Soft vs hard money
Definition
Hard money is regulated, limited campaign cash raised under federal contribution limits and given directly to candidates. Soft money was unlimited, unregulated money given to political parties, nominally for "party building," that could flow into federal races before the 2002 Bipartisan Campaign Reform Act (BCRA, or McCain-Feingold) banned it.
Why it matters
Soft money let corporations, unions, and wealthy donors give unlimited sums to national parties, which then funneled the money into federal races through joint ads and voter drives, circumventing the contribution limits Congress had set for candidates. BCRA closed that channel, but Citizens United (2010) later opened a new one through independent-spending super PACs and nonprofits.
Seen in the wild
Before BCRA, national parties raised hundreds of millions in soft money each cycle from corporate and union treasuries. The 2002 law banned national parties from raising or spending it, a restriction upheld by the Supreme Court in McConnell v. FEC (2003), though outside-group spending has since replaced much of what soft money once funded.1