December 2006 - Guidelines for Political Parties on donations and prohibited donations

Appendix 1 - Fund-raising events

Determining the net value of a contribution to a fund-raising event

In accordance with the provisions of sections 22(2)(a)(vi) & (vii) of the Act, a donation to a political party includes the net value of a contribution to a fund-raising event. The net value of a contribution to an event is arrived at by first calculating the net profit from the event (i.e., by deducting the cost of running the event from the total amount raised by the event). The net profit is then attributed to the number of people contributing to the event in proportion to the contribution made by each person. This gives the net value of each person's contribution to the fund-raising event.

If, for example, in relation to a fund-raising event, a person pays €1,000 in respect of the entry fee for 10 people, his/her gross contribution to the event is €1,000. If the cost of running the event is calculated at €20 per person attending, a sum of €200 is deducted from his/her gross contribution, leaving a net contribution of €800. If the person makes other contributions to the event (e.g., buying horses at a race night, sponsoring a hole at a golf classic) it is necessary to add the value of such contributions to the net contribution of €800 for the purposes of determining the aggregate net value of his/her contribution to the fund-raising event.

The net contribution made by a person to a fund-raising event organised by a political party is regarded as a donation to the party, even if the funds are subsequently used for the purposes of supporting one or more of the party's Members of the Houses of the Oireachtas or candidates at an election.

The party is not required to disclose the total value of the proceeds of the fund-raising event in its Donation Statement. It is required, however, to disclose any donation(s) from a person which exceeds a net value of €5,078.95. The maximum limit of €6,348.69 for acceptance by political parties of donations from the same person in the same year also applies to the net value of contributions to fund-raising events.

Where the net value of a monetary donation to the fund-raising event exceeds €126.97, the accounting unit of the party (i.e., branch or head office) which organised the event will, if it does not already have one, be required to open a political donations account. If the accounting unit already has a political donations account, all monetary donations, of whatever value, received in relation to the event must be lodged to the political donations account.

It should be noted that where a fund-raising event is organised by a sub-committee of a political party (which might include a sub-committee of party headquarters or of a branch or subsidiary organisation) and the sub-committee passes the net proceeds to the party (whether party headquarters, branch or subsidiary organisation), the sub-committee is regarded as an intermediary accepting donations on the party's behalf. The party (whether party headquarters, branch or subsidiary organisation) and not the committee is responsible for complying with the requirements of the Act.

If, however, the sub-committee is not set up as a subsidiary organisation of the party and retains control of the proceeds of a fund-raising event as opposed to passing the proceeds to the party (whether party headquarters or a branch or subsidiary organisation of the party), the sub-committee could be regarded as a "third party" as defined in the Act. The sub-committee would be subject to the provisions of the Act applying to "third parties". These provisions are set out in a separate explanatory note which is available on the website of the Standards Commission.

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