How can an individual contribute political money?

There are many ways that an individual can contribute money to influence the political process.

Contribution to Candidate

An individual may make a direct contribution to a federal candidate. These contributions are limited to $2,500 per election for the 2012 election. Most candidates will have a primary and a general election; therefore an individual can usually contribute up to $5,000 to a federal candidate. If the candidate is participating in a runoff election, an individual can contribute an additional $2,500.

A direct contribution to a candidate will be disclosed to the FEC. When the individual’s total contributions to the candidate for the cycle exceed $200, the individual’s name, address, occupation and employer will be publicly disclosed in the candidate’s next quarterly FEC filing.

Contribution to PAC

An individual may contribute up to $5,000 per calendar year to a PAC. This limit applies to connected PACs and non-connected PACs, including leadership PACs.

A contribution to a PAC will be disclosed to the FEC. When the individual’s total contributions to the PAC for the calendar year exceed $200, the individual’s name, address, occupation and employer will be publicly disclosed in the PAC’s next FEC filing which may be monthly or semiannually.

Contribution to Party

An individual may contribute $30,800 to a party committee’s federal account, such as the DNC/RNC, DCCC/NRCC, and DSCC/NRSC.

A contribution to a party committee will be disclosed to the FEC. When the individual’s total contributions to the party committee for the cycle exceed $200, the individual’s name, address, occupation and employer will be publicly disclosed in the party committee’s next FEC filing which may be monthly or semiannually.

Contribution to a 501(c)(4)

An individual may contribute unlimited amounts to a 501(c)(4). This contribution does not require the individual’s identity to be publically disclosed.

Contribution to a Super PAC (Independent Expenditure Only PAC)

An individual may contribute unlimited amounts to a “Super PAC” or Independent Expenditure Only PAC. The individual’s identity would be disclosed in public filings with the FEC.

Contribution to a Section 527 Organization

An individual may contribute unlimited amounts to a Section 527 organization (commonly referred to as a “527”). The individual’s identity would be disclosed in public filings with the IRS.

Strategy for Contributing as an Individual

An individual considering making political contributions should consider his or her goals and motivation for the contribution.

A direct contribution to a candidate gives the candidate complete control over use of the funds. Often a campaign’s viability is judged by the media and political insiders based on fundraising strength, so these contributions may have a greater impact on the election dollar for dollar.  These contributions are publicly disclosed and limited to $2,500 per election. The contribution limit can “inflate” the value of direct contributions, because a candidate must collect contributions from many sources rather than a few heavy backers.

A direct contribution to a candidate makes most sense for an individual seeking to contribute $5,000 or less per election cycle. The individual must be willing to publicly disclose their name, address, occupation and employer.

A contribution to a PAC allows an individual to show support for an issue, cause, or affiliated organization. An individual may wish to contribute to the PAC of his or her employer or union, or an ideological PAC which supports political positions the individual favors. Some members of Congress have established Leadership PACs which they use to assist other candidates from their party or fund political activity such as travel and staff.

A contribution to a PAC makes sense for individuals seeking to contribute $5,000 or less per year to a general political goal rather than a specific political candidate. The individual must be willing to publicly disclose their identity. The PAC may then use the funds to contribute to candidates or fund independent expenditures to influence elections. A PAC may not coordinate with a political candidate (a Leadership PAC may not spent money on its member’s campaign).

Individuals who want to contribute more than $5,000 to a PAC or candidate should consider Super PACs, 501(c)(4)s, and 527s.

An individual may contribute unlimited amounts to either a Super PAC or a 501(c)(4). A Super PAC requires disclosure of the contributor’s identity, while a 501(c)(4) may disclose but is not required to do so (choosing not to disclose subjects the c4 to tax).

An individual can contribute unlimited amounts to a 527, which must disclose the contributor’s identity. However, 501(c)(4)s have replaced 527s in practice because he Citizen’s United decision allowed corporations (such as a 501(c)(4)) to make independent expenditures.