8 rules to help you understand what campaign finance reporting reveals about influence and support – or doesn’t

Understanding campaign finance reporting can be challenging for many people. News stories about money in politics often appear frequently during election seasons, such as the recent report in Ohio about over US$130 million in outside spending in the U.S. Senate race. This money comes from various sources, including nursing home owners, labor unions, and small donors. It can be difficult to comprehend the significance of these contributions and their impact on elections.

Campaign finance has undergone significant changes over the past two decades. In competitive races, spending by outside groups—organizations that are not affiliated with candidates or political parties—has risen from a small portion of total spending in the early 2000s to now exceeding what candidates themselves spend. Super PACs, or "dark money" groups, can quickly raise millions of dollars, putting pressure on candidates to raise more funds to stay competitive.

Here are eight basic rules to help interpret information about money in elections, which apply to federal, state, and local campaigns:

**Rule #1:** Campaign spending has consistently increased over time. Inflation plays a role, but the cost of campaigns has grown faster than inflation. For example, congressional election spending in 2024 was $9.5 billion, up from $8.8 billion in 2020, though inflation-adjusted figures show a nearly doubling of spending from $5.1 billion in 2014 to $9.5 billion in 2024.

**Rule #2:** Smart donors avoid supporting candidates with little chance of winning. Historically, the candidate with the most money typically wins about 90% of the time. However, incumbents—those already in office—often raise substantial funds but win due to their incumbency status rather than fundraising success.

**Rule #3:** The ultimate goal is to raise money without needing it. In highly competitive races, candidates must raise significant funds to compete. For incumbents, this typically means facing tough reelection challenges. In more competitive races, the amount raised becomes less critical as both candidates raise large sums.

**Rule #4:** Donations from the candidate's home state or community are more meaningful. While contributions from interest groups or wealthy individuals in other states can be helpful, they do not guarantee the candidate's electoral success. Contributions from local residents indicate strong support and are more indicative of a candidate's likely victory.

**Rule #5:** Small donations from outside the district can signal a campaign's unique appeal. Candidates who attract many small donors—often $21 or less—may be perceived as more progressive or conservative, or they may possess an appeal that resonates with a broader electorate. These donors, often mobilized through digital communications, tend to be more ideologically extreme.

**Rule #6:** Super PACs can quickly raise and spend money but cannot directly influence candidates. While Super PACs can significantly impact a campaign's financial support, they cannot communicate directly with candidates or contribute to their funds. It's beneficial for candidates to have both strong candidate fundraising and support from Super PACs, but the former is ultimately more influential in the electoral process.