Malcolm Rivera
Political campaigns are costly affairs, and understanding the flow of money is crucial for transparency. The Federal Election Campaign Act (FECA) of 1971 limits the amount of money individuals and organisations can contribute to campaigns, with adjustments made for inflation every two years. These limits vary for different recipient groups, such as candidates, national party committees, and Senate candidates. While traditional Political Action Committees (PACs) have contribution and spending limits, Super PACs, or independent expenditure-only committees, can accept unlimited contributions from individuals, corporations, and organisations. However, Super PACs cannot donate directly to candidates or parties but can spend unlimitedly on political advertising. With billions of dollars flowing into US political campaigns, it is essential to examine how many people donate the maximum allowable amount and the impact this has on the democratic process.
| Characteristics | Values |
|---|---|
| Maximum amount an individual can donate per election, per candidate | $3,300 |
| Maximum amount an individual can donate to a national party committee per calendar year | $41,300 |
| Maximum amount a political party committee can donate to a Senate candidate | $57,800 |
| Total amount raised by US political campaigns for the 2024 House, Senate, and presidential elections | $8.6 billion |
| Percentage of the total amount raised by US political campaigns for the 2024 elections that came from PACs | Over 65% |
| Total amount raised by individual candidates for the 2024 elections | $2.0 billion |
| Total amount raised by party committees for the 2024 elections | $929.9 million |
| Amount raised by the Democratic National Committee for the 2024 elections | $188.6 million |
| Amount raised by the Republican National Committee for the 2024 elections | $130.1 million |
| Amount raised by Rep. Thomas Massie in the form of 3,203 individual donations after being targeted by President Donald Trump | $261,000 |
| Amount spent by Massie and his allies in the 2020 primary when attacked by Trump for opposing COVID bailouts | $2,000,000 |
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What You'll Learn
Super PACs and the SuperPAC loophole
Political action committees (PACs) are private interest groups that raise and spend money to support candidates and influence elections. PACs can represent industry groups, labour unions, or individual companies. There are different types of PACs, including traditional PACs, hybrid PACs, and Super PACs. Traditional PACs are subject to both donation and spending limits. Independent-expenditure-only political committees, or Super PACs, may accept unlimited contributions, including from corporations and labour organizations.
Super PACs have become adept at exploiting loopholes in campaign finance laws to conceal their donors and the amounts spent on elections. One such loophole is the use of a "common vendor". A common vendor is a media agency or political consulting firm that is hired by both a Super PAC and the candidate they support. By coordinating their advertising strategies through a common vendor, Super PACs and candidates can effectively collaborate without technically violating federal limits on spending and fundraising. This lack of regulation poses a significant threat to electoral democracy, as it allows Super PACs and candidates to evade accountability and conceal the true sources of their funding.
Another Super PAC loophole is the ability to launch a new Super PAC just before an election. This tactic allows political actors to spend unlimited sums of money without disclosing their funding sources until after the votes are counted. For example, during the 2020 election cycle, at least 11 groups used this loophole to conceal the source of nearly $24 million in election spending. Super PACs supporting candidates such as Elizabeth Warren and Amy Klobuchar spent millions of dollars without revealing their donors until after the elections.
The exploitation of these loopholes undermines transparency and voters' ability to make informed decisions. It also enables a small number of wealthy donors to have a disproportionate influence on political campaigns. For instance, in the 2024 election cycle, Elon Musk became the single largest individual political donor by contributing $277 million to Trump and allied Republicans. Similarly, during the Summer of 2015 in the 2016 presidential campaign cycle, fewer than 400 super-wealthy families accounted for nearly half of the campaign financing.
To address these issues, reforms are needed to update outdated reporting rules and close loopholes. The Federal Election Commission (FEC) should also strengthen its regulations and improve the complaint process to ensure better accountability for Super PACs and candidates.
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Maximum individual donations
The Federal Election Campaign Act (FECA) of 1971 limits the amount of money individuals and political organizations can give to a candidate running for federal office. These contribution limits are indexed for inflation every two years, based on the change in the cost of living since 2001. For 2023-2024, the limits on contributions made by persons to candidates increased to $3,300 per election, per candidate.
Despite these limits, a small portion of Americans make campaign donations, and these donors tend to be more ideologically extreme than other partisans. A 2017 study found that relatively unpopular industries, such as fossil fuels or banking, provide larger contributions to candidates. Additionally, money from billionaires and other super-wealthy people comprises a disproportionate share of campaign financing in the United States. For example, in the summer of 2015, during the 2016 presidential campaign cycle, the donations of fewer than 400 super-wealthy families accounted for nearly half of all donations.
Super PACs, or independent expenditure-only committees, can accept unlimited contributions from individuals and corporations. They can spend this money on political advertising and other election-related activities without coordinating directly with candidates or parties. In 2024, Elon Musk donated $277 million to Trump and allied Republicans, making him the single largest individual political donor in that election cycle.
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Public funding for political conventions
During the period when public funding was available, it played a significant role in financing the major parties' conventions. Each major party was entitled to receive public funds, with amounts reaching $18.2 million in 2012. This funding was intended to cover qualified campaign expenses, including travel and other expenses associated with the conventions.
The eligibility criteria for minor parties to receive public funding were based on their performance in the previous election, requiring at least 5% of the popular vote. The Reform Party was one such minor party that qualified for funding in 1996 and 2000 due to Ross Perot's strong electoral showing.
The end of public funding for conventions in 2014 shifted the financial burden to other sources. Political action committees (PACs), including Super PACs and Hybrid PACs, have become significant players in campaign financing. These committees can raise and spend substantial amounts of money, with Super PACs able to accept unlimited contributions from individuals and corporations.
The role of PACs has sparked concerns about the influence of large donors and the potential for unequal representation in politics. Critics argue that big money dominates U.S. political campaigns, drowning out the voices of ordinary Americans. Efforts by reformers have focused on promoting small donor public financing, where public funds match and multiply small donations, incentivizing candidates to seek a broader base of supporters.
While public funding for political conventions has ended, public financing is still available for qualifying candidates for President during the primaries and general elections. This includes matching funds for individual contributions and grants for major party nominees, subject to eligibility requirements and spending limits.
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Federal campaign finance laws
The first federal campaign finance law, the Tillman Act, was enacted in 1907, barring corporations and national banks from contributing to federal election campaigns. The Federal Election Campaign Act of 1971 replaced existing federal campaign finance laws and required campaigns to file quarterly disclosure reports of contributions and expenditures. This act also provided the legislative framework for political action committees (PACs). The Bipartisan Campaign Reform Act of 2002, and a series of federal court cases, including Buckley v. Valeo and Citizens United v. Federal Election Commission, together form the foundation of federal campaign finance law.
The FEC sets contribution limits for individuals, PACs, and party committees to candidates for the US House, US Senate, or US President. These limits are adjusted for inflation every two years, based on the change in the cost of living since 2001. For 2023-2024, the limits on contributions made by persons to candidates increased to $3,300 per election, per candidate. The limits on contributions made by persons to national party committees increased to $41,300 per calendar year, and the limit on contributions made by certain political party committees to Senate candidates increased to $57,800 per campaign.
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Sources of campaign funds
In the US, the Federal Election Campaign Act (FECA) of 1971 limits the amount of money individuals and political organizations can give to a candidate running for federal office. These contribution limits are indexed for inflation every two years, based on the change in the cost of living since 2001. For 2023-2024, the limits on contributions made by persons to candidates were increased to $3,300 per election, per candidate. However, there is no limit on the amounts that individuals or corporations can donate to Super PACs.
Despite these regulations, money from billionaires and other extremely wealthy individuals makes up a disproportionate share of campaign financing in the United States. For example, in the 2024 election cycle, Elon Musk donated $277 million to Trump and allied Republicans, making him the single largest individual political donor. Similarly, during the Summer of 2015 in the 2016 presidential campaign cycle, fewer than 400 super-wealthy families accounted for nearly half of all donations.
Political Action Committees (PACs) are also a significant source of campaign funds. PACs are private interest groups that raise and spend money to support candidates and influence elections. They can represent industry groups, labor unions, or individual companies. In the 2024 election cycle, over 65% of the $8.6 billion collected by US political campaigns, approximately $5.6 billion, came from PACs. This is a notable increase from 2016, when individual donations to candidates made up 52% of funds raised by House candidates, compared to 32% from PACs.
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