Mandatory drafts from Chapter dues disbursements for each Chapter’s IFAPAC administration fair share contribution began in 2021, withholding $7 per member annually from monthly dues disbursements (or $3.50 per member for State and Local Chapters). The IFAPAC administration fair share contribution will increase annually by $1 per member until the Chapter fair share contribution is 40% of IFAPAC’s operating costs.
What is the “IFAPAC Administration Fair Share Contribution”?
The IFAPAC Administration Fair Share Contribution is the amount each Chapter pays to fund a portion of the costs necessary to operate IFAPAC. The 2024 contribution will be $10 per member annually and will be paid by drafts from monthly Chapter dues disbursements. (A Chapter’s contribution will be $5 per member annually for those members who belong to a State and Local Chapter.)
What are the IFAPAC’s operating costs?
IFAPAC serves as the collecting agent for both the federal PAC (NAIFAPAC) and every State Chapter PAC, all of whom together comprise IFAPAC. IFAPAC operations include NAIFA staff to process every transaction and attend to all pay-to-play and compliance requirements for all states regarding all IFAPAC receipts. IFAPAC operations also cover the costs of all bank and credit card processing fees for IFAPAC contributions. Administering IFAPAC – one of the largest political action committees in the insurance industry and the collecting agent for 51 state PACs – has expenses including staffing, donor database management software fees, donor recognition materials, solicitation, PAC mailings (printing and postage), meetings, marketing/promotional materials, customized election reports, target lists, overhead and other additional expenditures.
It’s essential that 100% of the political (hard) dollars raised by IFAPAC is used to support candidates for elective office, not for operating expenses.
Why don’t National dues cover IFAPAC administration costs?
National dues cover a large portion of IFAPAC administration costs. The costs covered by the national portion of dues include staffing, donor database management software fees, donor recognition materials, mailings, marketing/promotional materials, customized election reports, credit card fees, overhead and other expenses that benefit both NAIFA and every Chapter.
Why should the Chapters cover a portion of these costs?
All Chapters must help fund a portion of the costs to administer IFAPAC because all Chapters benefit from the operation of IFAPAC. Since 1968, IFAPAC has requested that Chapters help pay for IFAPAC administrative expenses. Not all Chapters did so, or they responded in an inconsistent manner. The mandatory per member fee treats all Chapters equally and ensures that IFAPAC receives a fair share of its administrative funding from all NAIFA Chapters, who each benefit from IFAPAC’s operation.
How is the per member fee calculated?
Each Chapter’s full fair share fee is $12 per member annually (or $6 for those members who belong to a State and Local Chapter). This amount is 40% of IFAPAC’s annual operating costs, net of the federal PAC’s share of member administrative contributions, divided by the number of members. The 2021 fee was decreased to $7 to give Chapters time to allocate funds in their budgets for this expense.
Why isn’t a portion of the Chapter contribution shared back to the state PAC’s administrative account?
The fair share contribution amount is limited to an amount that should be manageable for Chapters while also helping to cover a fair portion of IFAPAC costs. It is estimated that Chapter fair share contributions in 2021 funded only 24% of IFAPAC’s operating costs (net of a portion of individual member administrative account contributions). The remaining 76% of the funding needed to cover the costs to administer IFAPAC will come from contributions from NAIFA’s operating account.
Consideration was given to returning a portion of the IFAPAC Administration Fair Share Contribution to Chapters for their state PAC administrative accounts. However, it was decided to limit the contribution to only that amount to be used to administer IFAPAC to make the contribution amount more manageable and so that each State Chapter can determine for itself what amount it needs to administer its state PAC by budgeting for these costs in the Chapter’s annual budget.
Will State Chapters continue to receive a portion of individual member administrative contributions?
Yes. Any member whose contribution to IFAPAC is deemed administrative will still be shared back with the member’s State Chapter administrative account if the member’s Pay-to-Play Rule Directive allows for sharing.
When did this program go into effect?
January 2021. The NAIFA Board approved this program in 2019, but delayed its implementation until 2021 to allow time for preparation and prioritization.
How and when will the Chapters pay their fair share?
Beginning in 2021, a Chapter’s fair share was deducted from monthly dues disbursements. If a member pays an annual amount, the full $7 was deducted in the month of payment. If a member pays monthly or for a portion of a year, a prorated amount of the $7 was deducted based on the number of months the member has paid for. The 2024 contribution will be $10 per member annually and will be paid by drafts from monthly Chapter dues disbursements. (A Chapter’s contribution will be $5 per member annually for those members who belong to a State and Local Chapter.)
How many years will the per member contribution increase?
The Chapter per member annual contribution amount will increase by $1 per year until the Chapter fair share contribution is 40% of IFAPAC’s operating costs. Forty percent of IFAPAC’s operating costs is currently $12 per member.
Why is it important to raise administrative dollars?
Administrative funds allow for 100% of political dollars to be spent on candidates. In states that allow candidates to accept soft dollars, this is an additional source of funds to support candidates.
Administrative funds help cover the operating costs allowing for creative and interactive fundraising events/campaigns and recognition opportunities.
How can a Chapter raise administrative dollars?
Chapters can raise administrative dollars by asking members to contribute directly to the administrative fund from their business or personal accounts. All contributions written from business accounts are treated as administrative contributions and are shared with state administrative accounts when such sharing is permitted by member Pay-to-Play Rule Directives.
Chapters can host administrative specific fundraising campaigns, such as a ring toss, silent auction or other activities with proceeds designated specifically for administrative dollars.
Chapters can also contribute general funds directly to IFAPAC in addition to the payment of their Administration Fair Share Contribution.
In states where administrative dollars can be used to support candidates, can a Chapter transfer funds directly to its State PAC from its general treasury in order to help support candidates?
Yes, but funds can be transferred in this manner only in states where administrative dollars can be used to support candidates. In such states, Chapter general treasury funds can be directed to the Chapter’s State PAC to support candidates. Where permitted, such contributions do not count towards the state‘s fair share fundraising goals and the State Chapter is required to track any limits that apply to those contributions.
How will a Chapter know how much is being paid to IFAPAC each month for its fair share contribution?
The disbursement report a Chapter receives every month will show each member’s dues payment in one column and the fair share contribution amount in another column, with totals for both. Based on this report, a Chapter can appropriately record dues payments, and the fair share contribution expense. The amount disbursed will be the net of the dues payments minus the fair share contributions.
Can a Chapter pay its fair share contribution in a different way than having it withheld from the monthly dues disbursement?
No. We would like to accommodate payment requests that differ from withholding the fair share contribution as part of the dues disbursement, but we are unable to administer such exceptions. Each month we process over 10,000 dues payments and our system doesn’t allow us to make exceptions to the general rule.
A Chapter who wishes to cover their fair share contribution from their PAC’s administrative fund, and whose state law allows this, can reimburse their operating account from the PAC administrative account based on the contribution total in the disbursement report.
How should a Chapter budget for their 2024 administration fair share contribution?
The best way is to multiply the budgeted number of members for 2024 by $10 for members who do not belong to a Local Chapter, and by $5 for those members who do belong to a Local Chapter. The calculation is an estimate based on the projected number of members who will pay their dues in 2024.
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