Where Does Unspent Political Campaign Money Go?

Political campaigns can raise millions, if not billions, of dollars through personal and business donations, which can be used to pay for travel, administration, salaries, and other campaign-related expenses. But what happens to the leftover money when a campaign is over? There are rules in place that dictate how this money can be spent, and candidates must keep diligent records of where the money comes from and how it is spent. While personal use is prohibited, permitted uses include charitable donations, donations to other candidates, and saving it for a future campaign.

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Candidates can't use unspent funds for personal expenses

Political campaigns can raise millions, if not billions, of dollars through personal and business donations. This money is meant to be used to pay for travel, administration, salaries, and any other campaign-related expenses. However, candidates are prohibited from using these funds for personal use.

The Federal Election Commission (FEC) has rules in place to control how money raised by candidate campaign committees is spent after a candidate bows out or an election is over. While candidates can use leftover funds to pay off any debts, they cannot use them for personal expenses like mortgage payments, groceries, clothing purchases, or vacations.

If a candidate receives contributions for a general election but drops out of the race or loses the primary, they must refund the money to individual donors within 60 days. They can also choose to redirect the funds elsewhere with the donor's permission or for moral, ethical, or legal reasons.

Leftover funds can also be spread out to other candidates, donated to charities, or saved for a future campaign. Candidates whose campaigns have ended but who are still handling outstanding expenses need to keep filing campaign finance reports with the FEC.

In the case of a candidate retiring from public life, they may transfer funds to a college scholarship fund or donate them to an organization like the Library of Congress. They may also choose to do nothing and keep the cash in the bank. While the law is vague on what constitutes "any other lawful purpose", it is clear that personal use of leftover campaign funds is prohibited.

Money can be used to pay off campaign debts

Political campaigns can raise millions, if not billions, of dollars through personal and business donations. This money is used to pay for travel, administration, salaries, and other campaign-related expenses. However, when a campaign ends, there may be leftover funds. In such cases, there are rules in place that dictate how this money can be spent.

One permitted use of leftover campaign funds is to pay off any debts incurred during the campaign. Candidates may continue to request public funds to pay off campaign debts until the first Monday of March of the year following an election. Notably, candidates are prohibited from using campaign funds for personal expenses, such as mortgage payments, groceries, clothing, or vacations.

Once all campaign-related debts are settled, candidates have several options for leftover funds. They may choose to refund contributions to donors, especially if a donor has exceeded the maximum allowable contribution. Alternatively, they can donate the money to other campaigns or candidates, with no limits on how much they can give to a national, state, or local party committee. They may also donate to charities, as long as they do not personally benefit from the donation.

In some cases, candidates who plan to run for office again in the future may transfer the remaining funds to a committee for a future campaign season. Cory Booker, for instance, was able to use money left over from his presidential campaign to fund his reelection campaign for the Senate.

Funds can be transferred to a committee for a future campaign

Once a campaign is over, there are rules in place that dictate how unspent money can be spent. One option is to transfer the remaining funds to a committee for a future campaign. Candidates can transfer the money to a committee for the next campaign season if they or any other candidate want to run for president again in the future.

For example, in 2020, following his election loss, former President Trump received more than $250 million in donations from supporters to fuel an "election defense fund." He divided this money between two campaign entities: his 2020 presidential campaign committee, which he later converted into a freestanding PAC called Make America Great Again (MAGA) PAC, and a second entity called Save America PAC, a "leadership PAC".

Another example is Cory Booker, who was up for reelection to his Senate seat. Once his presidential campaign had paid off any debts, he could transfer the remaining money to his senatorial reelection campaign fund.

Former candidates can also use any excess funds to create a "leadership PAC," a political committee that can be controlled by the former candidate but is not used to support their 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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Candidates can donate to charities or other candidates

When a political campaign ends, there are often funds remaining in the campaign's account. Candidates are prohibited from using these leftover funds for personal use. Instead, they can donate the money to charities or other candidates.

According to the FEC, candidates can spend their leftover funds on "winding down" or terminating their campaign. This includes paying any outstanding bills or debts, or costs required to close their offices. They can also issue refunds to individual donors.

Candidates can donate leftover funds to charities, as long as they do not receive any compensation from the organizations, and the donation is not used by the charity to benefit the candidate. They can also donate to other candidates, with some limitations. For example, they can only donate a maximum of $2,000 to another federal candidate, and donations to state or local candidates are subject to state law.

In addition to donating to charities or other candidates, candidates can also transfer leftover funds to a future campaign or a "leadership PAC." A leadership PAC is a political committee that can be controlled by the former candidate but is not used to support their own campaigns. Instead, it backs a political agenda, including other candidates, that the original candidate supports.

Leftover money can be used for any lawful purpose

There are rules in place that dictate how political campaign money can be spent after a campaign concludes. While leftover money cannot be used for personal expenses, it can be used for any other lawful purpose.

The first use of leftover money is generally to pay the costs of winding things up. Even after a candidate announces they're out, their expenses don't stop right away. They may still owe rent on office space, as well as fees for services like polling, transportation, and staff salaries. Some campaigns max out their credit cards or take out loans, which still need to be repaid.

Once those expenses are paid, candidates can use the leftover money for any lawful purpose. They can donate the money to charity or pass it on to national, state, or local political party committees. They can also donate some of those funds to the committee of another federal candidate, although such donations are limited to $2,000 per election to any one candidate. Candidates can also convert their official campaign committee into its own political action committee (PAC), which can give them more flexibility with how to use the money.

Leftover funds can also be used to create a "leadership PAC," 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 original 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.

Finally, candidates can simply let their leftover funds sit in the bank in case they decide to run for office again in the future.

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