Political parties and candidates need funding to run their election campaigns to attract the votes of citizens. However, parties and candidates have different sponsors and followers, so significant budget difference is unfair in the election race. For this reason, the Federal Election Commission distinguishes between hard money, which can be used to support and promote candidates directly, and soft money, which is used only for administrative purposes.
Soft and hard money are both contributions of individuals or companies to the development of a political party or candidate, but their main differences are the purpose of their use and the size of donations. A party uses hard money to directly support candidates in federal elections and increase the party’s popularity. For example, such a budget is spent on shooting and displaying political advertising. However, only individuals can donate hard money, and the size of the contribution cannot exceed $ 20,000 (Kolb, 2018). At the same time, companies, associations, and corporations can donate soft money in an unlimited amount. Nevertheless, a party can only use such a budget for administrative purposes, such as renting an office, informing the public about the party’s issues in general, and getting out-the-vote efforts (Kolb, 2018). This distinction is important because it allows all parties to have a relatively equal and limited budget for direct promotion.
However, although the goals for using soft and hard money are defined, the wording leaves a loophole for using soft money for direct campaigning. For example, general information about a party’s issues is easily confused with a candidate’s advertisement. Consequently, budgets for campaigning and administrative procedures can sometimes “mix up”, which causes arguments between parties. Nevertheless, in general, the law provides fair conditions for election race and competition of candidates.
Kolb, R. W. (2018). The Sage encyclopedia of business ethics and society. SAGE.