🗳️Political Campaigns Unit 6 – Campaign Finance and Fundraising

Key Concepts and Terminology

• Campaign finance encompasses the fundraising and spending activities of political campaigns, including candidates, political parties, and political action committees (PACs)
• Hard money refers to funds raised directly by a candidate's campaign committee, subject to contribution limits and disclosure requirements
  • Includes donations from individuals, political parties, and PACs
• Soft money refers to funds raised by political parties or outside groups, not subject to the same contribution limits and disclosure requirements as hard money
  • Often used for "party-building" activities and issue advocacy
• Independent expenditures are funds spent by individuals or groups to support or oppose a candidate, without coordinating with the candidate's campaign
• Electioneering communications are broadcast ads that mention a candidate within a certain timeframe before an election, subject to disclosure requirements
• Issue advocacy refers to ads or communications that focus on political issues without explicitly advocating for or against a candidate
• Bundling is the practice of collecting multiple individual contributions and presenting them to a campaign as a single larger donation, often by wealthy or well-connected donors

Legal Framework and Regulations

• The Federal Election Campaign Act (FECA) of 1971 established the basic framework for federal campaign finance regulation
  • Created the Federal Election Commission (FEC) to oversee and enforce campaign finance laws
• The Bipartisan Campaign Reform Act (BCRA) of 2002, also known as McCain-Feingold, amended FECA to address concerns about soft money and issue advocacy
  • Banned national parties from raising or spending soft money
  • Restricted electioneering communications by outside groups
• The Citizens United v. FEC Supreme Court decision in 2010 struck down key provisions of BCRA, allowing corporations and unions to make unlimited independent expenditures
• The SpeechNow.org v. FEC decision in 2010 led to the creation of super PACs, which can raise and spend unlimited funds on independent expenditures
• State and local campaign finance laws vary, with some imposing stricter contribution limits and disclosure requirements than federal law
• Campaigns must comply with reporting requirements, disclosing contributions and expenditures to the FEC or relevant state agency on a regular basis

Types of Campaign Funding

• Candidate committees are the official fundraising entities of a candidate's campaign, subject to contribution limits and disclosure requirements
• Political party committees, such as the Democratic National Committee (DNC) and Republican National Committee (RNC), can raise and spend money to support their party's candidates
• Political action committees (PACs) are organizations that raise and spend money to support or oppose candidates or issues
  • Connected PACs are affiliated with corporations, labor unions, or trade associations
  • Non-connected PACs are independent organizations focused on a particular issue or ideology
• Super PACs can raise and spend unlimited funds on independent expenditures, but cannot coordinate with candidates or parties
• 501(c)(4) organizations, also known as social welfare organizations, can engage in political activities but cannot have politics as their primary purpose
  • Not required to disclose their donors
• Small-dollar donations from individual supporters have become increasingly important, especially for grassroots and insurgent campaigns
• Self-funding, where wealthy candidates use their own money to finance their campaigns, can give them a significant advantage but may also raise concerns about buying influence

Fundraising Strategies and Techniques

• Direct mail fundraising involves sending solicitations to potential donors via postal mail, often targeting previous donors or likely supporters
• Telemarketing and phone banking can be used to reach out to potential donors and solicit contributions
• In-person fundraising events, such as dinners, receptions, and rallies, allow candidates to interact with donors and raise money
  • Often feature different contribution levels or perks for higher-dollar donors
• Peer-to-peer fundraising leverages the social networks of supporters to raise money from their friends and contacts
• Bundling by well-connected donors can help campaigns tap into larger donor networks and raise significant funds
• Grassroots fundraising focuses on small-dollar donations from a large number of supporters, often emphasizing a candidate's message or ideology
• Campaigns may offer merchandise, such as t-shirts, hats, and bumper stickers, as a way to raise money and promote their brand
• Matching funds, where a donor agrees to match contributions up to a certain amount, can incentivize supporters to give

Digital and Social Media Fundraising

• Online donation pages allow supporters to contribute to a campaign through the internet, often with recurring donation options
• Email fundraising involves sending solicitations and updates to a campaign's email list, which can be segmented based on donor history or interests
• Social media platforms, such as Facebook, Twitter, and Instagram, can be used to promote fundraising appeals and engage with supporters
  • Campaigns may use targeted advertising to reach specific demographics or interests
• Peer-to-peer texting allows campaigns to send personalized fundraising appeals and updates to supporters' mobile phones
• Crowdfunding platforms, such as GoFundMe or ActBlue, can help campaigns raise money from a large number of small-dollar donors
• Gamification techniques, such as fundraising challenges or rewards, can encourage supporters to donate and share a campaign's message
• Influencer partnerships with popular social media personalities can help campaigns reach new audiences and raise money
• User-generated content, such as supporter testimonials or fundraising challenges, can help campaigns build authenticity and trust with potential donors

Financial Management and Reporting

• Campaigns must maintain accurate records of all contributions and expenditures, including donor information and dates of transactions
• Contribution limits vary based on the type of donor and recipient committee
  • Individual contributions to candidate committees are limited to $2,900 per election as of 2021
• Campaigns must file regular reports with the FEC or relevant state agency, disclosing their financial activities
  • Quarterly reports cover three-month periods, while pre-election and post-election reports provide more timely information
• Campaigns should have a dedicated compliance team or consultant to ensure they are following all relevant laws and regulations
• Proper budgeting and cash flow management are essential to ensure a campaign has the resources it needs throughout the election cycle
• Campaigns may need to navigate complex issues such as in-kind contributions, joint fundraising agreements, and recount or legal defense funds
• Transparent and ethical financial management can help campaigns build trust with donors and the public

Ethical Considerations

• Campaigns should avoid any appearance of impropriety or undue influence from donors, particularly those with business before the government
• Quid pro quo arrangements, where donations are explicitly tied to official actions, are illegal and unethical
• Campaigns should have clear policies on accepting donations from controversial sources, such as corporations with a history of unethical behavior or individuals accused of wrongdoing
• Transparency in fundraising and spending can help campaigns demonstrate their commitment to ethical practices
  • Campaigns should go beyond legal requirements and proactively disclose additional information about their finances
• Campaigns should respect the privacy of their donors while still complying with disclosure requirements
• Candidates and staff should avoid personal enrichment or conflicts of interest related to campaign funds
• Campaigns should prioritize grassroots fundraising and small-dollar donations to reduce the influence of wealthy special interests
• Ethical considerations should extend to how campaigns spend their funds, avoiding wasteful or frivolous expenses

Case Studies and Real-World Examples

• The Obama campaign's groundbreaking use of digital fundraising and grassroots organizing in 2008 and 2012 demonstrated the power of small-dollar donations and online engagement
• The Sanders campaign's reliance on small-dollar donations and rejection of corporate PAC money in 2016 and 2020 challenged traditional fundraising models and galvanized progressive supporters
• The Trump campaign's use of joint fundraising committees and high-dollar fundraising events in 2016 and 2020 pushed the boundaries of campaign finance law and raised concerns about undue influence
• The rise of super PACs and dark money groups after the Citizens United decision has led to an influx of outside spending in elections, often with limited transparency
• The Clinton campaign's fundraising practices in 2016, including paid speeches and the Clinton Foundation, faced scrutiny and allegations of impropriety
• The Mayday PAC, founded by Harvard Law professor Lawrence Lessig, aimed to elect pro-campaign finance reform candidates in 2014 but ultimately fell short of its goals
• The Bloomberg campaign's self-funding strategy in 2020 raised questions about the role of wealth in elections and the viability of a self-funded campaign
• The Lincoln Project, an anti-Trump PAC founded by former Republican strategists, demonstrated the power of viral advertising and the potential for intraparty opposition in the digital age