After a political campaign is over, the volunteers leave, the printers are turned off, and the buttons are put away, where does the money go?
Candidates and Political Action Committees – super PACs – established in their name collect millions in contributions. According to the Center for Responsive Politics, candidates in the 2020 presidential cycle drew $3.97 billion in donations. President Donald Trump raised $773 million for his re-election campaign, with another $311 million in support coming from outside sources. President-elect Joe Biden's campaign raised $1 billion, and $578 million was contributed to outside groups supporting him in the race.
Candidate Campaign Committees
These are the official committees run by the candidate and their campaign team. The Federal Election Commission has put into place rules that control how money is spent after a candidate bows out or the election process ends.
No Personal Use
After all debts are settled, a candidate is not allowed to use the remaining funds for personal uses, which are defined as “a commitment, obligation or expense of any person that would exist irrespective of the candidate’s campaign or responsibilities as a federal officeholder.” In other words, if the expense exists independent of the campaign or being an elected federal official, campaign funds may not be used. Expenses that are automatically considered personal use include household items, mortgage or rent for a personal residence and salary payments to the candidate's family, unless the family member provides a bona fide service to the campaign and the payment reflects the value for the service in the free market.
The contributions can be used in the following ways:
- Donations to charities, as long as the candidate does not receive any compensation from the organizations before it is spent and the donation is not used by the charity to benefit the candidate.
- A donation of a maximum of $2,000 to another federal candidate, and donations to state or local candidates (subject to state law).
- Gift/donations of nominal value on special occasions to anyone besides the candidate's family
- Unlimited transfers to a local, state, or national political party committee.
- Transfer to a future election campaign committee of the same candidate. For example, Bernie Sanders transferred $12.7 million from previous campaigns to his 2020 presidential committee.
- Create a Leadership PAC to back other candidates and a political agenda. Critics say these can be used as "slush funds" since there are fewer restrictions.
General Election Refunds
The Federal Election Campaign Act limits contributions to $2,800 per election. However, the primary election and general election count as two separate elections, thus it is possible to contribute $5,600 to a presidential candidate. But if your candidate drops out of the race before the general election or loses the primary race, $2,800 of your donation must be refunded to you within 60 days. Alternatively, the candidate can redesignate or redistribute their general election funds with the contributor's permission.
Contributions, ideally, should not be lying around. They should be spent as quickly as they come in to maximize the chances of the candidate. However, a super PAC can have money left if those at the helm were reluctant or inept. “Where you see a lot of money left over in the super PAC after the candidate drops out, that will probably tell you something about how seriously the super PAC took the race, to begin with,” Robert Kelner, chair of the Election and Political Law Practice Group at the law firm Covington & Burling, told The New York Times.
Super PACs cannot coordinate with a federal candidate or donate to a national political party committee. They can, however, continue to use the money to support the same candidate in other elections or another federal candidate in future elections. Also, the treasurer of the super PAC is not legally obligated to refund any of the money to donors but often do. In 2016, the Jeb Bush super PAC Right to Rise said it would refund $12 million to donors.