Campaign Finance 101: Key Terms You Should Know

As the peak of election season draws near, your organization or company may become more frequently involved in discussions surrounding campaign finance. Such conversations are filled with terms and concepts that will ultimately define the important decisions that you make related to your campaign finance program. Here are some common terms that you may encounter. We’ve also included citations in the event that you’d like to read more about any of these terms or definitions. 

PAC (Political Action Committee)

Political Action Committee (PAC) is a popular term for a political committee that is neither a party committee nor an authorized committee of a candidate. PACs that are directly or indirectly established, administered, or financially supported by a corporation or labor organization are called “separate segregated funds.” PACs without such a corporate or labor sponsor are called “nonconnected PACs” (FEC). 

Separate Segregated Funds (SSF)  

Separate Segregated Funds (SSF) are a political committee established, administered, or financially supported by a corporation or labor organization, popularly called a Corporate or Labor PAC (11 CFR 114.1(a)(2)(iii)). The term "financially supported" does not include contributions to the SSF, but does include the payment of establishment, administration, or solicitation costs (11 CFR 100.6(c)). 

Nonconnected Committee 

A nonconnected Committee is any committee that conducts activities in connection with an election, but that is not a party committee, an authorized committee of any candidate for federal election, or an SSF (11 CFR 106.6(a)). 

Super PAC 

A Super PAC is a political committee that makes only independent expenditures that may solicit and accept unlimited contributions from individuals, corporations, labor organizations, and other political committees. Super PACs may not accept contributions from foreign nationals, federal contractors, national banks, or federally chartered corporations (AO 2010-11). Such committees, also known as “independent expenditure only committees,” must register with the Federal Election Commission (FEC) and comply with all applicable reporting requirements of the Act (FEC). 

Independent Expenditure  

An independent expenditure is an expenditure for a communication that expressly advocates the election or defeat of a clearly identified candidate; and that is not made in cooperation, consultation, or concert with, or at the request or suggestion of, any candidate, or his or her authorized committees or agents, or a political party committee or its agents (11 CFR 100.16). Individuals, groups, corporations, labor organizations, and political committees (including SSFs, party committees, and nonconnected committees) may support or oppose candidates by making independent expenditures. Independent expenditures are not contributions and are not subject to limits (FEC). 

Candidate Committee 

A candidate committee is a political committee other than a principal campaign committee that makes or receives contributions or makes expenditures on behalf of only one candidate (11 CFR 100.5(e)(2)). 

Leadership Committee 

A leadership committee is a political committee that is directly or indirectly established, financed, maintained, or controlled by a candidate or an individual holding federal office, but is not an authorized committee of the candidate or officeholder and is not affiliated with an authorized committee of a candidate or officeholder (11 CFR 100.5(e)(6)). 

Political Party Committee 

Federal law defines a national committee as an organization that, by virtue of the bylaws of a political party, is responsible for the day-to-day operation of the party at the national level, as determined by the Commission. A Political Party Committee should seek an FEC advisory opinion to verify that it has attained national committee status before taking advantage of the expanded contribution and expenditure limits that apply to a qualified national committee. The FEC will decide whether the committee or the party has demonstrated sufficient national-level activity to qualify, based on the criteria listed below:

• The party’s ballot access efforts must extend beyond the presidential races to races for the U.S. Congress. The party must have a sufficient number of party-designated federal candidates on the ballot in a sufficient number of states in different geographic areas to meet this requirement; 

• The committee must engage in activities such as voter registration drives on an ongoing basis (rather than with respect to a particular election); 

• A national committee must publicize, on a national basis, issues of importance to the party and its adherents such as through print or on a party website. This activity might involve publishing the party’s philosophy and positions, issuing press releases and distributing a national newsletter; and 

• Other factors that indicate that a party committee has attained national status include holding a national convention; setting up national headquarters; and establishing state party committees. 

While national party committees are not entitled to exemptions in the law that encourage grassroots activity, they have other advantages. They can make coordinated party expenditures on behalf of House, Senate, and presidential nominees. Moreover, they have higher limits on the contributions they raise than other committees (FEC; 11 CFR 100.5(e)(4)). 

Additional National Party Committee Accounts 

National party committees may establish accounts to defray certain expenses incurred concerning: 

• Presidential nominating conventions, 

• National party headquarters buildings, and 

• Election recounts and contests and other legal proceedings. 

These segregated accounts may accept contributions up to three times the amount of the party’s regular contribution limit and are subject to certain prohibitions (FEC; 52 U.S.C. § 30116(a)(1)(A), (a)(2)(b), (a)(9)(A), (a)(9)(B) and (a)(9)(C)). 

Joint Fundraising Committee 

A joint fundraising committee is a committee that has been set up for the purposes of fundraising for multiple committees at the same time or an existing committee that has been authorized to serve that purpose (FEC). 

Hybrid PAC 

A hybrid PAC is a committee that, in addition to making contributions, establishes a separate bank account to deposit and withdraw funds raised in unlimited amounts from individuals, corporations, labor organizations, and/or other political committees, consistent with the stipulated judgment in Carey v. FEC. The funds maintained in this separate account will not be used to make contributions, whether direct, in-kind, or via coordinated communications, or coordinated expenditures, to federal candidates or committees (FEC).

Blackout Period 

Blackouts are the time frame in which legislative candidates and their committees may not accept or solicit contributions from individuals, lobbyists, lobbyist principals, PACs, etc. While different states adopt and implement their own laws regarding blackout periods, they are most frequently centered around legislative sessions. 

Types of Contributions

In-Kind Contribution/Expenditure 

In-kind contributions and expenditures are contributions of goods, services, or property offered free or at less than the usual and normal charge. The term also includes payments made on behalf of, but not directly to, candidates and political committees (except for independent expenditures or non-coordinated communications) (11 CFR 100.52(d)). 

Dark Money 

The term “dark money” is typically used to describe funds that originate from sources that have no disclosure requirements under existing campaign finance law. In a majority of jurisdictions, politically active 501(c)(4) organizations are under no obligation to disclose their funding sources, even if these funds are spent to influence elections. Meanwhile, Super PACs have no limit on the amount of contributions they may receive, and thus are often the recipients of such contributions from 501(c)(4)s and other dark money groups. This enables Super PACs to make an unlimited number of expenditures without having to disclose the true source of funds. 

Bundled Contribution 

A bundled contribution is a contribution forwarded to a reporting committee by a lobbyist/registrant or lobbyist/registrant PAC (a “bundler”), or received by a reporting committee and credited to a lobbyist/registrant or lobbyist/registrant, PAC. This practice is commonly referred to as “bundling” (11 CFR 104.22(a)(6)).  

Hard Money 

Hard money is cash or consideration paid directly to a candidate, party committee, or PAC, that is governed by FEC or state regulations, such as individual contribution limits. Hard money may be used to expressly advocate for a specific candidate or electoral outcome. “Consideration” includes anything of monetary value given to a committee, such as an in-kind contribution. It may not be a cash donation, but it still counts against contribution limits.

Soft Money 

Soft money is a political contribution that is not subjected to the limits imposed by FEC or state regulations. Thus, any entity is allowed to make unlimited soft money contributions, which traditionally fund get-out-the-vote efforts, party building, and similar activities. However, these funds may not be used to advocate for or against political candidates. 

Straw Man Contributions 

Straw man contributions are contributions that are made by an individual in their own name by using another person’s money, often through the use of a shell company. This practice is illegal in many jurisdictions as it circumvents individual contribution limits and conceals the true source of funds (Congressional Research Service p. 9).

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