In return, the state parties have sent back to the national committee unrestricted funds that can be spent on those contests, keeping a 10 to 15 percent commission for their assistance. Both political parties have previously avoided limitations on the use of soft money by funneling it through their state party affiliates to pay for advertising that indirectly promotes congressional and presidential candidates. In past election cycles, the DNC has orchestrated money swaps from one state party to another, and both parties have conducted limited swaps between their national committees and state affiliates. But the recent money exchanges between Democratic national and state party committees has never been conducted on such a large scale.
Hard money tends to be more valuable to national parties.
It can be used for any purpose, including direct help for congressional and presidential candidates. Unions and corporations are prohibited from giving to federal races. By contrast, soft money can be collected in unlimited sums from any entity, including unions and corporations. But it cannot be spent directly on behalf of candidates for federal office. State parties often find they can make better use of soft money under the separate state rules they must abide by, providing national parties with an outlet for the money they raise.