenue Code 501 (c) (3) organization and whether donations to the organization are contributions to the candidate.

     The issue addressed by this advisory opinion is an area of growing national concern.  This involves the establishment of an Internal Revenue Code section 501 (c) (3) charitable organization by a candidate or an agent of the candidate.  The concern is potential access to the candidate with no concomitant disclosure reporting.  Thus, to avoid the attribution of donations as contributions to the candidate, the Commission recommends:

(a)  There should be no reference to the candidate’s candidacy.

(b)  There should be no appeals for funds for the candidate’s campaign, including no solicitation, making, or acceptance of campaign contributions.

(c)  The candidate should have no role in the expenditures of the donations.

(d)  The purpose of the non-profit organization should not be to influence or promote the candidate’s nomination or election.

(e)  The non-profit organization’s name should not contain the candidate’s name.

(f)  The candidate should not be a board member of the non-profit organization.

     This list is not exhaustive, as all facts and circumstances are considered to determine whether donations to the 501 (c) (3) organization established by the candidate or the candidate’s agent are contributions to the candidate.  It is important to keep matters that could influence the candidate’s nomination or election at arm’s length from the candidate’s non-profit pursuits.

     The Commission expresses no opinion regarding any tax ramifications of the proposed activities because those issues are not within its jurisdiction.

     The Commission provides this Advisory Opinion as a means of stating its current interpretation of the Hawaii Campaign Spending laws provided under HRS section 11-191, et seq. and the administrative rules of the Commission provided in chapter 2-14, Hawaii Administrative Rules. The Commission may adopt, revise, or revoke this Advisory Opinion upon the enactment of amendments to the Hawaii Revised Statutes or the adoption of administrative rules by the Commission.

Dated: Honolulu, Hawaii, July 13, 2006.


Paul Kuramoto

Steven E. Olbrich
Vice Chairperson

Gino Gabrio

Dean Robb

Michael E. Weaver