What is Soft Money?
Soft money refers to political contributions that are not regulated by federal election law in the same way as direct donations to candidates (hard money). These contributions are usually made to political parties or organizations for purposes other than directly supporting a specific candidate. Soft money was largely unregulated, allowing corporations, unions, and wealthy individuals to contribute unlimited sums to political parties. These funds were intended for “party-building” activities like voter registration drives, generic advertising, and issue advocacy.
Unlike hard money, soft money wasn’t given directly to candidates and thus was not subjected to the same contribution limits and strict disclosure requirements. This lack of oversight often led to soft money being used in ways that indirectly benefited specific candidates, blurring ethical lines. The BCRA sought to address these issues by prohibiting national parties from raising or spending soft money. However, donations to political action committees (PACs) and super PACs continue to wield significant influence in campaigns through large-scale independent expenditures.
Key Characteristics Include:
- Regulation: Less strict regulation compared to hard money, especially before the Bipartisan Campaign Reform Act (BCRA) of 2002.
- Contribution Limits: Historically, no specific contribution limits applied to soft money donations, allowing corporations, unions, and individuals to give large sums.
- Usage: Funds could be used for “party-building” activities like voter registration drives, issue advocacy, or generic party advertising that indirectly benefits candidates.
- Disclosure: Often subject to less stringent disclosure requirements than hard money contributions.
Difference between Hard Money and Soft Money
Knowing the distinction, between hard money and soft money is essential for individuals on understanding the domains of finance and politics. These terms frequently arise in conversations regarding campaign financing and political donations. Being familiar, with their definitions can assist you in comprehending the policies and guidelines that oversee funding.