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Presidential candidates fundraise their campaigns through a variety of sources, including small, large, and organizational donors. Many also rely on the indirect support of political action committees (PACs).
Running for president of the United States is an expensive proposition. In the 2012 presidential campaign, incumbent Barack Obama and challenger Mitt Romney spent over $1 billion each, in what was the most expensive presidential election ever at the time. In 2016, the overall cost of the White House race totaled under $2.4 billion that year (versus 2012’s total spending of $2.6 billion). However, the 2020 election blew all previous spending records out of the water. In total, the election cost an unprecedented $14 billion.
American citizens of every political persuasion may justifiably wonder where all that money comes from and how it’s spent. Let’s have a look.
Key Takeaways
- Presidential campaigns are expensive undertakings.
- One major source of funding for candidates is the super PAC, a political action committee that can spend unlimited amounts of anonymously donated funds for their favored candidate.
- Candidates can also directly raise funds from donors large and small.
- Almost half of the raised money goes to media advertising; the second largest cost is campaign administrative costs.
Super PACs
A major source of campaign financing is the independent expenditure-only committees, more commonly known as super PACs.
The Supreme Court ruling in the 2010 case of Citizens United v. Federal Election Commission allowed these organizations to spend unlimited amounts of money on their preferred candidate. They are not required to fully disclose the names of their contributors, and they are prohibited by the law from coordinating their political activities with their candidate of choice. The money spent by super PACs is part of a presidential campaign, although it technically does not represent money spent by the candidate.
According to Open Secrets, as of October 2024, around 2,400 groups organized as super PACs have reported total receipts of $3.5 billion and total independent expenditures of $2.05 billion in the 2024 election cycle.
Fundraising
Money can also come from large donors, small donors, and organizational donations.
During the 2016 election, Democratic front-runner Hillary Clinton raised about $563 million, with a super PAC, Priorities USA Action, raising over $192 million of that amount. According to Open Secrets, approximately 53% of Clinton’s raised campaign funds were large individual contributions. Bernie Sanders, who refused the support of super PACs, raised close to $230 million, and 58% of it had come from small individual contributions.
On the other end of the political spectrum, Republican Ted Cruz raised $89.5 million himself and over $53 million was donated to super PACs that supported him. During the 2016 election, Donald Trump was largely self-funded, with 77% of his campaign funds coming from loans he had taken out; the super PACs in his favor raised a relatively paltry $71 million.
During the 2016 presidential campaign, Trump is said to have received free media attention valued at about $5 billion.
Trump began raising money for his 2020 campaign shortly after he was elected. While some experts predicted that it would be impossible for any candidate to out-raise him, Joe Biden’s campaign beat fundraising records and ended up surpassing the Trump campaign’s fundraising haul during the final months of the election cycle.
In 2020, Biden raised approximately $1.04 billion in candidate committee money and $580 million in outside money in getting elected, while Trump raised approximately $774 million in candidate committee money and $314 million in outside money in defeat.
How Money Is Spent
According to OpenSecrets.org, a release of data by the FEC showed that in 2020, 56.1% (or $855.1 trillion) of all donations were spent on media advertisements, with fundraising for donations coming in at 10.2%. Campaign expenses such as consulting, events, and surveys make up 8.6%, and 8.1% went toward salaries. Roughly 6.8% of costs went toward miscellaneous expenses, 6.2% went for administrative costs, and nearly 4% for strategy and research.
Can Presidential Candidates Fund Their Own Campaigns?
Yes, presidential candidates are allowed to fund their own campaigns, as Donald Trump did in 2016, with 77% of of his campaign funds coming from loans he had taken out. Candidates who make donations to their own campaigns are not subject to any funding limits. However, the campaign contributions must be reported.Â
Who Is Not Allowed to Contribute Funds to a Political Campaign?
According to the Federal Election Committee, national banks, federally chartered corporations, and labor organizations are not allowed to make contributions directly to political campaigns. However, individuals employed by such groups are allowed to make contributions.
What’s the Maximum an Individual Can Give to a Presidential Campaign?
The most an individual can give to a candidate in a federal election is $3,300. That’s an inflation-adjusted figure that applies to the period of 2023-2024. Under the Federal Election Campaign Act, contribution limits are indexed for inflation every two years. However, there are other ways an individual can financially support a candidate or party, such as giving $5,000 per year to a Political Action Committee (PAC), or $41,300 per year to a National Party Committee.Â
The Bottom Line
To provide the necessary money required to run for president, candidates draw funding from donors large and small and rely on super PACs to join the effort through advertising and other political activities. The bulk of the campaign funds collected are spent on media, including print, broadcast, and Internet advertising. However, having a lot of money is no guarantee of a successful run for the presidency, either in the primary races or after the party candidates have been nominated.Â
Detailed monthly data on campaign spending is filed by both major-party candidates with the FEC. Its comprehensive reports on campaign spending are available online to the public.