How Campaign Finance Works

Campaign Fundraising in Today's Political System

Trump rally
U.S. President Donald J. Trump speaks during a campaign rally at Harrisburg International Airport in Middletown, Pennsylvania on Sept. 26, 2020. Tayfun Coskun/Anadolu Agency via Getty Images

In the United States, fundraising plays a large role in getting a candidate elected to public office. Without large sums of money, a candidate has virtually no chance of achieving his goal. This doesn't mean that the person who raises and spends the most wins every time, but that's typically what happens. In the 2018 general elections, 89 percent of House races and 83 percent of Senate races were won by the candidate who spent the most on his campaign. It's also easier to stay in office than to get into office. Incumbents are generally able to raise more money than their opponents, which often results in elections with no financial opposition. In 2018, 45 percent of the House races were won by candidates whose opponents spent little to no money [source: Center for Responsive Politics].

With these statistics, it's no wonder that so much importance is put on raising money. It's become a necessary evil for politicians and leaves them in somewhat of a quandary. With so much time being spent on fundraising, candidates can shortchange the people's interest they're hoping to represent.


Candidates raise money in a variety of ways. Billboards, lawn signs, direct mailings and leaflets are a good way to get the word out. TV advertising is easily the most expensive way to bring a candidate into the public's eye. Candidates can raise large sums of money in a single night by hosting a sit-down dinner for targeted, wealthy donors for a per-plate fee. Many of these donors hope to get a few words with the candidate to express an interest they hope can be fulfilled. Some of them simply like being seen at premier social events. In 2008, Barack Obama became the first presidential candidate to use social media advertising to raise large sums of money; altogether, 2008 candidates spent $22.3 million on online ads. By the 2016 presidential election, that figure skyrocketed to $1.4 billion [source: American Bar Association].

The public media are another useful tool for the aspiring politician. Candidates often use newspapers and TV news to garner free advertising. Staffers organize protests and rallies, volunteers cold-call and text, and candidates go on whistle stop tours to spread the word that they care about the common man in the small town. Another technique is to ride the coattails of a popular politician by gaining their endorsement. Former president Bill Clinton proved to be a huge asset during his wife Hillary's two bids for the 2008 and 2016 White House. During the 2020 contest, former president Barack Obama and former first lady Michelle Obama both stumped for Joe Biden, Barack Obama's former vice president.

All of these events and advertising methods cost some serious money. Campaigns spend funds just about as fast as they're raised. Aside from the material items like posters, pins, leaflets, billboards and TV airtime, the money is largely spent on funding the fundraising. Plane tickets, hotel rooms, campaign headquarters overhead, staff, event catering, event space and entertainment are just a handful of costs incurred on the campaign trail.