Running for office costs money—a lot of money. That's why candidates collect millions of dollars in contributions. And so, too, do the political action committees (PACs) established in their name.
According to the Center for Responsive Politics, candidates in the 2020 presidential cycle drew almost $4 billion in donations. The organization said more than $1 billion was raised by Joe Biden and an additional $580 million came from outside money. Donald Trump raised about $774 million in donations and another $314 million from outside money.1
But once the political campaign is over, the volunteers leave, the printers are turned off, and the buttons are put away, where does all that leftover money go?
- Candidates raise millions and billions for themselves and through political action committees during political campaigns.
- There are rules in place for how money can be used after a campaign ends.
- Permissible uses include charitable donations and donations to other candidates while personal use is prohibited.
- Campaigns may refund money to donors or redistribute it with their permission if they drop out.
- Super PACs may use leftover campaign cash to support the same candidate in other elections.
Candidate Campaign Committees
These are the official committees run by the candidate and their campaign team. The Federal Election Commission has rules in place to control how money is spent after a candidate bows out or after an election is officially over.
Permissible Uses
The contributions can be used in the following ways:
- Donations to charities as long as the candidate does not receive any compensation from the organizations before it is spent and the donation is not used by the charity to benefit the candidate.
- A donation of a maximum of $2,000 to another federal candidate, and donations to state or local candidates—all subject to state law.
- Gift/donations of nominal value on special occasions to anyone besides the candidate's family.
- Unlimited transfers to a local, state, or national political party committee like the Democratic or Republican National Committees.
- Transfer to a future election campaign committee of the same candidate. For example, Bernie Sanders transferred $12.7 million from previous campaigns to his 2020 presidential committee.
- Create a Leadership PAC to back other candidates and a political agenda. Critics say these can be used as slush funds since there are fewer restrictions.234
Personal Use Is a No-No
Candidates are not allowed to use any remaining funds for personal use after all campaign-related debts are settled. Personal use is defined as “a commitment, obligation or expense of any person that would exist irrespective of the candidate’s campaign or responsibilities as a federal officeholder.”5
In other words, campaign funds may not be used for an expense that exists independent of the campaign. Expenses that are automatically considered personal use include:
- Household items
- Mortgage or rent for a personal residence
- Salary payments to the candidate's family unless they provide a bona fide service to the campaign and the payment reflects the value for the service in the free market5
General Election Refunds
The amount of money any individual can donate to a single candidate is capped. The Federal Election Campaign Act limits contributions to $2,900 per election for the 2021-2022 federal election cycle.6
One important point to note is that the primary election and general election count as two separate elections. This means that it is possible for someone to contribute $5,800 to a federal candidate—once during the primary and another time during the presidential campaign.
But if your candidate drops out of the race before the general election or loses the primary race, $2,900 of your donation must be refunded to you within 60 days. Alternatively, the candidate can redesignate or redistribute their general election funds with the contributor's permission.
Super PACs
Ideally, contributions should not be lying around and should be spent as quickly as they come in to maximize the chances of the candidate winning. However, a super PAC can have money left if those at the helm were reluctant or inept.
“Where you see a lot of money left over in the super PAC after the candidate drops out, that will probably tell you something about how seriously the super PAC took the race, to begin with,” according to Robert Kelner, chair of the Election and Political Law Practice Group at the law firm Covington & Burling.8
Super PACs cannot coordinate with a federal candidate or donate to a national political party committee.9 They can, however, continue to use the money to support the same candidate in other elections or another federal candidate in future elections. Although a super PAC's treasurer isn't legally obligated to refund any of the money to donors but often do. In 2016, the Jeb Bush super PAC Right to Rise said it would refund $12 million to donors.10
Can Politicians Keep Campaign Funds?
Politicians cannot keep any campaign funds for themselves. Contributions must be used during the campaign to pay for related expenses. They are not intended for personal use. Any money that is left over after a candidate drops out or once the election is over must be used to pay off debts. Funds can also be used for other purposes. For instance, a candidate may donate an unlimited amount to a federal, state, or local political committee or they may be refunded to donors.
Can Campaign Contributions Be Refunded?
Candidate campaign committees can be refunded to donors after the candidate drops out. This must be done within 60 days. They may also redirect the funds elsewhere with the donor's permission. Some candidates may also choose to refund contributions to donors for moral or ethical reasons, or for legal purposes if a donor has exceeded the maximum allowable contribution.
The Bottom Line
Political campaigns can raise millions and even billions of dollars through personal and business donations. This money can be used to pay for travel, administration, salaries, and any other campaign-related expenses. Candidates must keep diligent records of where the money comes from and how much is spent. But if a campaign ends (for whatever reason), it must find ways to disperse the funds. This includes spreading it out to other candidates, gifts, and refunds to donors. But candidates are prohibited from using these funds for personal use.
Correction - July 6, 2022: A previous version of this article incorrectly specified the amount that Donald Trump raised during his 2020 campaign.