Political Money Glossary

Key terms for understanding money in American politics. From PACs to dark money to the revolving door — know the language of influence.

5

501(c)(3)

A tax-exempt nonprofit organization that is prohibited from participating in political campaigns. Can engage in limited lobbying. Donations are tax-deductible.

501(c)(4)

A tax-exempt 'social welfare' organization that can engage in unlimited lobbying and some political activity without disclosing donors. Often used as dark money vehicles.

527 Organization

A tax-exempt group organized under Section 527 of the IRS code to raise money for political activities. Includes PACs, Super PACs, and party committees.

B

Bundler

A person who collects contributions from multiple donors and presents them together to a campaign. Bundlers are influential fundraisers who can raise hundreds of thousands or millions by leveraging their networks.

C

Campaign Finance

The system of laws, regulations, and practices governing how money is raised and spent in political elections. Overseen by the Federal Election Commission (FEC).

Carried Interest

A share of profits from an investment fund (typically 20%) taxed at capital gains rates rather than higher income tax rates. Private equity and hedge fund managers lobby heavily to preserve this loophole.

Citizens United

The 2010 Supreme Court decision (Citizens United v. FEC) that ruled corporations and unions can spend unlimited amounts on political communications. Led directly to the creation of Super PACs.

Conduit Contribution

A contribution made through an intermediary (like an employer's PAC) that is attributed to the original donor. Used to circumvent individual contribution limits.

Coordinated Expenditure

Spending by a party committee or outside group that is made in coordination with a candidate's campaign. Subject to contribution limits, unlike independent expenditures.

D

Dark Money

Political spending by nonprofit organizations (typically 501(c)(4)s) that are not required to disclose their donors. Estimated at over $1 billion per election cycle.

Donor-Advised Fund (DAF)

A charitable giving vehicle administered by a third party. Donors receive an immediate tax deduction but can direct grants over time — including to politically active nonprofits — while remaining anonymous.

E

Earmark

A provision in legislation that directs specific funds to a particular project, organization, or locale. Often used to reward political supporters or their districts.

Electioneering Communication

A broadcast, cable, or satellite communication that refers to a clearly identified federal candidate within 30 days of a primary or 60 days of a general election.

F

FARA (Foreign Agents Registration Act)

A 1938 law requiring persons acting as agents of foreign principals to disclose their activities and finances. Enforced by the DOJ. Violations can result in criminal prosecution.

FEC (Federal Election Commission)

The independent federal agency that enforces campaign finance law. Comprised of 6 commissioners (3 from each party), often deadlocked on enforcement.

H

Hard Money

Political contributions that are subject to FEC regulation, including contribution limits and disclosure requirements. Contrasted with 'soft money.'

I

Independent Expenditure

Spending on political communications that expressly advocates for or against a candidate but is not coordinated with any campaign. Not subject to contribution limits.

In-Kind Contribution

A non-monetary contribution of goods, services, or anything of value to a political campaign. Must be reported at fair market value.

J

Joint Fundraising Committee

A committee that raises money on behalf of multiple candidates or political committees simultaneously. Allows donors to write a single large check that is split among participants.

L

LDA (Lobbying Disclosure Act)

A 1995 federal law requiring lobbyists to register with Congress and disclose their clients, issues, and spending. Amended by the Honest Leadership and Open Government Act of 2007.

Lobbying

The act of attempting to influence government decisions, typically by paid professionals. In 2024, total federal lobbying spending exceeded $4.5 billion.

M

Mega-Donor

An individual who contributes $1 million or more in a single election cycle. The top 100 mega-donors now account for a majority of all Super PAC funding.

P

PAC (Political Action Committee)

An organization that pools contributions from members and donates to campaigns. Traditional PACs are limited to $5,000 per candidate per election.

Pay-to-Play

The practice of making political contributions in exchange for government contracts, appointments, or favorable regulatory decisions. Illegal in many contexts but difficult to prove.

Q

Quid Pro Quo

Latin for 'something for something.' In political corruption, it refers to an explicit exchange of money or favors for official action. The legal standard for bribery requires proof of an explicit agreement.

R

Revolving Door

The movement of personnel between government roles and private sector jobs (especially lobbying). Former officials leverage their relationships and knowledge for corporate clients.

S

Soft Money

Political money that falls outside FEC regulation. Before the 2002 McCain-Feingold Act, unlimited soft money could flow to political parties. Now refers to money in the 501(c) system.

Straw Donor

A person who makes a political contribution in their own name but is reimbursed by another person. This is a federal crime.

Super PAC

An independent expenditure-only committee that can raise unlimited funds from individuals, corporations, and unions. Cannot contribute directly to or coordinate with campaigns. Created after Citizens United and SpeechNow.org v. FEC (2010).

T

Transparency

The principle that political spending should be publicly disclosed so voters can evaluate potential conflicts of interest. PowerMap exists to make this data accessible.

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