Simone Lawson
Political campaigns can raise millions, or even billions, of dollars through personal and business donations. However, there are rules in place that dictate how this money can be spent. In the US, the Federal Election Commission (FEC) enforces the Federal Election Campaign Act of 1971 (FECA), which limits the amount of money individuals and political organisations can give to a candidate running for federal office. There are also rules regarding who can donate, with charities, for example, facing restrictions on political activity.
Characteristics and Values
| Characteristics | Values |
|---|---|
| Donations to political campaigns | Cannot be used for personal use |
| Cannot be used for charitable donations | |
| Cannot be used to claim a tax deduction | |
| Cannot be accepted from federal government contractors | |
| Cannot be accepted from foreign nationals | |
| Cannot be accepted from charitable organizations | |
| Cannot be accepted from corporations directly | |
| Cannot be accepted from trusts where the trustee is affiliated with the political committee | |
| Cannot be accepted from unincorporated tribal entities | |
| Cannot exceed contribution limits | |
| Must be reported to the Federal Election Commission |
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What You'll Learn
Federal law prohibits donations from foreign nationals
Foreign nationals are also prohibited from making expenditures, independent expenditures, or disbursements in connection with any federal, state, or local election. This includes direct or indirect expenditures, as well as the provision of substantial assistance in the making of such expenditures. No person shall knowingly solicit, accept, or receive any contribution or donation from a foreign national in connection with an election. This includes providing substantial assistance in the solicitation, making, acceptance, or receipt of such contributions or donations.
The prohibition on donations from foreign nationals extends to political committees and organizations of political parties. Foreign nationals are prohibited from directly or indirectly making donations to political committees, including national, state, or local party committees. It is also a violation of federal law to knowingly provide substantial assistance in the making, acceptance, or receipt of contributions or donations to these committees.
In addition, foreign nationals are prohibited from donating to inaugural committees. No person shall knowingly accept from a foreign national any donation to an inaugural committee. This prohibition includes direct and indirect donations, as well as the provision of substantial assistance in making such donations. Furthermore, foreign nationals are prohibited from participating in decisions involving election-related activities, such as decisions concerning the administration of a political committee.
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Charities cannot donate to political campaigns
Charities are prohibited from making contributions to political campaigns in connection with federal elections. Incorporated charitable organizations, like other corporations, are subject to this restriction. This is outlined in the Internal Revenue Code, which states that all section 501(c)(3) organizations are absolutely prohibited from directly or indirectly participating in, or intervening in, any political campaign on behalf of or in opposition to any candidate for elective public office.
This restriction is in place to prevent tax-exempt entities from indirectly contributing to political candidates through charitable donations, which could allow for anonymous large-sum contributions that would normally be identified through Super PACs. Charities that violate this restriction may face serious consequences, including the denial or revocation of their tax-exempt status and the imposition of excise taxes.
While charities cannot donate directly to political campaigns, they can still contribute to the political process in non-partisan ways. For example, charities can provide support for registration drives, voter education programs, and candidate debates, as long as they remain objective and do not endorse a specific candidate.
It is important to note that donations to political campaigns are not considered charitable donations for the donor. These contributions do not qualify for tax deductions, and any expenses incurred while supporting a political candidate cannot be claimed on tax returns.
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Candidates cannot use donations for personal expenses
Political campaigns can raise millions, if not billions, of dollars through personal and business donations. This money is intended to pay for travel, administration, salaries, and other campaign-related expenses. However, it is important to note that candidates cannot use these donations for personal expenses.
The Federal Election Commission (FEC) provides guidance on which expenses are considered personal use. This includes expenses such as food purchased for daily consumption inside the home, supplies needed to maintain the household, and attire for political functions. Campaign funds also cannot be used to cover expenses related to deaths within the candidate's family, except for funeral, cremation, and burial expenses for a candidate or campaign worker whose death arises from campaign activity.
Additionally, salary payments to the candidate's family are considered personal use unless they provide a bona fide service to the campaign, and the payment reflects the value of that service in the free market. Candidates are also prohibited from using campaign funds to market a book, except in limited situations permitted by the Commission.
Any money left over after a candidate drops out or an election is over must be used to pay off campaign-related debts. Personal use of campaign funds is prohibited, and candidates must keep diligent records of where the money comes from and how it is spent. These rules ensure that donations are used solely for campaign purposes and not for the personal gain of the candidate.
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Donors can give to multiple candidates in a federal election
The FEC maintains a database of individuals who have made contributions to federally registered political committees. The database is searchable by the individual contributor's name, employer, occupation, location, contribution amount, and committee receiving the contribution.
There are limits on the amount of money any individual can donate to a single candidate, and rules on how the money can be spent. For example, an individual can give up to $2,000 per election to another federal candidate. This money can be used for travel, administration, salaries, and other campaign-related expenses. However, it cannot be used for personal expenses, which are defined as any expense that would exist independent of the campaign.
There are also rules about who can and cannot contribute. For example, federal law prohibits contributions from foreign nationals and federal government contractors in connection with any federal, state, or local election. Charitable organizations are also prohibited from making contributions in connection with federal elections, and they face additional restrictions on political activity under the Internal Revenue Code.
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Super PACs can accept unlimited contributions
Political campaigns can raise millions, if not billions, of dollars through donations. The Supreme Court's ruling in Citizens United made it easier for corporations and unions to use their treasuries to directly influence elections. This has resulted in a massive increase in political spending from outside groups, expanding the influence of ultra-wealthy donors, corporations, and special interest groups.
Super PACs, or "independent expenditure-only committees," are political committees that can solicit and accept unlimited contributions from individuals, corporations, labor organizations, and other political committees. They are not allowed to accept contributions from foreign nationals, federal contractors, national banks, or federally chartered corporations. Super PACs are required to disclose their donors, but those donors can include "'dark money' groups," which make the original source of the donations unclear.
The creation of Super PACs has been attributed to two court decisions. In the 2010 case Speechnow.org v. FEC, a federal appeals court ruled that outside groups could accept unlimited contributions from individual donors and corporations as long as they did not give directly to candidates. Three months later, a lower court applied this reasoning to toss out the limits on the size of donations that individuals or corporate entities could make to Super PACs.
While Super PACs cannot contribute directly to political campaigns, they can spend money on independently produced ads and other communications that promote or attack specific candidates. This has led to Super PACs working in tandem with political campaigns, to the point where they are now integral to most major campaigns. Lawmakers and regulators have been encouraged to pass stricter rules to prevent Super PACs from coordinating directly with candidates and parties.
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Frequently asked questions
The Federal Election Commission (FEC) enforces the Federal Election Campaign Act of 1971, which limits the amount of money individuals and political organizations can give to a candidate running for federal office.
Yes, there are limits on the size of political contributions, but these differ depending on who is giving and who is receiving the funds. For example, a PAC can contribute directly to a candidate, but the maximum donation is $5,000.
Charitable organizations are prohibited from making contributions in connection with federal elections. Charities face additional restrictions on political activity under the Internal Revenue Code.
No, federal law prohibits contributions, donations, expenditures, and disbursements solicited, directed, received, or made directly or indirectly by or from foreign nationals in connection with any federal, state, or local election.
