Candidates, Groups, and the Campaign Finance Environment: A Brief Overview
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Updated March 3, 2016
Candidates, Groups, and the Campaign Finance Environment:
A Brief Overview
Once the purview of only political parties and candidates,
campaigns, and which policy options are available to
the campaign environment now features several different
Congress and regulatory agencies.
kinds of entities, ranging from candidate campaigns to
political parties, political action committees, and “outside”
Contributions to Candidates
groups. Some organizations’ activities are controversial
Party committees, candidate committees, and traditional
amid debate over whether groups are primarily influencing
political action committees (PACs) are political
campaigns or engaging in policy advocacy. This CRS “In
committees, regulated primarily by the Federal Election
Focus” highlights the various political entities that
Campaign Act (52 U.S.C. § 30101 et seq.; FECA). Along
influence presidential and congressional elections, and
with contributions from individuals, most financial support
which, in turn, shape the environment for candidates.
for candidates comes from these political committees,
subject to contribution limits. Parties and PACs can also
The Campaign Environment and Campaign
spend independently to support or oppose candidates. In
Finance Policy
addition, parties can make limited coordinated expenditures
in consultation with candidates. Candidate committees,
Historically, political parties and candidates were the major
party committees, and traditional PACs dominated the
actors in campaigns. Party influence waned during the 20th
century as voters and campaigns became more “candidate
campaign finance landscape into the 1990s, and especially
-
centered.” The landscape changed more subs
before Citizens United (2010).
tantially with
the Supreme Court’s 1976 Buckley v. Valeo decision, which
Candidates (usually congressional candidates) can also rely
lifted restrictions on independent expenditures (IEs) calling
on leadership PACs to support colleagues’ campaigns.
for election or defeat of candidates. Buckley marked the
Originally associated with members of the House and
beginning of a distinction between contributions and
Senate leadership, many officeholders now maintain
expenditures that permitted groups other than parties and
leadership PACs. Similarly, congressional and presidential
candidates to influence campaigns. More recently, the 2010
candidates can raise money through joint fundraising
Citizens United ruling invalidated a prohibition on
committees with parties or other candidates. Some believe
corporate and union IEs in federal (and other) elections.
that joint fundraising committees, leadership PACs, or both
New groups, which found new ways to support and oppose
could become more important following the Supreme
candidates, emerged after both decisions.
Court’s 2014 McCutcheon decision, which lifted aggregate
caps on individual contributions.
Understanding the roles that different groups play in
elections depends on two questions. First, are the groups
Independent Spending
regulated primarily by federal election law or federal tax
Some groups that are prohibited from making campaign
law, as shown in Figure 1?
contributions can nonetheless influence elections through
Figure 1. Policy Challenge: Intersecting Areas of Law
IEs. The three entities on the right side of Figure 2 (super
PACs, 501(c)s, and 527s) have been especially prominent
since 2010. Super PACs developed shortly after Citizens
United through a related appellate court ruling in
SpeechNow v. FEC. Super PACs are political committees
subject to FECA’s reporting requirements, but may accept
unlimited contributions. They may not contribute to
campaigns. Super PACs are, therefore, arguably somewhat
similar to two groups discussed below, 501(c) and 527
organizations.
501(c)s and 527s are primarily governed by tax law. They
Source: Congressional Research Service.
can accept unlimited contributions, but may not contribute
to campaigns. 501(c)(4) social welfare groups, 501(c)(5)
Second, can the groups make contributions, expenditures,
unions, and 501(c)(6) trade associations must have a
or both, as shown in Figure 2 below? Most matters of
“primary purpose” devoted to activities other than elections.
recent debate in campaign finance policy concern the
These groups have engaged in campaign-related activities
intersection of campaign finance law and tax law, as
since at least the early 2000s. Citizens United removed
discussed throughout this CRS product. Where various
lingering questions about whether the groups could make
groups and practices fit in election law, tax law, or both,
IEs. All political committees fall under Section 527 for tax
determines what the groups can do, how they might affect
https://crsreports.congress.gov
Candidates, Groups, and the Campaign Finance Environment: A Brief Overview
purposes, but as popularly used, the term “527” refers to
subject to more or less regulation, at least three other
entities that argue they are devoted to elections but are not
factors may be relevant.
political committees. They were especially active during
the 2004 presidential campaign (most notably Swift Boat
Coordination—FEC “coordination” regulations are
Veterans for Truth and America Coming Together). 527s
designed to ensure that goods or services are not
faded in federal elections thereafter, perhaps due to FEC
provided to campaigns in excess of FECA limits. In
enforcement actions.
practice, establishing that prohibited coordination
occurred is difficult. Existing regulations require
Figure 2. Major Political Entities in the Campaign
satisfying a complex three-part test examining conduct,
Finance Environment
communications, and payment. Relatedly, some have
suggested that Bipartisan Campaign Reform Act
(BCRA; P.L. 107-155) provisions preclude some
candidate fundraising for 501(c) and 527 activities
affecting elections.
Disclosure—Political committees must publicly report
their donors to the FEC, as must 527s to the IRS. 501(c)
groups’ donors are not publicly reported, and the
original sources of some contributions for IEs can avoid
disclosure. Reporting requirements can affect donors’
willingness to contribute to various groups.
Exploratory Committees—FEC regulations permit
potential candidates to “test the waters” by raising and
spending limited funds while considering campaigns.
Debate continues about whether some potential
candidates’ activities cross the line from testing to
candidacy.
Most recent debate in campaign finance policy
concerns the intersection of campaign finance law and
tax law. Where various groups and practices fit ...
determines what the groups can do ... and which
policy options are available.
For additional information, see CRS Report R41542, The
Source: Congressional Research Service.
State of Campaign Finance Policy: Recent Developments
and Issues for Congress, by R. Sam Garrett.
Implications
The distinctions between election law and tax law, and
R. Sam Garrett, Specialist in American National
between contributions and expenditures, determine which
Government
entities can do what in campaigns. If Congress chooses to
IF10277
examine whether the groups discussed here should be
https://crsreports.congress.gov
Candidates, Groups, and the Campaign Finance Environment: A Brief Overview
Disclaimer
This document was prepared by the Congressional Research Service (CRS). CRS serves as nonpartisan shared staff to
congressional committees and Members of Congress. It operates solely at the behest of and under the direction of Congress.
Information in a CRS Report should not be relied upon for purposes other than public understanding of information that has
been provided by CRS to Members of Congress in connection with CRS’s institutional role. CRS Reports, as a work of the
United States Government, are not subject to copyright protection in the United States. Any CRS Report may be
reproduced and distributed in its entirety without permission from CRS. However, as a CRS Report may include
copyrighted images or material from a third party, you may need to obtain the permission of the copyright holder if you
wish to copy or otherwise use copyrighted material.
https://crsreports.congress.gov | IF10277 · VERSION 3 · UPDATED
Updated March 3, 2016
Candidates, Groups, and the Campaign Finance Environment:
A Brief Overview
Once the purview of only political parties and candidates,
campaigns, and which policy options are available to
the campaign environment now features several different
Congress and regulatory agencies.
kinds of entities, ranging from candidate campaigns to
political parties, political action committees, and “outside”
Contributions to Candidates
groups. Some organizations’ activities are controversial
Party committees, candidate committees, and traditional
amid debate over whether groups are primarily influencing
political action committees (PACs) are political
campaigns or engaging in policy advocacy. This CRS “In
committees, regulated primarily by the Federal Election
Focus” highlights the various political entities that
Campaign Act (52 U.S.C. § 30101 et seq.; FECA). Along
influence presidential and congressional elections, and
with contributions from individuals, most financial support
which, in turn, shape the environment for candidates.
for candidates comes from these political committees,
subject to contribution limits. Parties and PACs can also
The Campaign Environment and Campaign
spend independently to support or oppose candidates. In
Finance Policy
addition, parties can make limited coordinated expenditures
in consultation with candidates. Candidate committees,
Historically, political parties and candidates were the major
party committees, and traditional PACs dominated the
actors in campaigns. Party influence waned during the 20th
century as voters and campaigns became more “candidate
campaign finance landscape into the 1990s, and especially
-
centered.” The landscape changed more subs
before Citizens United (2010).
tantially with
the Supreme Court’s 1976 Buckley v. Valeo decision, which
Candidates (usually congressional candidates) can also rely
lifted restrictions on independent expenditures (IEs) calling
on leadership PACs to support colleagues’ campaigns.
for election or defeat of candidates. Buckley marked the
Originally associated with members of the House and
beginning of a distinction between contributions and
Senate leadership, many officeholders now maintain
expenditures that permitted groups other than parties and
leadership PACs. Similarly, congressional and presidential
candidates to influence campaigns. More recently, the 2010
candidates can raise money through joint fundraising
Citizens United ruling invalidated a prohibition on
committees with parties or other candidates. Some believe
corporate and union IEs in federal (and other) elections.
that joint fundraising committees, leadership PACs, or both
New groups, which found new ways to support and oppose
could become more important following the Supreme
candidates, emerged after both decisions.
Court’s 2014 McCutcheon decision, which lifted aggregate
caps on individual contributions.
Understanding the roles that different groups play in
elections depends on two questions. First, are the groups
Independent Spending
regulated primarily by federal election law or federal tax
Some groups that are prohibited from making campaign
law, as shown in Figure 1?
contributions can nonetheless influence elections through
Figure 1. Policy Challenge: Intersecting Areas of Law
IEs. The three entities on the right side of Figure 2 (super
PACs, 501(c)s, and 527s) have been especially prominent
since 2010. Super PACs developed shortly after Citizens
United through a related appellate court ruling in
SpeechNow v. FEC. Super PACs are political committees
subject to FECA’s reporting requirements, but may accept
unlimited contributions. They may not contribute to
campaigns. Super PACs are, therefore, arguably somewhat
similar to two groups discussed below, 501(c) and 527
organizations.
501(c)s and 527s are primarily governed by tax law. They
Source: Congressional Research Service.
can accept unlimited contributions, but may not contribute
to campaigns. 501(c)(4) social welfare groups, 501(c)(5)
Second, can the groups make contributions, expenditures,
unions, and 501(c)(6) trade associations must have a
or both, as shown in Figure 2 below? Most matters of
“primary purpose” devoted to activities other than elections.
recent debate in campaign finance policy concern the
These groups have engaged in campaign-related activities
intersection of campaign finance law and tax law, as
since at least the early 2000s. Citizens United removed
discussed throughout this CRS product. Where various
lingering questions about whether the groups could make
groups and practices fit in election law, tax law, or both,
IEs. All political committees fall under Section 527 for tax
determines what the groups can do, how they might affect
https://crsreports.congress.gov
Candidates, Groups, and the Campaign Finance Environment: A Brief Overview
purposes, but as popularly used, the term “527” refers to
subject to more or less regulation, at least three other
entities that argue they are devoted to elections but are not
factors may be relevant.
political committees. They were especially active during
the 2004 presidential campaign (most notably Swift Boat
Coordination—FEC “coordination” regulations are
Veterans for Truth and America Coming Together). 527s
designed to ensure that goods or services are not
faded in federal elections thereafter, perhaps due to FEC
provided to campaigns in excess of FECA limits. In
enforcement actions.
practice, establishing that prohibited coordination
occurred is difficult. Existing regulations require
Figure 2. Major Political Entities in the Campaign
satisfying a complex three-part test examining conduct,
Finance Environment
communications, and payment. Relatedly, some have
suggested that Bipartisan Campaign Reform Act
(BCRA; P.L. 107-155) provisions preclude some
candidate fundraising for 501(c) and 527 activities
affecting elections.
Disclosure—Political committees must publicly report
their donors to the FEC, as must 527s to the IRS. 501(c)
groups’ donors are not publicly reported, and the
original sources of some contributions for IEs can avoid
disclosure. Reporting requirements can affect donors’
willingness to contribute to various groups.
Exploratory Committees—FEC regulations permit
potential candidates to “test the waters” by raising and
spending limited funds while considering campaigns.
Debate continues about whether some potential
candidates’ activities cross the line from testing to
candidacy.
Most recent debate in campaign finance policy
concerns the intersection of campaign finance law and
tax law. Where various groups and practices fit ...
determines what the groups can do ... and which
policy options are available.
For additional information, see CRS Report R41542, The
Source: Congressional Research Service.
State of Campaign Finance Policy: Recent Developments
and Issues for Congress, by R. Sam Garrett.
Implications
The distinctions between election law and tax law, and
R. Sam Garrett, Specialist in American National
between contributions and expenditures, determine which
Government
entities can do what in campaigns. If Congress chooses to
IF10277
examine whether the groups discussed here should be
https://crsreports.congress.gov
Candidates, Groups, and the Campaign Finance Environment: A Brief Overview
Disclaimer
This document was prepared by the Congressional Research Service (CRS). CRS serves as nonpartisan shared staff to
congressional committees and Members of Congress. It operates solely at the behest of and under the direction of Congress.
Information in a CRS Report should not be relied upon for purposes other than public understanding of information that has
been provided by CRS to Members of Congress in connection with CRS’s institutional role. CRS Reports, as a work of the
United States Government, are not subject to copyright protection in the United States. Any CRS Report may be
reproduced and distributed in its entirety without permission from CRS. However, as a CRS Report may include
copyrighted images or material from a third party, you may need to obtain the permission of the copyright holder if you
wish to copy or otherwise use copyrighted material.
https://crsreports.congress.gov | IF10277 · VERSION 3 · UPDATED