Cries abound about the ever-increasing amount of money in politics. Despite the exposure given to campaign finance, how the money moves through the system and impacts elections remains a mystery to most. WhichWayNC breaks down the ins, outs and backdoors of campaign finance with the Guide to Campaign Cash Flow.
Click on the items in the image to learn more.
Individual
Individuals have the most options in where they can donate their money, but those donations have limits and must be reported to an elections board. Through 2010, individual donations to candidates remained the largest source of campaign funding. Recent changes to campaign finance law have made it easier for individuals to use outside groups as a means to infuse more money into the political process. Donors can give as much as they want to these groups, which allows them to make targeted donations to specific efforts like defeating a candidate or promoting a political issue.
Donating limits
Candidate
- $5,000 limit for federal candidates per election.
- $4,000 limit for NC candidate per election.
- These donations are reported to an elections committee, so anyone can see who you gave to this election cycle.
Party
- $30,800 limit for national party per year.
- $10,000 limit for state and local party per year.
- These donations are reported to an elections committee, so anyone can see where your politics lie.
PAC
- $5,000 limit to national Political Action Committee per year.
- $4,000 limit to NC Political Action Committee per year.
- These donations are reported to an elections committee, either the Federal Elections Commissioner or State Board of Elections.
Social Welfare Group
- Unlimited donation limit to Social Welfare Groups (not required to disclose donors).
- These donations are not reported to an elections committee.
Read more about the individuals donating to the NC governor’s race.
Organizations
Federal law prohibits corporations and labor unions from donating directly to political campaigns. For most of the 20th century, these organizations avoided federal regulation by donating “soft money” to political parties to influence elections. Since the McCain-Feingold Act outlawed soft money in 2002, these organizations have directed more and more money toward advocacy groups known as 527s. The Citizens United decision in 2010 has allowed these 527s to spend unlimited amounts on outside political activity. In other words, the ruling enabled organizations to inject more money indirectly into the political process.
Donating limits
Candidate
- Not allowed to donate to individual campaigns.
Parties
- Not allowed to donate to political parties.
PACs
- Can create their own Political Action Committee to raise money and donate to campaigns and candidates for them. Instead of using their own money to support their cause, they get donations from voters.
Social Welfare Group
- Unlimited donation limit to Social Welfare Groups.
- These donations do not have to be disclosed.
Super PACs
- Unlimited donation limit to Super PACS.
- These donations are publicly disclosed.
Read more about big business spending on NC politics.
PAC
Political Action Committees, commonly known as PACs, have existed for most of the 20th century. They are typically created by businesses or unions and represent the interests of their founders by advocating for or against a candidate or piece of legislation. Like individuals, PACs are limited in how much they can donate to campaigns. For example, PAC money must come exclusively from individuals and not from the founding organization’s treasuries. But because of a technicality, PACs don’t have to report their donors until after election day. If you don’t want the public to know which politicians you rubbed elbows with at the fundraising cocktails, the PAC is the way to go.
Donating limits
Candidates*
- $5,000 limit for federal candidates per election.
- $4,000 limit for NC candidate per election.
Party*
- $15,000 limit for national parties per year.
- $10,000 limit for local and state parties per year.
Social Welfare Group
- Unlimited donation limit to Social Welfare Groups.
- These donations do not have to be disclosed.
Super PACs
- Unlimited donation limit to Super PACS.
- These donations are publicly disclosed.
*donation limits are based on the “multicandidate PAC” classification. A PAC is multicandidate if it has more than 50 donors, has been registered for six months, and has made contributions to at least five campaigns.
Candidate
The success of a campaign is almost exclusively linked to the candidate’s balance sheet. The more a candidate spends, the more likely he or she will win. Donation limitations are imposed at all levels and every campaign is required to report both donations and expenditures to its respective elections board. Every election is more expensive than the last and the candidate’s responsibilities are as much about fundraising as they are about promoting his or her policies. Large donations buy influence and a foot in the politician’s door when important legislation comes up.
Read more about candidate spending.
Party
The political party is the backbone of a campaign at any level. In addition to selecting and endorsing candidates, the party serves as the major organizational and promotional structure for a campaign. Before 2002, donors were allowed to give unlimited amounts of “soft money” to campaigns that was then funneled to candidates. Donations to a political party are typically made in support of the party’s agenda and to aid in selecting suitable candidates. However, with the recent increase of outside spending, donors have more freedom to create advertising and advocacy that isn’t tied to a particular party agenda.
Donating limits
Candidates
- $5,000 limit for federal candidates per election.
- $4,000 limit for NC candidate per election.
PACs
- $5,000 limit for a national Political Action Committee per year.
- $4,000 limit for a NC Political Action Committee per year.
Super PAC
Only a few months after Citizens United, a different court decision threw another wrench into campaign finance. SpeechNow.org v. Federal Exchange Commission allowed groups described as independent-expenditure commissions to spend unlimited amounts of money on political advertising as long as they did not contribute to or coordinate with a candidate. This means that unlike social welfare groups, super PACs can put all their money toward political activities, like attack ads. The only downside: super PACs must report their donors to the Federal Election Commission. As long as you don’t mind your donations being open to the public, super PACs provide the most political bang for your buck.
Read more about nonprofit organization donations.
Social Welfare Groups
The social welfare group is the latest organization to rise to popularity in the increasingly shadowy world of campaign finance. Created as tax-exempt nonprofits, these groups are the most unregulated when it comes to campaign finance. Social welfare groups are free from FEC oversight and spending limits as long as political advocacy isn’t their only function, a regulation that has proven difficult to enforce. Formally know as independent expenditure committees, the appeal of social welfare groups is obvious: the combination of undisclosed donors and unlimited spending limits. All the money you can spend and no pesky elections commission breathing down your neck, what more can you ask for?
Donating limits
Super PACs
- Unlimited donation limit to Super PACS.
- These donations are publicly disclosed.
Spending
Elections cost money. Lots of money. More and more money every year. Campaigns need everything from coffee to campaign flyers. Air time for political ads can run into the millions of dollars. But it costs money to win and most people aren’t afraid to spend it.
Advertising
- Television advertising is the single largest expenditure for campaigns during an election. Almost $250 million has already been spent in the 2012 election on political advertisements. The FEC places restrictions on electioneering communications 60 days before the election, but until then it is pretty much open season on candidates and their policies. Social welfare groups and super PACs in particular have added fuel to political fire, focusing a majority of their efforts into churning out attack ads.
Read more about political ads.
