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Campaign Finance 101: A Deep Dive into Political Fundraising

A politician at a fundraising event for his next electoral election

Political fundraising is complicated, and politicians don’t much like discussing it. Although many people know it exists, far fewer understand how fundraising actually works.

How do political candidates and parties raise money? Who are the donors? And what impact do donations actually have on politics?

RSnake sat down with Pasha Moore, a veteran political fundraiser, to separate the myth from the reality of political fundraising.

Behind the Scenes of Political Fundraising

Political fundraising isn’t all about hosting fancy events, though according to Moore, that’s part of it. She explained the most important aspect of fundraising is about building relationships.

But how is that done?

First, fundraisers put time into researching potential donors. Moore explained, “All of political giving is public record for candidates and campaigns.” Using these records, fundraisers compile lists of possible benefactors and begin working with candidates to contact them.

Once a fundraiser is in touch with a donor, the process of relationship building (or cultivation) begins. Moore explained that candidates may call donors or meet them in person. Large donations are often solicited over several meetings.

The final and arguably most important part of fundraising is soliciting donations. “The thing that people forget the most about fundraising is you have to ask for money,” said Moore. She explained this part can be difficult for some candidates.

Another little-known aspect of raising money is that many professional fundraisers, including Moore, are motivated by more than just money. “You believe in who you’re working for,” she said.

How to Persuade People to Donate to Political Campaigns

Persuading donors to part with their money isn’t always easy. Moore noted that wealthy donors with a history of giving are often inundated by requests. “I can’t even begin to imagine how many phone calls, emails, pieces of mail they get on a daily basis,” she said.

As a result, Moore explained most of her effort is spent making initial contact with donors. “Getting them in the room is 90% of it. Getting them on the phone is 90% of it,” she said.

As a result, fundraisers must be savvy. They may keep dossiers on major donors that outline their interests and history of giving. Messages to significant benefactors may be customized to their specific interests to help cut through the noise.

Once the coveted meeting or phone call is arranged, fundraisers will help candidates prepare with briefing notes. These notes alert candidates to topics that should be stressed or avoided.

However, according to Moore, it’s not all smoke and mirrors. “So much of it comes back to who is the candidate, who is the donor, and who has the relationship than it does with bells and whistles,” she said. “They are giving money because they want something to happen or not to happen, legislatively, politically, policy-wise.”

She also explained that donors are quite savvy. “People who are perennial donors to political campaigns usually have a pretty good nose for who’s a winner and who’s a loser,” she said.

Moore also noted there are no formulas for success. Even when interests seem perfectly aligned, donors may change their minds for various reasons.

Understanding the Impact of the Citizens United v. FEC Decision

Citizens United v. the Federal Election Commission (FEC) is a landmark case that ultimately changed how corporations and individuals could make political donations.

In deciding on the case, the Supreme Court ruled that corporations (including non-profits) should have the same rights to free speech as individuals. According to the Encyclopedia Britannica, at the time, section 441(b) of the Federal Election Campaign Act was written in such a way that allowed corporations and individuals to be legislated differently regarding free speech.

The ruling also set a new precedent by determining that independent political action committees (PACs) were not at risk of corruption. Since these types of PACs didn’t take direction from a candidate or party, the justices reasoned, there would be no risk of exchanging money for political influence.

As a result, the U.S. Court of Appeals ruled in a subsequent case ( v. the FEC) that people could donate unlimited amounts to independent political committees.

This led to what are commonly known as Super PACs. These organizations can receive unlimited amounts of money from individuals or organizations for independent expenditures. As defined by the FEC, these are basically advertisements and can include newspaper ads, television commercials, direct mail, etc.

Corporate vs Individual Donations: A Comparative Analysis

There are different rules governing individual and corporate donations. Both play an essential role in politics.

Individuals can donate a limited amount directly to candidates and political parties. As of 2023, someone could donate up to $3,300 annually to a candidate’s campaign. Higher limits are set for donations to political parties. The maximum individual contribution to a party is $123,900 for special accounts that pay for presidential conventions and national party headquarters, among other things.

Organizations (including unions and corporations) cannot donate directly to a campaign or political party. They can, however, create a specific type of PAC called a Separate Segregated Fund (SSF). SSF contributions to campaigns or parties have similar limits as individuals.

Both individuals and organizations can donate unlimited funds to Super PACs.

Determining how much individuals and corporations contribute each election cycle is complex. The money in PACs and Super PACs often ends up in a single pool that is difficult to trace. The donations to Super PACs, in particular, lack transparency.

However, some research shows that individuals, not corporations, donate more money to Super PACs.

There is little doubt that Super PACs carry real weight in modern elections. Statistics from the FEC on spending in the 2019-2020 election cycle showed some interesting results. While approximately $8.1 billion was raised for presidential and congressional campaigns, Super PACs raised and spent over $11 billion.

The Role of PACs in American Politics

Political action committees (PACs) have been part of American politics since the 1940s. They are seen as relatively harmless, while there is more controversy surrounding Super PACs.

Although Super PACs have existed for over a decade, there isn’t much solid evidence regarding the nature of their influence. One 2017 paper out of Columbia Law School stated Super PACs had a substantial impact on election funding. But, it stressed that the individuals and organizations behind them had a wide range of interests.

In Moore’s opinion, since Super PACs are tools any political party or candidate can use, they are fair. “Anything the opposition to you and your interests and your party can do, you can do it too. Everything’s equal on that front,” she said.

However, critics of Super PACs state they give too much license for wealthy individuals or corporations to exert their influence. A grassroots politician wanting to increase taxes on the wealthy, for example, likely wouldn’t be supported by a Super PAC. As a result, it would be difficult for this politician to compete against an opponent with the millions of advertising dollars Super PACs can provide.

Public suspicion over corporate dollars in politics has led politicians on both sides of the aisle to pledge not to accept corporate donations.

However, this promise may be largely symbolic. As discussed earlier, corporations cannot donate directly to a candidate or party except through an SSF (traditional PAC with specific regulations). But even candidates who swear off corporate donations may still receive the benefits of extra advertising from the independent Super PACs. As a result, the amount these politicians may be refusing is relatively small. According to FEC statistics, Super PAC revenues ($11.2 billion) far outpaced those of traditional PACs ($2 billion).

Where Campaign Money Goes: A Detailed Breakdown

Political donations may be spent on a number of things, from yard signs to candidate travel and, of course, advertisements.

Moore explained that broadcasting corporations often raise their rates during campaign season. Making television commercials and paying for air time can cost millions, even billions of dollars.

Still, other expenses must be taken into account. According to OpenSecrets, in the 2021-2022 midterm election cycle, 44.9% of campaign dollars were spent on media. Then there are other expenses, such as fundraising, staff salaries, administrative costs, and strategy and research. The OpenSecrets report also showed an intriguing “unclassifiable” category. Here’s how these expenses broke down:

  • Fundraising: 12.95%

  • Staff salaries: 8.93%

  • Administrative: 8.11%

  • Strategy and research: 5.41%

  • Unclassifiable: 11.27%

Effective Strategies for New Political Candidates

RSnake and Moore discussed how someone newly interested in politics could begin to build a career. Moore suggested that those new to the political scene start local.

Since fundraising is ultimately about relationships, Moore explained that establishing local networks is integral. “If you really do want to be engaged at that level and you want to run for office, I recommend before you do that, you get actively involved in your United Way chapter, your Red Cross chapter… If you’re a church-going person, go to church,” she said.

She also stressed that politicians must be comfortable asking for money, first from family and friends. Moore said, “I always tell people, start asking for money from your Christmas card list.”

Moore also explained that significant donors won’t contribute to a candidate without strong local support in their hometown. She said, “John Doe typical major donor who can make or break your campaign, will always ask first, ‘Well, what’s your local support like?’ He’s not talking about the people who are going door to door for you; he wants to know how many of your friends have given you money or if you’ve looked at him like he’s going to be Daddy Warbucks.”

The Takeaway

Fundraising ultimately helps determine which candidates ascend to office and which ones don’t.

However, voters do still have a say. There are no formulas for political success. Moore said winning depends on “getting 50 plus one percent of the voters to vote for you. It depends on where you live; it depends on where the race is. There is no silver bullet.”

For more on the inner workings of political fundraising, tune into RSnake’s conversation with Moore now!


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