Political Action Committees: Understanding the 5 Types of PACs

A political action committee (or PAC) is a tax-exempt organization that raises money and collects political contributions via monetary donations from individuals, unions, and organizations. The primary purpose of a PAC is to encourage the election of a candidate, or the defeat of another candidate. PACs exist to fund political campaigns, ballot initiatives, lobbying, and legislation.

The first PAC was established in 1943 after the US Congress prohibited unions from directly contributing to political parties and candidates. The Federal Election Commission of 1971 instituted the Federal Election Campaign Act, which placed new regulations and limitations on how much PACs can contribute to federal elections.

In 2002, the Bipartisan Campaign Reform Act (BRCA) placed further restrictions on PACs. The Supreme Court Ruling on BCRA barred national political party committees from raising funds without federal limits, and prohibited issue-advocacy ads paid for by corporations that named a candidate prior to an election.

In 2010, the Supreme Court overturned sections of BRCA in Citizens United v. FEC. The court decided it was unconstitutional to limit the amount of funds that unions and corporations can contribute to political messaging.

There are 5 types of political action committees, which include:

1. 1. Separate Segregated Funds (SSFs): SSFs are political committees established by corporations, labor unions, membership organizations, or trade associations. They may only solicit contributions from an individual connected with the sponsoring organization.
2. 2. Nonconnected committees: Nonconnected committees are not established or sponsored by any organization or union, and can target the general public for their fundraising.
3. 3. Super PACs: A Super PAC is a committee that may gather unlimited funds from individuals, corporations, unions, and other PACs to finance campaign independent expenditures. Super PACs are not permitted to spend money on political parties or campaigns but can spend unlimited funds on other political activities—like travel and events.
4. 4. Hybrid PACs: A Hybrid PAC is similar to a Super PAC, insofar that they can spend unlimited funds on political activity outside of a campaign. Hybrid PACs, however, can contribute funds to a political party, candidate, or campaign subject to the limitations of SSFs and nonconnected committees.
5. 5. Leadership PACs: A leadership PAC is a committee established by a candidate or individual holding federal office. Members of Congress, both in the Senate and the House of Representatives, can establish leadership PACs to support federal candidates of their political party.

Political Action Committees exist to support candidates by raising and donating money to their election or reelection campaigns. For SSFs, Nonconnected PACs, and Leadership PACs, there are limitations on how much money can be donated or spent on a particular candidate campaign. Federal law prevents PACs from contributing more than: $5,000 to a candidate or candidate committee for each election cycle; $15,000 to a political party per year; $5,000 to a state or local party committee per year; $5,000 to another PAC per year. Hybrid PACs follow the same contribution restrictions but can spend unlimited amounts of money on non-candidate or campaign-related political activity. Super PACs are permitted to receive unlimited funds on non-candidate or campaign-related political activity, but cannot contribute to individual political campaigns.

PACs can contribute funds directly to political candidates or campaigns, while Super PACs exist to fund non-campaign-related political activity. There are a number of differences between PACs and Super PACs, which include the following:

• Campaign donation size: PACs are permitted to accept donations of up to $5,000 dollars a year from an individual. Super PACs are not subject to any sort of donation cap.
• Campaign contribution size: A PAC may contribute up to $5,000 per election of a candidate, or $15,000 to a party committee per year. Super PACs are not subject to those restrictions.
• Donors: PACs are not permitted to accept donations from corporate or union interests, while Super PACs are allowed to receive unlimited contributions from those same sources.

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