When it comes to political campaign contributions in the United States, the main players always seem to be looking for loopholes. In many cases, they don’t have to look very far. One of the simplest ways to provide more support for a candidate without creating suspicion or breaking any laws is to donate what is called soft money. Unlike so-called hard money, soft money goes to a given political party rather than being donated directly to a specific candidate. It is not intended to be used for any one candidate but strictly for the party as a whole.
The Difference Between Soft Money and Hard Money
In the U.S., money that is donated to a candidate — called hard money — is regulated by federal laws that limit the amount of money that a person can donate to a candidate. Hard money is strictly monitored by the Federal Election Commission. Soft money, on the other hand, is not limited by federal laws. This allows donors to contribute much larger amounts of money to a candidate's party than to the candidate himself or herself.
Purpose of Soft Money
Soft money is supposed to be spent for particular purposes, such as campaign ads endorsing an entire political party. It also can be used for voter registration drives or “get out and vote” campaigns, yard signs, T-shirts and bumper stickers for the party. Soft money also can be used for advertisements that discuss specific political issues or the party’s platform. The idea behind soft money is for early party building and rallying the party's base.
In some cases, soft money might be used for other expenses as well, including administrative costs. These costs might include purchasing office supplies, paying rent and utilities for general campaign offices and many other mundane expenses. This money isn’t being used for anything especially exciting to observers, such as political campaigns against another party's candidates, so the uses of soft money are often overlooked.
Considered a Loophole by Some People
At one time, nearly unlimited amounts of money were allowed to be donated to political parties through the soft money loophole. Although it is said that campaign finance reform legislation no longer leaves this amount unlimited, the soft money loophole still allows wealthy contributors to donate a great deal of money. Many people see this as a way for wealthy contributors to buy influence without being held accountable.
Great Source of Funding for Political Parties
Federal election laws have done little to control the giving or spending of soft money, so political parties tend to utilize it as their chief source of campaign fund raising. Great amounts of money are raised long before any contributions are made exclusively to individual candidates. It also is true that spending soft money to alleviate certain costs still frees up other money for a political party to spend on specific candidates. Distinguishing between soft money and regular campaign contributions can sometimes be a tricky process, which might lead to impropriety or scandal.