Contributors may give funds to candidates, political parties or other committees for spending on behalf of one or more other candidates or committees. These types of donations are known as earmarked contributions. Earmarked contributions may not simply be passed along to the benefiting candidate or committee; they must be spent - at least for the most part - for the benefit of the intended recipient.
In the case of earmarked contributions, the "original contributor" is the person making the earmarked contribution. The "intermediary or conduit" is the candidate or committee that is provided the funds by the original contributor for spending on behalf of yet another candidate or committee. The "beneficiary" or "benefiting candidate or committee" is the other candidate or committee who ultimately benefits from the funds spent by the intermediary or conduit.
Technically, "earmarked contributions" are defined as "any contribution given to an intermediary or conduit, either a political committee, candidate or third party, with a designation, instruction, or encumbrance, whether direct or indirect, express or implied, oral or written, which is intended to result in or which does result in all or any part of the contribution being made to or for the promotion of a certain candidate, state official or ballot proposition."
An earmarked contribution counts against the original contributor's limit for the benefiting candidate. If all of the earmarked contribution is not spent by the intermediary or conduit for the benefit of the designated recipient, the remainder must be transferred to the recipient unless it is re-designated by the original contributor to another recipient. If the remainder is used to benefit another candidate or committee and the intermediary or conduit directed or had any control over the selection of this recipient, the amount of the remainder is a contribution from both the original contributor and the intermediary or conduit.
If an earmarked contribution is refused by the benefiting candidate or committee, the earmarked contribution must be returned by the intermediary or conduit to the original contributor within five business days of the date the intermediary or conduit is notified.
How to report earmarked contributions