Any political organization that wishes to be a recognized party must abide by certain rules and regulations in regards to fundraising. First, local party committees can’t accept or distribute any money over and above the legal limits and restrictions of federal law. Any type of donations need to be legal, in order to protect the donor from liability or prosecution by the Federal Election Commission. Additionally, the federal government can freeze the contribution until after the election is over.
State parties, on the other hand, are free to collect and spend money as they see fit. State parties can even use their own funds to do so. However, state parties cannot use any funds from their own funds to directly aid a candidate. Only the candidate can accept personal contributions from a state committee. A state committee does not have to disclose its donors.
Party committees are required to hold a primary and general election. Prior to the primary, a candidate can be considered eligible to run for any office if he/she files the appropriate paperwork. The candidate must file the paperwork before the primary, if it’s run by a county committee.
Once the primary election has occurred and a candidate has qualified for the position, that person must wait until the local election is over. Then the candidate must file the necessary paperwork and financial reports. After all the reporting is complete, the candidate must wait for the election results.
Local party committees do not have to abide by strict fundraising laws. Any funds gathered can be used for political purposes and are not subject to federal contribution limits. This is why many states offer small individual contributions, which are typically tax deductible. It’s a lot harder for federal politicians to raise funds than local candidates. Because local candidates don’t need to abide by federal limits, they can take advantage of federal funds and use it for other campaign expenses, such as mailers, flyers and television commercials.
In the past, small dollar loans were quite common and easy to access. This is no longer true because of the strict requirements surrounding raising small amounts of money for a campaign.
It is important to remember that personal contributions and political spending are entirely separate activities. Federal laws and regulations are in place to protect candidates from being exploited. Federal election laws limit the amount of money that a candidate can raise for his/her own campaign, as well as the amount that a political party can contribute to the candidate’s campaign.
For example, a candidate cannot receive any money from any national party, such as the Democratic or Republican Party, if that national party provides any type of funding. The National Committee on Public Safety prohibits any funds from going directly to a national political party.
Additionally, the local parties are prohibited from using any funds for their own campaigns and must rely upon their own fundraising resources. To help local candidates, local parties must be willing to work with state and federal candidates to find private donors for the local campaigns.