A Guide To Legal Political Donations and Campaign Finance

Elections are what makes a democracy a democracy. For democracy to work, the people must know that the elections are fair. This requires accurate and transparent information about who is financing campaigns. The laws of political donations and campaign finance aim to make things fair. This article provides an overview of those laws. 

If you have questions about campaign finance, reach out to an experienced voting civil rights lawyer today. 

Campaign Finance 

Campaign finance refers to the money that candidates, political parties, or policy groups raise for elections. Candidates use this money to run a successful political campaign. Campaigns must pay for advertising, travel, and staff salaries. The Federal Election Commission (FEC) oversees campaign finance at the federal level. It enforces laws like the Federal Election Campaign Act (FECA), setting the framework for contribution limits and reporting requirements. 

Contribution limits are a cornerstone of campaign finance laws. These limit how much money individuals, political action committees (PACs), and other entities can give in a calendar year. For instance, individuals can contribute up to a certain amount to a candidate’s campaign per election cycle. This includes both primary and general elections. 

Campaign finance laws also treat contributions and independent expenditures differently. Contributions are direct donations to a candidate’s campaign or a political party. However, independent expenditures are funds spent independently without coordinating with the campaign. They can use these funds to advocate for or against a candidate or policy.

Super PACs can raise and spend unlimited amounts of money and engage primarily in independent expenditures. 

The PAC and the Super PAC

Political action committees (PACs) play a significant role in campaign finance. PACs are organizations that pool contributions from members and donate those funds to campaigns, parties, or other PACs. There are different types of PACs, including traditional PACs and Super PACs. Traditional PACs are subject to contribution limits, while super PACs can raise unlimited funds for independent expenditures. 

Campaigns and the FEC 

Federal candidates running for office must comply with FECA and FEC regulations. This includes federal offices for members of the Senate or House of Representatives. These candidates must establish authorized committees to handle their campaign funds and correctly report all political contributions and expenditures.

The reporting requirements mandate that candidates disclose the total contributions received, including in-kind contributions and contributions from lobbyists and other entities. These reports are public, enhancing transparency and allowing voters to see who financially supports each candidate. 

The FEC also enforces prohibitions on certain types of contributions. For example, foreign nationals and federal contractors cannot contribute. Additionally, there are restrictions on the use of personal funds and the acceptance of anonymous donations. 

Public records are an essential tool for transparency in campaign finance. The FEC and state authorities maintain databases of campaign finance reports. This gives the public access to information about contributions, expenditures, and the financial activities of candidates and campaign committees. These records help voters make informed decisions and hold candidates accountable. 

Raising Funds for Election Campaigns

Candidates and their committees must continuously raise funds to support their activities. Fundraising methods include direct mail, online donations, fundraising events, and solicitation of contributions from supporters. Credit cards, money orders, and other payment methods must be carefully tracked. Proper accounting ensures compliance with campaign finance laws. 

Campaign finance also involves aggregate contributions. Aggregate contributions refer to the total amount of money a contributor can donate to multiple candidates, party committees, and PACs within a specific period. The FEC limits aggregate campaign contributions to prevent excessive influence by any single donor. 

Campaign Finance Laws 

The United States Supreme Court plays a big role in campaign finance. Most significantly, the Supreme Court decision in Citizens United v. FEC reshaped the landscape of campaign finance laws. In Citizens United, the Court ruled that corporations and unions can make unlimited independent expenditures. This led to the rise of Super PACs and significant changes in campaign financing. 

Nonprofit organizations can also engage in political advocacy. However, they must navigate complex regulations to maintain their tax-exempt status. Nonprofits can engage in issue advocacy. They can also promote policies without explicitly supporting or opposing candidates. However, if they engage in direct political activities, they may need to register as PACs or follow reporting requirements. 

When you hear a candidate say that they approved the ad following a candidate’s ad? That’s another important aspect of campaign finance in action. Political advertisements must include disclaimers indicating who paid for the ad and whether a candidate authorized the message. These disclaimers ensure transparency and inform voters about the funding sources.

Campaign finance laws also address the use of campaign funds. Candidates must use campaign funds for legitimate campaign-related expenses. They cannot use funds for personal purposes. Misusing campaign funds can lead to legal penalties and damage a candidate’s reputation. 

State Political Donation Laws

State laws can also impact campaign finance, adding another layer of complexity. State laws may impose additional contribution limits and reporting requirements. Some states require frequent disclosures or have stricter limits on donations. Candidates and political organizations have to comply with both federal and state laws. 

Each state’s secretary often oversees state-level campaign finance regulations and ensures compliance. Candidate committees must work with state officials to meet all legal campaign requirements.  Campaign finance is a complex and ever-evolving field. This includes changes in federal laws, state regulations, and court decisions. If you have questions or concerns about political fundraising, contact a local voting civil rights attorney.