Updated: Jun 7
Small children are often asked, "What would you like to be when you grow up?" Common answers include a doctor, a policeman, a fireman, a veterinarian, or even president. Although it may seem that an individual just needs a platform, a voice, and the support to be elected for a political office, it actually requires a great deal of money. The money required to run for office continues to increase.
Over the last ten years, there has been a 155% rise in the cost of running for Congress. There has been a 69% rise in the cost of running for president.
What is this money used for and where does it come from?
Where Does the Money Go?
The biggest use of campaign funds is for getting the candidate's message to the people. This involves advertising, media, and communications.
Additionally, the candidate usually hires a staff to manage and plan their campaign. The size of their staff impacts the amount spent in a particular area.
Finally, the candidate also needs to travel and interact with voters on the road. This can be a significant expense and varies based on chosen modes of transportation and other travel expenses.
To learn more about what famous politicians have used their money for in their campaigns, click here.
Main Sources of Campaign Funds
The Federal Election Commission is responsible for overseeing the finances that are raised for elections and is charged with making this information available to voters. This agency was developed in 1975 and its purpose is to support transparency and administer and enforce campaign finance law.
1. Individual Contributions
Individuals consistently contribute to candidates, either intentionally or unintentionally. Some of the money that supports elections comes through taxes. Taxes help support conventions and also run the polls. Individuals have the option to contribute to the election fund when they complete their tax return form. Individuals may intentionally choose to donate to the campaign of their favorite candidate with small or large contributions. They may do this because they believe in the candidate or they are hoping that the candidate will return a favor to them or support their cause at some point in the future.
PACs stands for Political Action Committees. They were developed in 1944 and their main purpose is to support the election of a particular candidate. There are many types of PACs and they are all under the oversight of the FEC. They are to report the funding raised for a candidate. There are different types of PACs. Some are associated with particular labor unions, corporations, or trade organizations. Other PACs are not associated with a business and are called nonconnected PACs.
3. Super PACs
Super PACs are more controversial and came about because of a suit by Citizens United against the FEC. Citizens United claimed that campaign finance restrictions limited the freedom of speech. As a result of the Supreme Court ruling in favor of Citizens United, the federal government cannot limit the fundraising activities of corporations, unions, or individuals for a particular candidate.
Super PACs are independent expenditure-only committees and can raise as much money as they want to raise for a candidate but are not supposed to accept or raise money from international or foreign entities. Super PACs are still to register and report their fundraising results to the FEC. According to Thought.co, Super PACs spent millions in the first election in which they could function (2012) and h
ave been reported to have spent $1.4 billion in the 2016 election.
4. Dark Money
Since the Citizens United ruling and the formation of Super PACs, there have also followed fundraising efforts by unidentified groups that are not registered as PACs or Super PACs.
What Is Dark Money?
Dark money are unknown sources of political funding and often involve nonprofit 501(c) groups or social organizations. They can spend an unlimited amount of money for a particular candidate, like Super PACs. However, they are not required to disclose any information to the FEC about their donations or campaign spending. This means that their source of funding is unknown. These groups could spend a great deal to influence elections and the public may be unaware of this fact.
Funding by Sectors
Data is also available that shows how different sectors and industries have contributed to political parties. Several groups contributed equally to both parties such as real estate, retired people, securities and investment, health professionals and finance. Other groups contributed more to one party than the other. For example, the education, environment, and law sectors primarily contributed to Democrats. Oil and gas, retail and insurance sectors contributed more to the Republican party.