Candidates for federal office can raise only hard money—that is, money that complies with federal contribution limits and source prohibitions. No corporate, labor, or foreign national (without a green card) funds are allowed.

For the calendar years 2005-2006, federal candidates can receive contributions of up to $2,100 per primary or general election from any single individual and up to $5,000 from any single PAC. Federal law prohibits candidates from accepting contributions from corporate or labor union general treasury funds. Instead, a corporation or labor union can establish a PAC, raise funds from individuals and contribute those individual funds to a candidate in amounts of up to $5,000 per election. Federal law also prohibits candidates from receiving contributions from government contractors, foreign nationals and national banks.

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A federal candidate—other than a presidential candidate who accepts public funds—may use an unlimited amount of his or her own personal funds to finance his or her own campaign. Presidential candidates who accept public funds must agree to accept spending limits as a condition of eligibility and agree to limit their use of personal funds to no more than $50,000.

When using personal funds for a campaign, a candidate may only use funds that the candidate individually owns and controls or up to one-half of funds owned jointly by a candidate and his or her spouse, if no specific share is indicated on a document of ownership.

A candidate who uses personal funds to finance a campaign, has the option of contributing the money to the campaign (and thus giving up any option for repayment) or loaning the money to the campaign. However, if a candidate loans money to his or her own campaign, the law restricts payment following the election to $250,000.

If a candidate does rely on personal funds to provide full or partial funding for a campaign, this action may serve to increase the amounts others may contribute to his or her opponent. BCRA includes an exception to the contribution limits for candidates who are running against wealthy opponents who use a great deal of their personal wealth to finance their campaigns. In such cases, under a complex formula, a less well-financed candidate for a House seat may accept contributions from individuals in amounts up to $6,000, while a less wealthy candidate for a Senate seat may accept contributions in amounts up to $12,000 (click here for detailed chart on alternate contribution limits triggered by a self-financed candidate). This provision has been successfully utilized by candidates in several well-publicized races in 2004 (see case study on Millionaires' Amendment at work in the 2004 cycle)

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There are no limits on the amount of money a House or Senate campaign may spend, provided that the funds are raised from permissible sources and in permissible amounts. (Candidates for the presidency who accept federal funds are, however, subject to spending limits in exchange for these federal funds.)

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Federal candidates must file periodic reports with the FEC that list each contribution of $200 or more that the campaign received and each disbursement of $200 or more that the campaign made. These reports must be filed by the candidate's committee on a semi-annual basis during non-election years and on a quarterly basis during election years. (See FEC Contribution and Expenditure Disclosure Required of Campaign Committees.)

Additional reports are also required before and after the election. The FEC makes these reports available to the public through several means, including its website.

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Federal candidates cannot receive or spend any non-federal funds—i.e., funds that do not comply with the contribution limits and source prohibitions of federal law. Federal candidates are, however, currently allowed to solicit funds that comply with federal contribution limits and source prohibitions for the non-federal account of a state party. They can also make a general solicitation on behalf of non-profit organizations and charities that do not engage in political activity as their principal purpose if the solicitation does not specify how the funds will or should be used.

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