Are We Better Off: A Soft Money Glossary

The new soft-money route threads through a tangled mess of non-profit groups named after cryptic portions of the tax code. Here’s a quick primer.

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MoJo 100 | Hard Money 100 | Soft Money 100

527 Groups These nonprofits are set up exclusively to influence the political process and are required to disclose their donations to the Internal Revenue Service. Reformers and Republican Party lawyers have asked the Federal Election Commission to severely restrict the ability of these groups to influence federal elections. A ruling is expected as early as May.

501(c)4 Groups These nonprofits are deemed ideological lobbying organizations under the IRS code. Like 527’s, they can spend a significant portion of their funds on political communications though there may be stricter tax penalties. 501(c )4’s that do not receive contributions from unions or corporations can claim a special status—often called the MCFL exemption— that allows the group to run issue advertising in the weeks immediately before an election, a tactic now banned for many groups under the new law. These groups file annual tax returns that must be made public, but are not required to disclose their donors.

501(c)3 Groups These nonprofits are generally founded for religious, educational or charitable purposes. They are not supposed to directly engage in any political activities, though some semi-political functions, including voter registration activities, are allowed. These groups make their tax return public, but are not required to disclose their donors.

Unions and Trade Organizations Organized under sections 501(c)5 and 501(c)6 of the law, these groups can spend a portion of their funds on direct political action, including issue advertising and voter registration. They are not required to disclose their donors.

Political Action Committees These are committees, often set up by unions and corporations, that can pool smaller, regulated donations from individual members or employees. They are often tied to the types of non-profits listed above, providing the organizations outside vehicles to directly contribute to a candidate or party. All contributions to PACs must be publicly reported to the Federal Election Commission.

Candidates and Parties Political parties and individual candidates can directly receive money from PACs and individuals, money which must be reported to the FEC. Campaign finance reform raised the limits on these donations for any single individual. Every American can now give $2,000 to each candidate for each election (including primaries) and up to $95,000 to candidates and political parties in any two-year election cycle.

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REAL QUICK, REAL URGENT

Minority rule, corruption, disinformation, attacks on those who dare tell the truth: There is a direct line from what's happening in Russia and Ukraine to what's happening here at home. And that's what MoJo's Monika Bauerlein writes about in "Their Fight Is Our Fight" to unpack the information war we find ourselves in and share a few examples to show why the power of independent, reader-supported journalism is such a threat to authoritarians.

Corrupt leaders the world over can (and will) try to shut down the truth, but when the truth has millions of people on its side, you can't keep it down for good. And there's no more powerful or urgent argument for your support of Mother Jones' journalism right now than that. We need to raise about $450,000 to hit our online fundraising budget in these next few months, so please read more from Monika and pitch in if you can.

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