Campaign Finance Basics

Following the Money

American political campaigns are extraordinarily expensive. The 2020 presidential and congressional elections cost an estimated $14.4 billion — more than double the cost of 2016 and roughly equivalent to the GDP of a small country.

Campaign money comes from several sources: individual donations (subject to limits), political party contributions, candidate self-funding, Political Action Committees (PACs), Super PACs, and various forms of outside spending. Individual donors can give up to $3,300 per candidate per election (as of 2024), but there are many ways to spend far more through other channels.

The Federal Election Commission (FEC) regulates campaign finance, but critics from both sides argue it is ineffective — deliberately underfunded and deadlocked by partisan appointments. The result is a system where the rules on paper look strict, but the actual flow of money is largely unconstrained.

The Rules in One Table

Federal contribution limits for the 2023–2024 cycle (the FEC indexes several of these for inflation):

A primary and a general count as separate elections, so an individual can actually give $3,300 + $3,300 = $6,600 to a single candidate across one cycle. These hard caps trace back to the Federal Election Campaign Act (1971/1974) and were upheld in Buckley v. Valeo (1976). Because the ceilings on direct giving are low, the real money has migrated to Super PACs and outside groups, where — after Citizens United v. FEC (2010) — no ceiling applies at all.

Worked Example: Following One Senate Race

Consider a competitive 2022 Senate race such as Pennsylvania (Fetterman vs. Oz), which drew roughly $375 million in total spending. Trace where the money actually lived:

• Candidate committees raised and spent the disclosed, capped money — individual checks (capped near $2,900 that cycle) plus party transfers.
• Super PACs — for example the Senate Leadership Fund (Republican-aligned) and Senate Majority PAC (Democratic-aligned) — poured in tens of millions of dollars of "independent" advertising.
• 501(c)(4) dark-money groups funded issue ads without ever naming their donors.

The lesson: the candidate's own disclosed budget is often the smallest visible slice. To understand a modern race you must add up four or five parallel money streams, most of which the candidate does not legally control. That is why headline fundraising totals badly understate the true cost of a competitive seat.