Isabella Carter
Political campaigns are funded by a variety of sources, including individuals, political party committees, and political action committees (PACs). In the US, presidential campaigns can also be funded by taxpayers who choose to contribute $3 to the Presidential Election Campaign Fund when filing their tax returns. Federal law prohibits corporations and labour unions from donating directly to candidates or national party committees, but they can contribute to PACs, which in turn donate to campaigns. These PACs can include super PACs, which are independent expenditure-only committees that can raise and spend unlimited amounts of money as long as there is no coordination with any campaign or candidate.
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What You'll Learn
Campaign finance laws
The Presidential Election Campaign Fund is another source of funding for presidential campaigns. Taxpayers can choose to direct $3 of their taxes to this fund when filing their returns, and presidential candidates who agree to spending and fundraising restrictions can receive money from the fund. Public funding for major-party presidential nominees takes the form of a grant, and they are not allowed to accept private contributions for their campaigns.
There has been extensive criticism of loopholes in campaign finance laws, particularly regarding soft money or "independent spending". Following court rulings such as Citizens United v. FEC in 2010, soft money political spending was exempt from federal limits, allowing unlimited contributions to super PACs. Reformers have suggested encouraging small donor public financing and full disclosure of all political spending to address the influence of money in politics.
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Political action committees (PACs)
Political action committees, commonly known as PACs, are committees organized for the purpose of raising and spending money to elect and defeat candidates. They are tax-exempt 527 organizations that pool campaign contributions from members and donate those funds to campaigns for or against candidates, ballot initiatives, or legislation. PACs can receive up to $5,000 from any one individual, PAC, or party committee per calendar year. They can give up to $5,000 to a candidate committee per election (primary, general, or special) and up to $15,000 annually to any national party committee.
There are two main types of PACs: connected and non-connected. Connected PACs, sometimes called corporate PACs, are established by businesses, non-profits, labor unions, trade groups, or health organizations. They receive and raise money from a restricted class, such as managers and shareholders in the case of a corporation or members in the case of a non-profit organization. Non-connected PACs, on the other hand, are not sponsored by or connected to any specific entity and are free to solicit contributions from the general public. These are often formed by groups with an ideological mission, single-issue groups, and members of Congress or other political leaders.
In addition to these two types, judicial decisions have added a third classification: independent expenditure-only committees, commonly known as super PACs. Super PACs are not allowed to coordinate with or contribute directly to candidate campaigns or political parties. However, they can raise and spend unlimited amounts of money to advocate for or against any candidate or issue.
Another type of PAC is the leadership PAC, which is often established by politicians or political leaders to support candidates for various federal and non-federal offices. Leadership PACs are indicative of a politician's aspirations for leadership positions and are used to contribute funds to political allies.
PACs have been a part of the political landscape since 1944, when the Congress of Industrial Organizations (CIO) formed the first PAC to raise money for the re-election of President Franklin D. Roosevelt. Over the years, the role and influence of PACs have evolved, with campaign donations from PACs increasing significantly.
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Super PACs
Political campaigns are funded by candidates for political office who raise money to finance their campaigns and demonstrate their breadth of support. Campaign finance laws dictate who can contribute to a campaign, how much they can contribute, and how those contributions must be reported. Campaigns may raise funds from individuals, political party committees, and political action committees (PACs).
Unlike traditional PACs, super PACs are prohibited from donating money directly to political candidates, and their spending must not be coordinated with the candidates they benefit. They are, however, required to report their donors to the Federal Election Commission on a monthly or semi-annual basis. As of March 19, 2025, 2,502 groups organized as super PACs had reported total receipts of $5,096,825,517 and total independent expenditures of $2,688,997,939 in the 2023-2024 cycle.
The rise of super PACs can be attributed to two judicial decisions in 2010: Citizens United v. Federal Election Commission and Speechnow.org v. FEC. In Citizens United v. FEC, the Supreme Court held that the First Amendment right to free speech prohibits the government from restricting independent expenditures for political communications by corporations, labor unions, and other associations. Similarly, in Speechnow.org v. FEC, the federal Court of Appeals for the D.C. Circuit ruled that PACs that did not make contributions to candidates, parties, or other PACs could accept unlimited contributions from individuals, unions, and corporations (both for-profit and not-for-profit).
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Public funding
A funder of a political campaign is called a donor. In the US, political campaigns are funded by individuals, political party committees, and political action committees (PACs).
In the US, public funding for presidential elections is administered by the Federal Election Commission (FEC), which matches the first $250 of each contribution from individuals that an eligible presidential candidate receives during the primary campaign. The FEC also funds the major party nominees' general election campaigns and assists eligible minor party nominees. To be eligible for public funding, presidential candidates must demonstrate broad-based public support by raising more than $5,000 in each of at least 20 states. They must also agree to spending and fundraising restrictions, including limits on campaign spending.
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Lobbyists
The role of lobbyists has been the subject of much debate, with a general consensus that lobbying has been a significant corrupting influence in American politics. Critics argue that lobbying has resulted in a legalized form of political "money laundering," with powerful interests battling to maintain the status quo. However, not all studies agree on the effectiveness of lobbying, with some suggesting that it only exerts marginal influence.
In the United States, lobbying is regulated by laws aimed at preventing political corruption and ensuring transparency about possible influences. Lobbyists and lobbying organizations are required to register with the relevant jurisdiction and abide by ethics rules. Despite these regulations, lobbying activities have been identified in corruption cases, and the line between lobbying and bribery remains blurred.
It is important to distinguish between lobbying activity and campaign or political activity, which are separate but adjacent sets of activities. Political activity is regulated by campaign finance laws, while lobbying is an attempt to influence legislative, administrative, or executive action. Many organizations engage in lobbying to promote their legislative agenda, obtain favorable rulemaking, or secure state funding and contracts.
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Frequently asked questions
A funder of a political campaign can be called a donor or contributor.
There are various types of donors in a political campaign, including individuals, political party committees, and political action committees (PACs).
A PAC, or Political Action Committee, is a committee that raises funds to support or oppose political campaigns or candidates. They are often formed by corporations, labor organizations, or membership groups, who are not allowed to contribute directly to federal campaigns.
Yes, campaign finance laws dictate who can contribute to a campaign, how much they can give, and how these contributions must be reported. These laws vary at the state and federal levels. For example, federal law prohibits corporations and labor unions from donating directly to candidates or national party committees. There are also limits on how much money individuals and organizations can contribute to political campaigns.
