How Public Funding of Presidential Elections Works

How Does Public Funding Work?

To qualify for public funding, Presidential candidates and party convention committees must first meet various eligibility requirements, such as agreeing to limit campaign spending to a specified amount. Once the Federal Election Commission determines that eligibility requirements have been met, it certifies the amount of public funds to which the candidate or convention committee is entitled. The U.S. Treasury then makes the actual payments from the Presidential Election Campaign Fund. This fund consists of dollars voluntarily checked off by taxpayers on their federal income tax returns. (In 1993, the taxpayer checkoff was increased from $1 to $3. Public Law 103-66) The checkoff neither increases the amount of taxes owed nor decreases any refund due for the tax year in which the checkoff is made.

Primary Matching Funds

Partial public funding is available to Presidential primary candidates in the form of matching payments. The federal government will match up to $250 of an individual's total contributions to an eligible candidate.

Only candidates seeking nomination by a political party to the office of President are eligible to receive primary matching funds. In addition, a candidate must establish eligibility by showing broad-based public support. He or she must raise in excess of $5,000 in each of at least 20 states (i.e., over $100,000). Although an individual may contribute up to $2,300 to a primary candidate, only a maximum of $250 per individual applies toward the $5,000 threshold in each state.

Candidates also must agree to:

• Limit campaign spending for all primary elections to $10 million plus a cost-of-living adjustment (COLA).6 This is called the national spending limit.
• Limit campaign spending in each state to $200,000 plus COLA, or to a specified amount based on the number of voting age individuals in the state (plus COLA), whichever is greater.
• Limit spending from personal funds to $50,000.

The campaign finance law exempts the payment of some expenses from the spending limits. Certain fundraising expenses (up to 20 percent of the expenditure limit) and legal and accounting expenses incurred solely to ensure the campaign's compliance with the law do not count against the expenditure limits.

Once they have established eligibility for matching payments, Presidential candidates may receive public funds to match contributions from individual contributors, up to $250 per individual. The contributions must be in the form of a check or money order. (Purchases of tickets to fundraisers and contributions collected through joint fundraising are matchable contributions, but loans, cash contributions, goods or services, contributions from political committees and contributions which are illegal under the campaign finance law are not matchable.)

Even if they no longer campaign actively in primary elections, candidates may continue to request public funds to pay off campaign debts until late February or early March of the year following an election. (However, to qualify for matching funds, contributions must be deposited in the campaign account by December 31 of the election year.) Eligible candidates may receive public funds equaling up to half of the national spending limit for the primary campaign. Because candidates receive many nonmatchable contributions, such as those from political committees, they generally raise more money than they receive in matching funds.

To see the 2008 Presidential Candidate Matching Fund Submission Dates, click here.

General Election Funding

The Presidential nominee of each major party may become eligible for a public grant of $20 million (plus a cost-of-living adjustment) for campaigning in the general election.7 To be eligible to receive the public funds, the candidate must limit spending to the amount of the grant and may not accept private contributions for the campaign. Private contributions may, however, be accepted for a special account maintained exclusively to pay for legal and accounting expenses associated with complying with the campaign finance law. These legal and accounting expenses are not subject to the expenditure limit.

In addition, candidates may spend up to $50,000 from their own personal funds. Such spending does not count against the expenditure limit.

Minor party candidates and new party candidates may become eligible for partial public funding of their general election campaigns. (A minor party candidate is the nominee of a party whose candidate received between 5 and 25 percent of the total popular vote in the preceding Presidential election. A new party candidate is the nominee of a party that is neither a major party nor a minor party.) The amount of public funding to which a minor party candidate is entitled is based on the ratio of the party's popular vote in the preceding Presidential election to the average popular vote of the two major party candidates in that election. A new party candidate receives partial public funding after the election if he/she receives 5 percent or more of the vote. The entitlement is based on the ratio of the new party candidate's popular vote in the current election to the average popular vote of the two major party candidates in the election.

Although minor and new party candidates may supplement public funds with private contributions and may exempt some fundraising costs from their expenditure limit, they are otherwise subject to the same spending limit and other requirements that apply to major party candidates.

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