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There are two types of funds:  [[hard money]] and [[soft money]].  In simple terms, hard money consists of donations to campaigns, while soft money consists of other expenditures that do not "expressly advocate" the election or defeat of a candidate.

There are two types of funds:  [[hard money]] and [[soft money]].  In simple terms, hard money consists of donations to campaigns, while soft money consists of other expenditures that do not "expressly advocate" the election or defeat of a candidate.

Federal law prohibits corporations and unions from donating directly to a candidate for him to spend on his campaign, but most states allow for some types of corporate donations.  Instead, corporations and unions establish [[political action committees]] (PACs) for raising money for the purpose of donating to campaigns.

Federal law prohibits corporations and unions from donating directly to a candidate for him to spend on his campaign, but most states allow for some types of corporate donations.  Small corporations that satisfy the "MCFL" exception  Instead, corporations and unions establish [[political action committees]] (PACs) for raising money for the purpose of donating to campaigns.

Incumbents have an incentive to restrict the ability of challengers to raise money, and also to prevent independent groups to spend money criticizing the incumbents.  Repeatedly legislators have passed limitations on campaign spending, but some of those restrictions have been declared unconstitutional under the [[Free Speech Clause]] of the Constitution.<ref>''Buckley v. Valeo'' (1976).</ref>

Incumbents have an incentive to restrict the ability of challengers to raise money, and also to prevent independent groups to spend money criticizing the incumbents.  Repeatedly legislators have passed limitations on campaign spending, but some of those restrictions have been declared unconstitutional under the [[Free Speech Clause]] of the Constitution.<ref>''Buckley v. Valeo'' (1976).</ref>