Hard money is a form of political contribution individuals or political action committees donate in support of a specific candidate in a federal election. These federal funds might go to a US senate, congressional, or presidential election candidate and support [campaign messaging](https://www.masterclass.com/articles/what-is-campaign-messaging-deciphering-the-tools-political-campaigns-use-toreach-their-voters) and general campaign costs. The Federal Election Commission has strict regulations about how much individuals can contribute to federal campaigns.
In fundraising for political committees and parties, [soft money](https://www.masterclass.com/articles/soft-money) refers to funds that support political parties. These nonfederal funds, theoretically, are for more general expenditures and common causes, such as increasing voter registration or sustaining local parties. Individuals and political action committees can gift soft money to the Democratic or Republican parties but not as campaign contributions for a particular candidate. 

While soft money cannot go directly toward federal candidates’ campaigns, some gray areas and loopholes in this form of fundraising exist, making it easy for party treasuries to take advantage of the funds.
Hard money and soft money describe political contributions in the United States. The rules of these types of monetary donations differ in key areas: 

- __Allocation__: In political fundraising, hard money is the funds people give directly to specific political campaigns, and soft money describes funds for a political party in a more general sense. For example, a donor might agree with a party’s stance on criminal justice reform, so they will indirectly donate soft money to support more of those party efforts.
- __Donors__: Political action committees or individual donors can contribute hard money to a political party. Corporations, individuals, and committees can contribute soft money.
- __Limits__: Campaign finance laws limit how much hard money individuals and interest groups can give an individual candidate. Soft money, however, is for national parties, not individuals, and faces fewer regulations regarding the amount of money.
Political contributions have always helped fund campaigns, get-out-the-vote efforts, and political parties.

- __The FEC Act__: In 1974, the Federal Election Campaign Act (FEC Act) put contribution limits on how much hard money (money people give to specific political candidates running for federal office) individuals and political action committees could donate. This regulation led to a drastic increase in soft money donations, which donors allocate to political parties.
- __Bipartisan Campaign Reform Act__: In 2002, the Bipartisan Campaign Reform Act, also known as the McCain-Feingold Act, banned soft money donations. In the years since then, Supreme Court decisions have weakened that bill. 
- __McCutcheon v. Federal Election Commission__: McCutcheon v. FEC, a 2014 case, eliminated aggregate limits for donations. National political parties can court donations from wealthy individuals, further empowering sway over election cycles.
In the real estate industry, the terms “hard money” and “soft money” mean something different than they do in politics. Private hard money lenders provide financial services to borrowers for a down payment on investment properties. Mortgage companies or banks lend long-term soft money loans, which generally have lower interest rates than hard money loans.
Get the [MasterClass Annual Membership](https://www.masterclass.com) for exclusive access to video lessons taught by the world’s best, including Paul Krugman, Doris Kearns Goodwin, Ron Finley, Jane Goodall, and more.
In politics, hard money is a no-strings-attached donation given to specific political candidates running for public office. Donors do not expect repayment, and candidates get the money whether or not they win the election.

In politics, hard money is a no-strings-attached donation given to specific political candidates running for public office. Donors do not expect repayment, and candidates get the money whether or not they win the election.

Hard Money vs. Soft Money: Political Campaign Funding Rules

Hard money is a form of political contribution individuals or political action committees donate in support of a specific candidate in a federal election. These federal funds might go to a US senate, congressional, or presidential election candidate and support <a href='https://www.masterclass.com/articles/what-is-campaign-messaging-deciphering-the-tools-political-campaigns-use-toreach-their-voters' target='_blank' class='mc-text--link' data-mc-segment-trigger='true' data-mc-segment-event-type='Article Page Click' data-event-obj='{"textTag":"p","href":"https://www.masterclass.com/articles/what-is-campaign-messaging-deciphering-the-tools-political-campaigns-use-toreach-their-voters","linkCopy":"campaign messaging","category":null}'>campaign messaging</a> and general campaign costs. The Federal Election Commission has strict regulations about how much individuals can contribute to federal campaigns.

What Is Hard Money in Politics?

In fundraising for political committees and parties, <a href='https://www.masterclass.com/articles/soft-money' target='_blank' class='mc-text--link' data-mc-segment-trigger='true' data-mc-segment-event-type='Article Page Click' data-event-obj='{"textTag":"p","href":"https://www.masterclass.com/articles/soft-money","linkCopy":"soft money","category":null}'>soft money</a> refers to funds that support political parties. These nonfederal funds, theoretically, are for more general expenditures and common causes, such as increasing voter registration or sustaining local parties. Individuals and political action committees can gift soft money to the Democratic or Republican parties but not as campaign contributions for a particular candidate. While soft money cannot go directly toward federal candidates’ campaigns, some gray areas and loopholes in this form of fundraising exist, making it easy for party treasuries to take advantage of the funds.

What Is Soft Money in Politics?

Hard money and soft money describe political contributions in the United States. The rules of these types of monetary donations differ in key areas: <ul class="mc-m-4 list-styled"><li class="">Allocation: In political fundraising, hard money is the funds people give directly to specific political campaigns, and soft money describes funds for a political party in a more general sense. For example, a donor might agree with a party’s stance on criminal justice reform, so they will indirectly donate soft money to support more of those party efforts. </li><li class="">Donors: Political action committees or individual donors can contribute hard money to a political party. Corporations, individuals, and committees can contribute soft money. </li><li class="">Limits: Campaign finance laws limit how much hard money individuals and interest groups can give an individual candidate. Soft money, however, is for national parties, not individuals, and faces fewer regulations regarding the amount of money. </li></ul>

Hard Money vs. Soft Money in Politics

Political contributions have always helped fund campaigns, get-out-the-vote efforts, and political parties.<ul class="mc-m-4 list-styled"><li class="">The FEC Act: In 1974, the Federal Election Campaign Act (FEC Act) put contribution limits on how much hard money (money people give to specific political candidates running for federal office) individuals and political action committees could donate. This regulation led to a drastic increase in soft money donations, which donors allocate to political parties. </li><li class="">Bipartisan Campaign Reform Act: In 2002, the Bipartisan Campaign Reform Act, also known as the McCain-Feingold Act, banned soft money donations. In the years since then, Supreme Court decisions have weakened that bill. </li><li class="">McCutcheon v. Federal Election Commission: McCutcheon v. FEC, a 2014 case, eliminated aggregate limits for donations. National political parties can court donations from wealthy individuals, further empowering sway over election cycles. </li></ul>

The History of Hard Money and Soft Money Contributions

In the real estate industry, the terms “hard money” and “soft money” mean something different than they do in politics. Private hard money lenders provide financial services to borrowers for a down payment on investment properties. Mortgage companies or banks lend long-term soft money loans, which generally have lower interest rates than hard money loans.

Hard Money vs. Soft Money in Real Estate

Get the <a href='https://www.masterclass.com' target='_blank' class='mc-text--link' data-mc-segment-trigger='true' data-mc-segment-event-type='Article Page Click' data-event-obj='{"textTag":"p","href":"https://www.masterclass.com","linkCopy":"MasterClass Annual Membership","category":null}'>MasterClass Annual Membership</a> for exclusive access to video lessons taught by the world’s best, including Paul Krugman, Doris Kearns Goodwin, Ron Finley, Jane Goodall, and more.

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In politics, hard money is a no-strings-attached donation given to specific political candidates running for public office. Donors do not expect repayment, and candidates get the money whether or not they win the election.

In politics, hard money is a no-strings-attached donation given to specific political candidates running for public office. Donors do not expect repayment, and candidates get the money whether or not they win the election.


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Hard Money vs. Soft Money: Political Campaign Funding Rules