Who Receives The Most Campaign Money?

Political parties in the United States collect hundreds of millions of dollars each election cycle, with funding for the 2024 election cycle coming primarily from political action committees (PACs). PACs are regulated, limited, and disclosed, and they represent the most traditional way for companies to support candidates and political parties. The Democratic and Republican parties, for instance, receive funding from the National Association of Realtors and the National Beer Wholesalers Association. In the 2022 election cycle, Republicans spent roughly $4.2 billion, while Democrats spent about $4 billion. The 2020 election cycle saw a total of $15.4 billion in expenditures, with Joe Biden raising the most money of any candidate, at $170.6 million.

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Political action committees (PACs)

At the federal level, an organisation becomes a PAC when it receives or spends more than $1,000 to influence a federal election and registers with the Federal Election Commission (FEC). There are two types of PACs: connected and non-connected. Judicial decisions added a third classification, independent expenditure-only committees, also known as Super PACs. Most of the active, registered PACs are "connected PACs", also known as "corporate PACs", and are established by businesses, non-profits, labour unions, trade groups, or health organisations. Non-connected PACs are formed by groups with an ideological mission, single-issue groups, and members of Congress and other political leaders.

PACs have been in existence since 1944, when the Congress of Industrial Organisations (CIO) formed the first one to raise money for the re-election of President Franklin D. Roosevelt. The first PAC was the CIO-PAC, formed in July 1943 under CIO president Philip Murray and headed by Sidney Hillman. It was established after the US Congress prohibited unions from giving direct contributions to political candidates.

Super PACs, officially known as "independent expenditure-only political action committees", can raise unlimited amounts from individuals, corporations, unions, and other groups to spend on, for example, ads overtly advocating for or against political candidates. However, they are not allowed to coordinate with or contribute directly to candidate campaigns or political parties.

Hybrid PACs (sometimes called Carey Committees) are similar to Super PACs but can give limited amounts of money directly to campaigns and committees while still making independent expenditures in unlimited amounts. PACs can give $5,000 to a candidate committee per election (primary, general, or special). They can also give up to $15,000 annually to any national party committee and $5,000 annually to any other PAC. PACs may receive up to $5,000 from any one individual, PAC, or party committee per calendar year.

PACs have become increasingly influential in US politics. Spending by political action committees increased more than eightfold from 2008 to 2020. Between January 2023 and May 2024, just under $3.9 billion in funding went to campaign-related expenditures. Most of the money spent so far has come from PACs – nearly $2.2 billion. For the 2024 election cycle, over 65% of the money, or about $5.6 billion, came from PACs.

Presidential public funding

Under the presidential public funding program, eligible presidential candidates can receive federal government funds to cover the qualified expenses of their political campaigns in both the primary and general elections. The program was designed to use tax dollars to match the first $250 of each contribution from individuals that an eligible presidential candidate receives during the primary campaign. It also funds the major party nominees' general election campaigns and assists eligible minor party nominees.

To be eligible for public funds, the presidential nominee of a major party must agree to limit spending to the amount of the grant and may not accept private contributions for the campaign. Candidates may spend an additional $50,000 from their own personal funds, which does not count against the expenditure limit. Minor party candidates and new party candidates may become eligible for partial public funding of their general election campaigns if they receive between 5 and 25% of the total popular vote in the preceding presidential election. The amount of public funding for minor party candidates is based on the ratio of the party's popular vote in the preceding election to the average popular vote of the two major party candidates.

To qualify for matching funds, contributions must be deposited in the campaign account by December 31 of the election year. Eligible candidates may receive public funds equaling up to half of the national spending limit for the primary campaign. The national spending limit for 2024 is $61.79 million. The basic grant for major party nominees in the general election is $20 million, adjusted for inflation each presidential election year. By 2008, the last year a major party candidate chose to accept a general election grant, that amount had grown to $84.1 million.

In the 2024 election cycle, US political campaigns collected around $8.6 billion for the House, Senate, and presidential elections. Over 65% of that money, about $5.6 billion, came from political action committees (PACs). Individual candidates have drawn over $2.0 billion, while party committees raised just over $929.9 million.

Corporate donations

One way corporations circumvent direct contribution limits is by donating to political action committees (PACs). PACs are organizations that raise and spend money to support or oppose political candidates or ballot initiatives. They are subject to contribution limits and disclosure requirements, but they provide a channel for companies to indirectly support candidates. In the 2022 midterm elections, corporate political donations from PACs and business-related associations totalled nearly $344 million, with approximately $154 million going to Democrats and $189 million to Republicans.

Another strategy used by corporations is donating to trade associations and "social welfare" organizations under specific sections of the Internal Revenue Code. These groups are tax-exempt and can engage in election-related activities without disclosing their donors, allowing corporations to maintain anonymity while influencing political outcomes. Additionally, corporations may spend unlimited funds on advertising that targets or promotes specific candidates, as long as it is done independently of the candidate's campaign.

The role of corporate donations has been amplified by the Citizens United decision in 2007, which struck down prohibitions on corporate "independent" spending. This ruling, based on the argument that limiting independent expenditures violates free speech, has resulted in a surge of private wealth influencing politics. However, it's important to note that not all corporations are heavily involved in political donations. Some major companies are notably absent from the list of top donors, suggesting that their business models may not rely as heavily on political connections.

While corporate donations can provide significant financial support to political parties, they can also lead to concerns about the influence of special interests and the potential for corruption. As a result, there have been increasing calls for public campaign financing and small donor matching to reduce the impact of corporate money in politics, which has been consistently prioritized by Americans across party lines.

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Soft money

The concept of soft money arose in the post-Watergate era, as a way to keep party organizations relevant and strong. Soft money was previously distributed through national party committees to bolster general party support. It was also used for overhead expenses, party-building activities, and shared expenses that benefit both federal and non-federal elections.

In 2002, the Bipartisan Campaign Finance Reform Act banned soft money in political contributions. However, soft money has since made a comeback in novel forms.

Hard money

Political parties in the US collect hundreds of millions of dollars each election cycle. Notably, the parties may only raise "hard money", which is distinct from "soft money". Hard money is money that is given by individuals and political action committees (PACs) and is subject to federal contribution limits. It is also known as regulated money, as it is governed by the Federal Election Commission (FEC).

The FEC enforces restrictions on money spent on political campaigns, and all expenses must be reported through a bank account monitored by the FEC. The FEC also governs public funding of presidential elections. Under the presidential public funding program, eligible presidential candidates receive federal government funds to pay for the qualified expenses of their political campaigns in both the primary and general elections. To be eligible to receive public funds, the presidential nominee of a major party must agree to limit spending to the amount of the grant and may not accept private contributions for the campaign.

In the 2024 election cycle, US political campaigns collected around $8.6 billion for the 2024 House, Senate, and presidential elections. Over 65% of that money, about $5.6 billion, came from PACs. Individual candidates have drawn over $2.0 billion, while party committees raised just over $929.9 million: $188.6 million for the Democratic National Committee, and $130.1 million for the Republican National Committee.

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