Introduction

Imagine you are running for student body president at your school. You solicit twenty-five dollars in contributions from other students and use the money to print off flyers to hand out in the cafeteria and buy markers and poster board to make signs to hang up in the hallways. What if you found out that your opponent took three hundred dollars from their wealthy parents to fund the purchase of cookies and ice cream for any student willing to vote for them? 

Background

Some students might say that it’s unfair for your opponent to take money from their parents. After all, not every family has the means to contribute equally, and student government is supposed to represent students, not parents. One thing is clear, though – you and your competitor have very different methods of financing your campaigns. The same is true for politics on the local, state, and federal levels in the United States. Campaign financing is a crucial part of the political process.

Financing Campaigns

The term “campaign finance” refers to the process of raising and spending money to advocate for a political candidate, party, or policy. In campaigns, money is key for funding outreach to prospective voters. This means that fundraising is directly related to the power a candidate has to get their message out and ultimately get elected. For this reason, the way campaigns are financed really matters.

How It Works

In the United States, campaigns are typically funded by donations. At the federal level, campaign donations generally come from four sources: the candidate’s own pockets, small individual contributors who donate two hundred dollars or less, large individual donors who donate over two hundred dollars, and political action committees, or PACs. Individuals are allowed to donate up to 2,800 dollars per election, while PACs and political parties can donate up to 5,000. While most corporations and organizations are unable to donate to campaigns directly, they are permitted to give money to PACs that donate to campaigns or work on their behalf. At the state and local level, laws differ as to who can donate to campaigns, and how much can be contributed. 

Public financing can also be an option for certain campaigns. For example, presidential candidates who are able to raise more than 100,000 dollars in private donations across at least 20 states are eligible to receive public funding from the Federal Election Commission. In order to take this money, however, candidates must agree to certain spending limits. These spending limits have made public financing less popular over recent years, as the overall amount of money in politics has steadily increased. In addition, a few states and cities offer a public funding option, although this is still uncommon in most state and local elections. Thus, campaigns are almost always privately financed. 

So What?

We know that since campaigns need funding to reach voters, money plays an important role in politics. For a representative democracy, this can be a tricky issue. In order for voters to be informed about their candidates’ loyalties, we must have a clear and transparent reporting process for candidates to disclose how their campaigns are financed. We must also ensure that contribution limits are enforced so that wealthier donors and corporations are not given an implicit advantage in the political process.

    Learn More

    1. Mutch, Robert E. Campaign Finance: What Everyone Needs to Know. Oxford University Press, 2016. 
    2. “Introduction to campaign finance and elections.” Federal Election Commission, https://www.fec.gov/introduction-campaign-finance/.
    3. Center for Responsive Politics. “The Top 10 Things Every Voter Should Know About Money-in-Politics.” OpenSecrets.org, https://www.opensecrets.org/resources/dollarocracy/. 

    Think Further

    1. Should there be a limit on how much political candidates can raise and spend? 
    2. What are the benefits of a publicly funded campaign finance system as opposed to relying on private donations?
    3. How do you think contribution limits should be decided?

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