Difference Between Hard Money and Soft Money

Hard Money vs Soft Money
 

Hard money and soft money are two terms that are used to refer to political donations. It is important to clearly understand what is meant by each before any political contributions are made. There are a number of differences between the two, especially when it comes to the rules that apply to these two types of political contributions. The article offers a clear overview of each type of political donation and explains the differences between hard money and soft money.

What is Hard Money?

Hard money is referred to as a political donation that is made directly to the political candidate. Such donations and contributions made to the political candidate can only come from individuals or political action committees, and need to be within the laws, rules and guidelines put forth by the governing body such as the Federal Election Commission (FEC) in the United States. As there are strict rules guiding these donations, direct contributions to a federal candidate are limited to $2500 per election. Federal law also bans corporations from making direct donations to political candidates. If a corporation wishes to make a contribution, it may do so through a political action committee.

What is Soft Money?

Soft money refers to the political donation made to political parties, and can only be utilized for the purpose of promoting a particular political party and not to advocate the vote of a specific candidate. An interesting point to note is that the 1978 administrative ruling mandated that funding rules are only to be applied to funds donated directly to political candidates and not to funds donated to political parties. It means that soft money that is donated for party building is not regulated by the FEC.

Soft money can come from individuals, political action committees and can also come from various corporations. Also, there are no restrictions on the amount of the donation and so any of the above mentioned parties can contribute funds for the purposes of promoting a political party.

Soft Money vs Hard Money

Soft money and hard money both refer to political donations. While hard money is the funds directly donated to a political candidate, soft money refers to funds donated to a party for party building and promotion. Another major difference between the two lies in the 1978 administrative ruling issued by the FEC, which stated that the funding rules that were set forth by law only applied to individual political campaigns and not for promoting political parties. It means that soft money or donations made to the political parties are not regulated by the FEC and donations of any amount can be made. Hard money, on the other hand, is subject to stringent FEC regulations which limit the amount of funds an individual can contribute to one candidate per election. Another main difference between the two is that individual, political action committees and corporations can donate soft money; however, corporations are forbidden by law to make hard money donations. Direct candidate donations can only be made by individuals and political action committees.

What is the difference between Hard and Soft Money?

• Hard money and soft money are two terms that are used to refer to political donations. There are a number of differences between the two, especially when it comes to the rules that apply to these two types of political contributions.

• Hard money is referred to as a political donation that is made directly to the political candidate.

• Soft money is the political donation made to political parties, and can only be utilized for the purpose of promoting a particular political party and not to advocate the vote of a specific candidate.