Elections are a time where people tend to get passionate thinking about who will be the next leader. In the United States, this is perhaps especially true during presidential election years. Many people are fervent enough to give money to their favored candidates to help them fund campaign expenses and "get the word out" about their candidacy through ads and/or other methods of visibility. As a result, a lot of money transfers hands during political campaigns as people open their wallets and give money to their preferred contenders for a given political position.

How Much Cash is Collected?

According to a 2008 Wall Street Journal piece, people have contributed more than ever before to political campaigns. [1] As an example of how much money has been collected during a presidential election cycle, we only have to look to the 2012 election season. During that year billions of dollars had been donated to political candidates. According to a late October 2012 New York Times article, President Barack Obama and Republican contender Mitt Romney each raised a whopping $1 billion. [2] The final figures were - Obama: $1.123 billion, Romney: $1.019 billion. [3]

That's a lot of cash. You figure this was for just one political race which turned out to be the  most expensive presidential election ever. That total doesn't even include the millions of dollars spent on the campaigns by the parties and outside groups. [4]

Romney campaign bus
Credit: Leigh Goessl

A Romney campaign bus spotted in Northern Virginia in September 2012, less than two months until the election. During Mitt Romney's 2012 presidential run, his campaign raised just over a whopping $1 billion. President Barack Obama raised even more.

Fast-forward to 2016 and the Center for Responsive Politics reported in the spring this year’s candidates had collectively raised $720 million in donations, with super PACs collecting $446 million. It was also pointed out at the time this was totaled, it was “still early days for campaign money.” (courtesy Investopedia [5]). Chances are there will be a lot more money being gathered in the coming months before November 2016 arrives. The presumptive party nominees, Donald Trump and Hillary Clinton, will be doing a lot of fundraising as they make the final push to become the next resident to reside at 1600 Pennsylvania Avenue NW, Washington, D.C.

Donald Trump and Hillary Clinton 2016
Credit: Accessed via Wikimedia Commons/ Creative Commons Attribution-Share Alike 3.0 Unported license https://commons.wikimedia.org/wiki/File:Donald_Trump_and_Hillary_Clinton_during_United_States_presidential_election_2016.jpg

Donald Trump and Hillary Clinton are currently duking it out for the U.S. presidential seat. There will be a lot of money flowing throughout the election season.  In 2015 Trump said he was funding his own campaign, but now that the U.S. is heading into the final months before the election, he has begun to actively fundraise.  To date, the Clinton campaign has raised far more Trump's campaign has from donations. During the 2012 presidential election season, record-breaking amounts of cash were raised. How much will 2016 see?

What Can Politicians Do With the Leftover Money?

Once upon a time politicians were able to basically do whatever they wanted with unused campaign monies as long as it was a legal use; they could even use it as a personal retirement fund. This is not the case anymore as the rules were changed in the 1970s to restrict what they could do with the cash. These days the Federal Election Commission employs strict rules about the ways federal candidates can use leftover money. Sticking it in a savings account is no longer an option.

So what exactly does happen to any money that is not spent by incumbents or challengers on campaign related activities?

100,000 Woodrow Wilson currency
Credit: Leigh Goessl

During presidential elections in the United States, massive amounts of cash gets raised to support various candidates. Obviously, not every candidate will make the cut, or even if they do, they may have leftover money.  Whichever the case, what happens to the cash?

Politicians have a few options of how to handle the money. The legal options available include:

  • Donating leftover cash to charity
  • Giving it to a national party committee
  • Transferring it to a municipality or state
  • Giving it to a scholarship fund
  • Placing it in a bank account if the candidate considers running for office at a future date
  • Keep the money in an account in case a candidate’s child decides to run for office

According to Commonwealth Magazine, campaign finance law also "dictates that registered candidates may use campaign funds for legal defense purposes, but not for the payment of penalties or fines." [7]

Basically, the number one rule is political candidates cannot keep the money for themselves to add to their own personal wealth. Judith Ingram, a Federal Election Commission spokeswoman, told Capital Eye (courtesy of OpenSecrets.org ):

"The bottom line is no personal use, obviously. In addition, he can donate it to charity, or contribute it to the national party committee. He can contribute up to $2,000 to another candidate's committee, put it into a PAC, convert his campaign committee into a PAC. He could do nothing with it … if he decided to run again he could dip back into it." [8]

According to OpenSecrets.org, politicians do not have to immediately close down their campaign committees, and can actually "keep them running indefinitely." Candidates can use the money to pay any debts amassed during their campaigns or they can keep it for a future run at office.

U.S. Capitol Building
Credit: Leigh Goessl

Front view of the U.S. Capitol.

What About Super PACs?

Keep in mind this does not include Super PACs. Being a relatively new practice, the rules surrounding this method of funding is still evolving. The only current rule is that the money raised cannot go to fund another federal candidate. Often the unused money is returned to the donors, spent to “wrap up” failed campaign expenses or given to a state-level candidate, notes Mental Floss. [9]

For full information on what happens to unused campaign funds, the Federal Election Commission has published guidelines online [PDF] that outline how candidates’ committees can spend unused funds that were collected. [11]