Charity Fundraising Events
Subject to the restrictions noted below, a Member, officer, or employee may accept an unsolicited offer of free attendance33 at a charity event (House Rule 25, clause 5(a)(4)(C)). This provision extends to charity events such as lunches, dinners, golf or tennis tournaments, races, and cook-offs. The purpose of the charity event provision of the gift rule is to enable Members and staff “to lend their names to legitimate charitable enterprises and otherwise promote charitable goals." 34 The requirements that apply to attendance at such events are as follows.
First, in order to be a “charity event” as that term is used in the rule, the primary purpose of the event must be to raise funds for an organization that is qualified under § 170(c) of the Internal Revenue Code to receive tax deductible contributions. Thus, the mere fact that a donation to a charity will result from an event does not necessarily mean that a Member or staff person may accept from the sponsor an offer of free attendance at, or travel expenses to, the event. An event will likely be deemed a “charity event” for purpose of the rule when the participants or attendees pay an admission fee, and more than half of the fee paid is tax deductible as a charitable donation. When an event has any other format, a Member or staff person considering attending the event should first consult with the Standards Committee to ensure that it constitutes a “charity event” for purposes of the gift rule.
Example 18. Each year a business pays for a golf outing for several of its employees and their guests, and if there are any funds left after payment of expenses, it donates the excess to charity. This outing would not qualify as a charity event for purposes of the rule because its primary purpose is not to raise funds for charity.
Example 19. A lobbying firm wishes to hold a dinner for Members and staff, at which it will announce that the firm has made a substantial donation to charity. The dinner would not qualify as a charity event for purposes of the rule because its primary purpose is not to raise funds for charity.
Example 20. For the same reason, the regular performances of a theater that is organized under § 501(c)(3) of the Tax Code are not deemed to be charity events. However, such an entity may have a special fundraising performance that would qualify as a charity event.
Second, as noted above, Members and staff may accept an invitation to a charity event only from the sponsor of the event. As with widely attended events, the sponsor of a charity event is the person or persons primarily responsible for organizing the event, and a person who simply contributes money or buys tickets to an event is not considered a sponsor of that event. This matter is elaborated on below, in the section entitled “Source of Invitations for Widely Attended and Charity Events.”
Third, Members and staff invited to attend a charity event may accept local transportation from the event sponsor. In addition, when certain requirements are satisfied, they may also accept reimbursement for travel and lodging in connection with a charity event. Those requirements are discussed in Chapter 3 on travel. Before accepting travel to a charity event, a Member or staff person should make inquiry to the charitable organization to ensure that it understands the applicable rules and is acting consistently with them.
“Free Attendance” for Purposes of Widely Attended and Charity Events. The gift rule provides that when the requirements set forth above are satisfied, Members, officers, and employees may accept “free attendance” at the event. As used in the rule, free attendance includes “waiver of all or part of a conference or other fee, the provision of local transportation, or the provision of food, refreshments, entertainment, and instructional materials furnished to all attendees as an integral part of the event.” (House Rule 25, clause 5(a)(4)(D)). However, this term does not include either “entertainment collateral to the event,” or “food or refreshments taken other than in a group setting with all or substantially all other attendees” (id.), which therefore may not be accepted under the gift rule.
Example 21. In connection with its annual meeting in Washington, an association will hold a banquet and has arranged for the attendees to see a show at a downtown theater. Upon invitation from the association, a Member may attend the banquet if the requirements for a “widely attended” event are satisfied. However, he may not attend the show under this provision, in that it is not part of the banquet, but is instead entertainment that is collateral to that event.
Example 22. A charity will be holding a fundraising reception, and immediately after the reception the charity will hold a dinner to which only certain VIP’s will be invited. A Member may accept an invitation from the charity to attend the reception under the charity event provision, but he could not attend the dinner under that provision.
At times at charity fundraising events in particular, the sponsor may offer attendees a souvenir, gift, or prize. A Member or staff person may accept a baseball cap or T-shirt from the event sponsor under the “item of nominal value” provision of the gift rule, which is summarized below. In addition, under the general provision on acceptable gifts, as explained above, the official may also accept an item that has a value of less than $50 (provided that the sponsor is not a lobbyist, foreign agent, or employer of such an individual, and the official has not accepted other gifts from the sponsor that would cause the annual gift limit of less than $100 per source to be exceeded). When a Member or staff person is accompanied at a charity event by a spouse or dependent, the official should bear in mind that any such gifts given to the accompanying individual are deemed to be gifts to the official and count against the gift rule dollar limits applicable to that official.
Source of Invitations for Widely Attended and Charity Events. The gift rule is clear that Members, officers, and employees may accept an invitation to a widely attended or charity event only from the sponsor of the event. The report of the House Rules Committee on the gift rule defines the term “sponsor” as follows:
The term “sponsor of the event” refers to the person, entity, or entities that are primarily responsible for organizing the event. An individual who simply contributes money to an event is not considered to be a sponsor of the event.35
Accordingly, under the gift rule, the term “sponsor” has a definition that is narrower than the manner in which it is commonly used. Often the large financial supporters of an event are termed as “sponsors” of the event. However, such entities are not sponsors of an event for purposes of the gift rule unless they also have a substantial role in organizing the event.36
Example 23. Foundation A, a § 501(c)(3) organization under the Tax Code, organizes a $1,000-per-plate fundraising dinner to support its charitable activities. Member B may accept complimentary tickets to the dinner from Foundation A, for himself and his spouse, under the charity event provision.
Example 24. Corporation C buys a table at the fundraising dinner of Foundation A. Member B may not accept tickets to the dinner from Corporation C under the charity event provision. In accordance with the previous example, Member B may accept tickets from Foundation A, and if it chooses to do so, Foundation A may seat B at the corporation’s table.
Contributors to a widely attended or charity event may request that the sponsor invite particular Members or staff to sit with them at the event. However, the invitation will not be acceptable under these provisions unless the sponsor retains ultimate control of the guest list and the seating arrangements, and the invitation neither references any contributor nor is extended by anyone other than the sponsor. Put another way, all communications with Members or staff regarding the event should be made by the event sponsor, because a communication from an event contributor may be deemed an impermissible invitation from the contributor.
The Standards Committee has made an exception to the above rules on the proper source of invitations for the large media-related events that take place in Washington, such as the White House Correspondents’ Dinner sponsored by the Correspondents’ Association. Traditionally invitations to those events are extended not by the sponsoring organization, but instead by journalists or news organizations that are members of the sponsoring organization. Accordingly, the Committee has granted a general gift rule waiver to enable a House Member or staff person to accept an offer of free attendance at one of these media-related events from a journalist or a news organization that is a member of the media organization sponsoring the event.