Money in Politics: How It Works and How We Fix It

The role of money in politics is impossible to ignore. It shapes everything from billion-dollar presidential races to grassroots campaigns for local office. It pays for yard signs, staff salaries, social media ads, and campaign events. It even influences who gets elected and who doesn’t.

But how much is too much? And when does necessary campaign funding cross the line into corruption or manipulation?

In this guide, we’ll explore the complex role of money in politics: the good, the bad, and the fixable. Whether you're a concerned citizen, a first-time candidate, or just curious about how politics really work, this article is your starting point.

What Is the Role of Money in Politics?

Money in politics affects:

• Who can afford to run
• How campaigns reach voters
• What happens after the election

While it can amplify new voices, money also has the power to drown them out entirely.

Money Can Empower Campaigns

Not all political spending is harmful. In fact, campaign funding can be a force for good. It helps candidates:

• Get their message out through mailers, digital ads, signs, and speeches.
• Connect with voters using texting platforms, phone banks, canvassing tools, and events.
• Build campaign infrastructure to hire staff, rent office space, and launch outreach efforts.

Small-dollar donations, in particular, can be powerful. A $10 contribution might seem small, but hundreds or thousands of grassroots donors can fuel real momentum.

LEARN MORE: Explore how political donations work.

Money Can Distort Democracy

At the same time, the system often rewards candidates with access to wealth.

Today, many campaigns depend on wealthy donors, personal or family wealth, Super PACs and outside spending, and political party networks.

Recent 2026 primaries highlight how extreme this has become:

• Texas Senate primaries broke spending records in March.
• Kentucky’s GOP Senate primary saw more than $48 million spent, much of it backed by billionaires and dark money.
• Illinois’ Senate primary included $10 million in spending from Governor JB Pritzker to influence the race.

This dynamic isn’t just at the federal or state levels. It’s reshaping local politics too. In Scottsdale, Arizona, city council candidates raised and spent tens of thousands of dollars in a single quarter. These rates of fundraising are becoming increasingly common, even for smaller races.

For many, these costs are a real barrier to entry.

Alexandra Jackson, a city councilmember in Aurora, Colorado, said, "I was told when I first jumped in the race, I needed $100,000 or I should drop out. If I can't raise $100,000, I need to just call it quits right now."

This funding imbalance leaves only the powerful and wealthy with the means to run for office. It can also affect the way politicians lead. Some big donors may expect policy influence, leading to decisions that benefit a few instead of the many.

LEARN MORE: See how big money corrupts local elections and is reshaping communities across the country.

Why Money in Politics Matters

At its core, money in politics shapes who participates, who wins, and whether voters trust the system at all. It controls:

• Access: Who gets to run for office, and who gets discouraged before they start.
• Influence: Whose voices are amplified during a campaign.
• Outcomes: Who wins elections, especially in closely contested races.
• Trust: Whether voters believe the system is fair.

"Democracy, from what I've been told and taught, is for everybody, so money shouldn't be a factor,” Jackson said.

When money becomes the deciding factor, it undermines that ideal.

Understanding the Types of Political Money

Money enters the political system through many different channels, each with its own rules, loopholes, and implications:

• Hard money is tightly regulated and refers to contributions made directly to a candidate’s campaign. These donations are subject to strict limits and transparency requirements (see your state’s regulations on campaign finance).
• Soft money, by contrast, can be given to political parties for “party-building” activities, but it’s often used to indirectly support campaigns, sidestepping the limits placed on candidates themselves.
• Self-funding is an option for some candidates who have a high level of personal wealth.
• Dark money is funds funneled through nonprofits that don’t have to disclose their donors. Though these organizations claim to focus on issues rather than candidates, they often flood the airwaves with ads timed to influence key elections (learn more about how dark money impacts democracy).
• Super PAC spending is money from independent groups that can legally raise and spend without any limits. While Super PACs can’t coordinate directly with campaigns, their spending often dominates elections. Outside spending by independent groups, including Super PACs, has exploded since the Citizens United decision in 2010.

Each of these types of political money plays a role in who gets elected and who has to fight harder just to be heard.

LEARN MORE: Check out a full explanation of the differences between hard money vs. soft money.

How Money Is Spent in Politics

Campaign money doesn’t just go toward ads. It powers nearly every part of a campaign, including:

• Voter Outreach: Digital ads on social media, search, or streaming, TV and radio ads, and mailers and printed materials
• Field Operations: Door-to-door canvassing, phone banking, texting programs, and volunteer coordination
• Campaign Infrastructure: Staff salaries, office space, and technology and data tools
• Strategy and Consulting: Polling, messaging, media strategy, communications, and campaign consultants
• Compliance and Legal: Filing paperwork and any legal guidance needed to follow election laws

This is why even relatively small local races can require significant funding to stay competitive.

Beyond campaign activities, money in politics also shapes legislation, access, and influence. Big spenders like corporations and lobbying groups can tip the scales long after the polls close.

How Much Money Is Spent on U.S. Elections?

The amount of money flowing into U.S. elections continues to break records. The 2024 federal election cycle reached a staggering $15.9 billion.

The 2024 presidential race saw some of the highest numbers, with Kamala Harris’s campaign alone topping $1 billion. Donald Trump’s campaign and outside groups supporting him added nearly another $1.5 billion.

More than $10 billion was spent on Senate and House races at the congressional level. Even judicial elections, once low-budget contests, are no longer exempt from big money.

Even historically low-cost races are changing. For instance, Carol Greenstreet won a school board election in Woodland Park, Colorado – a small community with a population of around 8,000 people.

Greenstreet said, "Two years ago in the election, each candidate raised and spent $25,000 on their campaign, and this is a 1,800-student school district. Isn't that crazy?"

She also noted the impact of outside money:

"The dark money that came in afterward was estimated to be half a million dollars," she said.

These trends show that big money is no longer limited to national politics. It’s everywhere.

This isn’t meant to be discouraging, though. In fact, many down-ballot races can still be won with just a few thousand dollars. In many areas around the United States, school board, city council, and even some state legislative races remain within reach for candidates willing to knock on doors, make direct appeals, and fundraise creatively.

LEARN MORE: See how much it really costs to run for office in 2026.

How Corporations and Lobbyists Use Money to Influence Politics

Campaign spending is only one part of the story.

Corporate money also shapes politics through lobbying. Lobbying is the direct effort to influence laws, regulations, and government decisions. In 2025 alone, lobbying spending reached approximately $5.3 billion, continuing a steady rise in influence across industries.

Corporations, trade associations, and industry groups use this money to:

• Advocate for favorable policies
• Block regulations that could hurt their bottom line
• Gain access to lawmakers and decision-makers

While these corporations can’t donate directly to candidates, they can fund political action committees (PACs) and Super PACs, which then spend millions to support or attack candidate campaigns.

They can also fund lobbying efforts. From fossil fuel companies opposing climate legislation to pharmaceutical giants protecting their pricing power, this spending often shapes policy behind the scenes.

Here are some of the top lobbying spenders of 2025:

• U.S. Chamber of Commerce: Spent over $72 million lobbying on issues like tax policy, business regulation, labor laws, and trade.
• National Association of Realtors: Spent more than $54 million advocating on housing policy, mortgage regulations, property taxes, and zoning laws, all of which directly affect the real estate market.
• Pharmaceutical Research & Manufacturers of America (PhRMA): Spent nearly $40 million lobbying on drug pricing, Medicare and Medicaid policy, and patent protections, shaping how prescription drugs are regulated and priced.
• Business Roundtable: Spent over $33 million influencing corporate governance, economic policy, and regulatory reform, representing the interests of major CEOs and large corporations.
• American Hospital Association: Spent $32 million advocating on healthcare funding, hospital reimbursement rates, and public health policy, especially around Medicare and Medicaid payments.

At the same time, new industries are rapidly increasing their influence. In early 2026, major AI companies scaled up their lobbying efforts. Companies like Anthropic, Meta, and OpenAI are lobbying on issues like AI regulation, data privacy, national security, copyright, and whether AI should be regulated at the state or federal level.

Lobbying doesn’t just happen in Washington. At the state level, spending is also rising, with industries trying to influence decisions on everything from education funding to healthcare access.

Many former lawmakers even go on to become lobbyists themselves, reinforcing a cycle in which influence, access, and money circulate through the same halls of power, sometimes referred to as the revolving door. The result? Legislation that typically reflects corporate priorities more than community needs.

LEARN MORE: Explore how lobbying influences politics.

The Fundraising Challenge for Independent and Local Candidates

Without major-party support or built-in donor networks, independent candidates often face significant fundraising hurdles. Independent and nonpartisan candidates typically fund their campaigns through:

• Small-dollar donations
• Crowdfunding platforms
• Volunteer networks
• In-kind donations and community support

Carol Greenstreet took a deliberate approach to fundraising: “I chose not to know the names of any of the individuals that gave to my campaign. I don't want anything but local individuals giving to my campaign."

This kind of community-first strategy is becoming more common and more effective. Candidates who embrace community engagement instead of big checks can still build viable, competitive campaigns. A series of small donations from friends, neighbors, and first-time givers raises funds and builds momentum and trust.

From neighborhood fundraising events to mobile-friendly donation links and peer-to-peer outreach, the most successful campaigns are now leaning into authentic, grassroots support over glitzy fundraisers. With modern tools and smart planning, many local candidates are proving that you don’t need a massive war chest to win, just a message that resonates.

LEARN MORE: See how to fundraise for your campaign effectively.

How Can We Reduce the Influence of Big Money?

While money will always be part of politics, its outsized influence isn’t inevitable. Real solutions are already being tested across the country and can help restore balance and accountability.

Some ways to start making people matter more than money in politics include:

Transparency and Disclosure

Requiring all political donors and groups to disclose who’s giving what is one of the simplest ways to build trust. Voters should know who’s trying to influence their vote.

Public Financing

Some states and cities now offer matching funds or grants to campaigns that meet grassroots support thresholds. This allows candidates to spend more time connecting with voters and less time fundraising. In places where public financing is available, it’s already helping to level the playing field.

Democracy Vouchers

Seattle’s democracy voucher program gives each voter four $25 vouchers to donate to participating candidates. This idea has turned everyday people into campaign donors and helped elevate candidates who may not have wealthy networks.

Stronger Local Laws

Many cities and states are passing campaign finance reforms that go beyond federal law, like contribution caps, bans on corporate donations, and expanded public funding programs. These local experiments are creating blueprints for change elsewhere.

National Reform Movements

Across the country, activists are building momentum for systemic change, such as pushing for limits on outside spending, ending dark money loopholes, and strengthening election integrity. These reform efforts reflect growing frustration with a system that too often favors money over merit.

The Future of Money in Politics Depends on People, Not PACs

Every time a candidate wins on the strength of their ideas instead of their bank account, every time a voter learns who’s funding their local race, and every time a community rallies around reform, we take a step toward a healthier democracy.

Big money may still dominate headlines, but grassroots campaigns are making headlines of their own. These efforts prove that authenticity, creativity, and the power of real people still matter.

At GoodParty.org, we’re proud to support independent candidates working to change the game from the ground up. Whether you're planning a campaign, considering a run, or simply want to understand how the system works, remember: the fight for fair, people-first politics starts with you.

Photo by Giorgio Trovato on Unsplash