Campaign Finance

Campaign finance refers to the methods and governing rules under which candidates and political parties obtain the funds necessary to organize political parties and carry out campaigns for public office. In the United States, for example, campaign finance is largely achieved through private fundraising by both candidates and parties. Public finance of candidates or parties is exceptional, although it does exist in limited circumstances. In contrast, many democracies in other parts of the world rely almost exclusively on public funding of political parties and candidates, and many utilize a combination of public and private funding.

Political parties require funding—more in election years than in others—to create and maintain their organizations, pay staff, recruit candidates and volunteers, and to engage in election campaigns. Over the years political campaigns, especially in Western democracies, have become more and more professionalized. The need for funds has increased to hire services such as pollsters, advertising agencies, production companies, political consultants, and media time, including everything from campaign buttons to yard signs to billboards, posters, radio and television ads, Web sites, and Internet-based advertising and distribution of spots, position papers, and other campaign materials. In addition, engaging accountants and lawyers to aid in compliance with campaign finance regulations is a necessary expense. Campaign finance has assumed constitutional dimensions in countries such as the United States, where the Supreme Court declared in Buckley v. Valeo in 1976 that

In the United States, political parties and candidates either provide their own campaign funds from personal wealth or have them donated by supporters. The principal exception to this is the limited public financing provided by the federal government for candidates for president of the United States. The 1974 Amendments to the Federal Election Campaign Act of 1971 established a system of partial public funding of presidential campaigns and party conventions funded by a voluntary tax check-off system in which taxpayers may designate on their federal income tax returns that $3.00 (originally $1.00) of their tax liability should go to the Presidential Election Campaign Fund. This fund provides funding for the national nominating conventions of qualifying political parties, primarily the Democratic and Republican Parties. In 2004, each major party received $14.924 million for their party convention from public funds. Parties do not receive public funding for the campaign itself or for their general operation.

This fund also provides partial funding for candidates for president. Under the presidential funding scheme, candidates are allowed to choose whether to [Page 78]participate in public funding. Those who do not participate do not receive public funds but are not restricted as to the amounts that may be expended on their campaign. Those who do participate receive partial matching public funds during the primary in proportion to certain eligible private contributions that they receive and full funding during the general election campaign (private contributions may not be accepted) if they win their party's nomination. In 2004, each major party nominee received $74.62 million in public funds for the general election campaign. For the primary, nine candidates (not including Kerry, Bush, and Dean who declined public funding) received a cumulative total of approximately $28 million. The exact 2008 election amounts will not be determined until early 2008, but the major parties'candidates can expect to receive over $82 million for the general election in 2008, assuming they accept public funds.

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