Eleanor Finch
Running a political campaign can cost millions, with candidates collecting large sums in contributions and donations. But what happens to all the leftover money when a campaign ends? There are rules in place that dictate how this money can be spent, with personal use prohibited. So, what do losing political campaigns do with extra money?
| Characteristics | Values |
|---|---|
| Use for personal expenses | Prohibited |
| Use for campaign debts | Allowed |
| Transfer to other campaigns | Allowed |
| Transfer to future races | Allowed |
| Transfer to party committees | Allowed |
| Donate to charities | Allowed |
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What You'll Learn
Candidates can donate to charities
Candidates can donate their leftover campaign funds to charities. This is one of the permitted uses of leftover campaign funds, and it is a popular option for candidates who are retiring from public life. Former Senator Joseph Lieberman, for instance, transferred funds from his Senate campaign fund and his leadership PAC to a college scholarship fund for high school students from his state, Connecticut. He also used other leftover campaign money to organise his political and campaign papers to donate to the Library of Congress.
When donating to charities, candidates must ensure that they do not receive any compensation from the organisations, and the donation must not be used by the charity to benefit the candidate.
Leftover campaign funds can also be used to pay off any debts or expenses incurred by the campaign, such as rent on office space, fees for services like polling and transportation, and staff salaries. Candidates may also choose to transfer their leftover funds to a committee for a future campaign season or to a leadership PAC, which is a political committee that backs a political agenda and other candidates supported by the former candidate.
It is important to note that candidates are prohibited from retaining contributions that exceed the limits set by the FEC. In the case of contributions for a general election where the candidate drops out or loses before the race, these contributions must be refunded to individual donors within 60 days.
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They can transfer funds to future campaigns
Losing political campaigns have several options for what to do with extra money. One option is to transfer funds to future campaigns. This can be done by moving funds to a committee for a future campaign season. For example, a candidate could transfer funds to a committee for the next election cycle. Alternatively, candidates can shift funds in their presidential committee accounts back to congressional committees, as long as donations do not exceed the limits on what donors have already contributed.
Candidates can also create a "leadership PAC" with excess funds. This is a political committee that the former candidate controls but does not use to support their own campaigns. Instead, it backs a political agenda, including other candidates, that the original candidate supports. Leadership PACs have been criticised as functioning as "slush funds" for politicians to spend on travel and entertainment they cannot buy with regular campaign donations.
There are no deadlines for closing campaign accounts, and retiring lawmakers who keep their campaign committees active continue to face disclosure requirements. They may give an unlimited amount from their reelection accounts to party committees. However, there are limits on how much they can donate to candidates or other PACs.
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They can pay off campaign debts
Losing political campaigns can use their extra money to pay off campaign debts. The Federal Election Commission (FEC) has strict guidelines on how leftover campaign funds must be spent, and personal use is prohibited. Campaign debts may include expenses incurred while ending a campaign, such as rent on office space, fees for services like polling and transportation, and staff salaries.
Candidates who have lost a primary race must refund contributions to individual donors within 60 days or redistribute funds with the contributor's permission. However, if a candidate has any net debts outstanding, they may use undesignated contributions to pay off these debts.
In the case of leadership PACs, there are fewer restrictions on spending, and critics argue that they can function as "slush funds." However, watchdog organizations may file complaints if leadership PAC funds are used for personal expenses.
Retiring lawmakers who keep their campaign committees active must continue to meet disclosure requirements and face limits on how much they can donate to other candidates or PACs.
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They can donate to other candidates
Losing political campaigns can donate to other candidates or causes, but there are rules in place that dictate how this money can be spent. Candidates are not allowed to use any remaining funds for personal use after all campaign-related debts are settled. Personal use is defined as "a commitment, obligation, or expense of any person that would exist irrespective of the candidate's campaign or responsibilities as a federal officeholder".
Campaign funds may not be used for an expense that exists independent of the campaign. Expenses that are automatically considered personal use include salary payments to the candidate's family unless they provide a bona fide service to the campaign, and the payment reflects the service's value in the free market. There are no limits on how much they can give to a national, state, or local party committee. They can also give money to state and local candidates, depending on state campaign finance laws, or up to $2,000 to each of one or more candidates for federal office.
Former candidates can also use any excess funds to create a so-called \"leadership PAC", which is a political committee that can be controlled by the former candidate but is not used to support that person's campaigns. Instead, it backs a political agenda, including other candidates, that the candidate supports. Leadership PACs have been criticized for functioning as "slush funds" for politicians to spend on travel and entertainment they can't buy with regular campaign donations.
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They can donate to political committees
Losing political campaigns can donate to political committees, which is one of the most common ways to dispose of leftover funds. There are no limits on how much they can give to a national, state, or local party committee. For instance, the Democratic National Committee is one such committee that receives donations from losing campaigns.
Former candidates can also use any excess funds to create a "leadership PAC," a political committee that they control but is not used to support their own campaigns. Instead, it backs a political agenda, including other candidates, that the former candidate supports. However, critics argue that these PACs can be used as "'slush funds' for politicians to spend on travel and entertainment they can't buy with regular campaign donations.
Candidates can also shift funds in their presidential committee accounts back to congressional committees, as long as donations do not surpass the limits on what donors have already contributed. Pete Buttigieg, for example, converted his presidential committee into the Win the Era PAC after dropping out of the 2020 presidential race.
Furthermore, candidates can donate up to $2,000 to each of one or more candidates for federal office.
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Frequently asked questions
Candidates are not allowed to use leftover funds for personal use. The first use of leftover money is generally to pay the cost of winding things up, such as rent, fees for services, and staff salaries. Remaining funds can be sent to any other campaign or even future races, or donated to a recognized charity.
Yes, candidates can hang on to the leftover money and use it to stay engaged in the political process. There is no deadline by which federal officeholders have to close their campaign accounts or leadership PAC accounts.
If the candidate is retiring from public life, they can donate the leftover funds to a charity or create their own non-profit organization. They can also donate the money to political committees.
