What Are Allocations & How Do I Use Them?

Some political organizations conduct both state and federal political activity and have separate arms to do this. In these cases, they’ll have one political committee registered with the FEC and one registered on the state level. This is most common for state and local party committees, but PACs can also do this.

When an organization has these two affiliated committees, they will have some expenses or fundraising that need to be shared between federal and non-federal filers. Typically it is expenses that are shared, but sometimes there are contributions (monetary and in-kind). Those expenses will be paid out of the federal account, then the state account will reimburse the federal account. There are a lot of rules on what is okay to share and what is not. Be sure to review the FEC rules regarding allocations carefully.

The Allocations option under the Accounting tab allows you to track, report, and properly enter allocation transfers between the two accounts.

What are the Allocation types?

The expenses can be one of these Allocation Types:

• Administrative
• Direct Candidate Support 
• Direct Fundraising
• Exempt
• Public Communications
• Voter Drive 

The following 4 types are only used by Party Committees that have Levin Accounts.

• Generic Campaign Activity (Levin)
• GOTV (Levin)
• Voter ID (Levin)
• Voter Registration (Levin)

Some of the above Allocation Types have fixed ratios, depending on the type of election year the Allocation is used for.

• If both a presidential candidate and a Senate candidate appear on the ballot: 36% 
• If a presidential candidate, but not a Senate candidate, appears on the ballot: 28%
• If a Senate candidate, but not a presidential candidate, appears on the ballot: 21%
• If neither a presidential candidate nor a Senate candidate appears on the ballot: 15%

Fixed Allocation Types are:

• Administrative
• Exempt
• Generic Campaign Activity (Levin)
• GOTV (Levin)
• Voter Drive
• Voter ID (Levin)
• Voter Registration (Levin)

The other 3 Allocation Types (Direct Candidate Support, Direct Fundraising & Public Communication) have a variable ratio and can be set as appropriate.

In ISP you can create allocations for use with transactions as well as indicate the Allocation Transfers from a non-federal account to a federal account to pay for the non-federal share of activity. Allocation activity is reported on the various Form 3x Schedule H sections. 

Allocations usually need to be created each year or election cycle and reported on the first filing that period. 

How do I create an Allocation?

First, be sure your database is set up for Joint State/Federal Filing. Also confirm both the State and Federal Committees have Filer Committees set and each have at least one Financial Account. Once this has been confirmed, you can add Allocations to the database.

Select Allocations under the Accounting tab. On the resulting page, you’ll see any already existing Allocations showing. To add a new Allocation, click the Add Allocation button at the bottom of the screen. In the window that appears, complete the necessary fields.

Allocation Type: There are a number of different Allocation Types possible depending on the activity. The most common Allocation Type is Administrative.

Fixed Allocation Ratio: For most Allocation Types you will have several different fixed ratios to pick from. These ratios are set, depending on the type of federal elections going on that year. 

Once you have an allocation created, you will see the allocation information listed on the Allocations page. To the far right next to the letter i is a stacked line icon. Mouse over that and you can see the totals of transactions using this allocation. If this is your first allocation, it will be all zeros. After adding a transaction with an allocation, you can come back here and see the impact applying an allocation will have.

How do I use an Allocation?

Typically, Allocations are used on expenses. On rare occasions they are used on in-kind or monetary contributions. Our help file on Prohibited Inkind Contributions For Allocable Activities covers this.

When adding an expense, ensure the expense is associated with the Federal filer and you select the appropriate Allocation. When allocating for fundraising, allocations are used on contributions to determine the allocation percentage.

How do I add Allocations to transactions?

After creating one or more allocations, you will see a new Allocation drop-down field available when entering transactions. Whenever you select an Allocation in the dropdown for a transaction, you are telling the system this is a transaction that needs to be on the Form 3X as allocated between federal and state funds. Only select an allocation if the transaction needs to be reported as shared. Otherwise, this field should be blank.

How do I indicate an Allocation Transfer of Funds?

In addition to reported shared activity via allocations, you can also record and report allocation transfers from a non-federal financial account to a federal financial account to pay for the state share of any disbursements.

To add an Allocation Transfer, navigate to Accounting, then to Allocations. To the right of the Allocation, click the blue Add Allocation Transfer button you want to record a transfer for. A popup will appear with some fields that are very similar to an Internal Transfer transaction. Enter the details of the transfer, including the financial account the funds are going to and where they are from. This will create an Allocation Transfer transaction that will show on the register. In the non-federal financial account, it will appear as money out and in the federal financial account, it will appear as money in. This is the only type of transfer transaction that is reportable between financial accounts.