Hard money and soft money are terms that are often used to describe coin money and paper money, respectively. However, these terms are also used to refer to p

olitical contributions in the United States, which can be made directly to a specific candidate (hard money) or indirectly to parties and committees (soft money). The rules governing the two types of contributions differ, and it may be prudent to check these rules in detail before making a contribution. More information on these rules can be found on the Federal Election Commission (FEC) website.

Hard Money
When cash is contributed directly to a political candidate, it is known as a "hard money" contribution. These contributions may only come from an individual or a political action committee, and must follow the strict limits set forth by the FEC. For example, in 2012, the maximum amount that an individual can contribute to a presidential candidate or committee is:

To each candidate or candidate committee per election To national party committee per calendar year To state, district & local party committee per calendar year To any other political committee per calendar year
$2,500 $30,800 $10,000
(combined limit)

Soft Money
When cash is contributed to a political party with no limits attached to the amount that can be received, this is known as a "soft money" contribution. The funds can come from individuals and political action committees as with "hard money", but they can also come from any other source, such as corporations. The law says that this money can only be used for "party-building activities" such as advocating the passage of a law and voter registration, and not for advocating a particular candidate in an election.

Generosity may be its own reward, but some charitable giving also provides personal tax benefits, find out more in Deducting Your Donations.

  1. Do working capital funds expire?

    While working capital funds do not expire, the working capital figure does change over time. This is because it is calculated ... Read Full Answer >>
  2. Does working capital include inventory?

    A company's working capital includes inventory, and increases in inventory make working capital increase. Working capital ... Read Full Answer >>
  3. What is the Social Security administration responsible for?

    The main responsibility of the U.S. Social Security Administration, or SSA, is overseeing the country's Social Security program. ... Read Full Answer >>
  4. Where are the Social Security administration headquarters?

    The U.S. Social Security Administration, or SSA, is headquartered in Woodlawn, Maryland, a suburb just outside of Baltimore. ... Read Full Answer >>
  5. Is the Social Security administration a government corporation?

    The U.S. Social Security Administration (SSA) is a government agency, not a government corporation. President Franklin Roosevelt ... Read Full Answer >>
  6. How does the role of Medicare/Medicaid affect the drugs sector in the U.S.?

    Medicare and Medicaid have enormous influence on the pharmaceutical, or drugs, sector in the United States. For instance, ... Read Full Answer >>
Related Articles
  1. Economics

    Understanding Donald Trump's Stance on China

    Find out why China bothers Donald Trump so much, and why the 2016 Republican presidential candidate argues for a return to protectionist trade policies.
  2. Economics

    Will Putin Ever Leave Office?

    Find out when, or if, Russian President Vladimir Putin will ever relinquish control over the Russian government, and whether it matters.
  3. Markets

    Will Paris Attacks Undo the European Union Dream?

    Last Friday's attacks in Paris are transforming the migrant crisis into an EU security threat, which could undermine the European Union dream.
  4. Budgeting

    How Much Will it Cost to Become President In 2016?

    The 2016 race to the White House will largely be determined by who can spend the most money. Here is a look at how much it will cost to win the presidency.
  5. Economics

    Current Probability of Donald Trump as President

    Predict the current odds of a Donald Trump presidency, and understand the factors that have kept him on top and the looming challenges he faces.
  6. Investing Basics

    Should You Get A Six Sigma Black Belt? Average Salary: 98K

    Interested in the Six Sigma Black Belt but unsure whether you need one? Here's a guide to it and how it differs from other belts.
  7. Investing Basics

    What is Equity?

    Think of equity as ownership in any asset after all debts stemming from that asset are paid.
  8. Economics

    What's a Horizontal Merger?

    A horizontal merger occurs when companies within the same industry merge.
  9. Economics

    Explaining Quality Control

    Businesses use quality control to ensure their products and services meet a certain standard, as well as any industry regulations.
  10. Professionals

    What is Backward Integration?

    What is backward integration, and how can it affect industries?
  1. Sales Tax

    A consumption tax imposed by the government on the sale of goods ...
  2. Crowding Out Effect

    An economic theory stipulating that rises in public sector spending ...
  3. Gross Domestic Product - GDP

    The monetary value of all the finished goods and services produced ...
  4. Liquidity

    The degree to which an asset or security can be quickly bought ...
  5. Operating Cost

    Expenses associated with the maintenance and administration of ...
  6. Substitute

    A product or service that a consumer sees as comparable. If prices ...

You May Also Like

Hot Definitions
  1. Quick Ratio

    The quick ratio is an indicator of a company’s short-term liquidity. The quick ratio measures a company’s ability to meet ...
  2. Black Tuesday

    October 29, 1929, when the DJIA fell 12% - one of the largest one-day drops in stock market history. More than 16 million ...
  3. Black Monday

    October 19, 1987, when the Dow Jones Industrial Average (DJIA) lost almost 22% in a single day. That event marked the beginning ...
  4. Monetary Policy

    Monetary policy is the actions of a central bank, currency board or other regulatory committee that determine the size and ...
  5. Indemnity

    Indemnity is compensation for damages or loss. Indemnity in the legal sense may also refer to an exemption from liability ...
  6. Discount Bond

    A bond that is issued for less than its par (or face) value, or a bond currently trading for less than its par value in the ...
Trading Center