US political fundraising regulations?

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Political fundraising laws in the US ensure fairness for all candidates. Individual donors are the primary source of federal political fundraising, with strict limits on donations. Political action committees are second, with no overall limit on contributions. Companies and unions cannot contribute, and 527 groups can only donate soft money. Disclosure is required, and candidates can receive a special subsidy if they follow spending limits. Candidates can opt out to raise more money privately.

Political fundraising and campaign finance laws in the United States help ensure a level playing field for all candidates who wish to run. Although political fundraising laws apply to state and local elections, the public tends to take more interest in this issue during the presidential election year.

At the federal level, individual donors are the primary source of political fundraising. However, there are strict limits placed on the amount of money an individual can donate. For example, in 2008 the cap was set at $2,300 US Dollars (USD) for each candidate and $28,500 USD for each National Party Committee with a cap of $108,200 USD for the overall biennial cap.

Political action committees are a distant second when it comes to political fundraising at the federal level. Like individual contributions, money from political action committees is classified as hard money. In 2008, a multi-candidate political action committee could give $5,000 USD to each candidate and $15,000 USD to a national party committee, but there is no overall limit set on contributions from this source.

Current campaign finance laws prohibit companies and unions from contributing to a candidate’s fundraising efforts. Contributions from 527 groups, a special type of tax-exempt organization, are only permitted when they are not directly related to candidates’ campaigns and do not advocate support or opposition for a particular candidate. For this reason, these types of campaign contributions are known as soft money. Unlike campaign contributions classified as real money, light money donations are not heavily regulated by the Federal Election Commission.

Disclosure is an important part of political fundraising regulations. Political action committees, candidate committees, and party committees are required by law to submit periodic reports detailing the money they raise and spend. In the interest of accountability, names, addresses, occupations and employers must also be provided for any individual who donates more than $200 USD in a single election cycle.

For the presidential election, candidates who have privately raised $5,000 USD each in at least 20 states are eligible for a special subsidy that is dollar-for-dollar up to a limit of $250 USD per contribution. In exchange for accepting this subsidy, however, applicants must agree to follow a special statutory formula which places limits on their spending. While traditionally most candidates have chosen to accept these matching funds, it is becoming more common for candidates to opt out of the program in order to leave them free to spend as much money as they can raise through private campaign donations and political fundraising efforts.




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