# Political Action Committee (PAC): Definition, Types, Super PACs

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## What Is a Political Action Committee (PAC)?

In the U.S., a political action committee (PAC) is a political committee that pools campaign contributions from members and donates those funds to campaigns for or against candidates, ballot initiatives, or legislation. PACs are typically formed to represent business, labor, or ideological [interests](https://www.investopedia.com/investing/which-industry-spends-most-lobbying-antm-so/) by individuals who wish to privately raise money to donate to a political campaign. The first PAC was formed in 1944 in order to raise money for the re-election of then-President Franklin D. Roosevelt.

### Key Takeaways

*   Political action committees, or PACs, are entities that pool campaign contributions from members and donate them political campaigns.
*   There are many different forms of PACs, each with specific rules about how they can fundraise and what they must disclose.
*   One notable example of a PAC is a Super PAC, which can receive unlimited contributions from individuals, corporations, and other PACs.

## How a Political Action Committee Works

At the federal level, an organization is considered a PAC when it receives or spends more than $1,000 to influence a federal [election](https://www.investopedia.com/terms/p/presidentialelectioncycle.asp).

There are many restrictions that guide how PACs can fundraise and donate their contributions to political [campaigns](https://www.investopedia.com/financial-edge/1012/where-presidential-candidates-get-campaign-funding.aspx) or causes. PACs can contribute $5,000 to a candidate committee per election, up to $15,000 annually to any national party committee, and up to $5,000 annually to any other PAC. PACs may receive up to $5,000 from any individual, PAC, or party committee per calendar year.

A PAC must register with the U.S. Federal Election Committee within 10 days of its formation and provide the name and address for the PAC, its treasurer, and any affiliated organizations. For contribution limits, all affiliated PACs are treated as one donor.

PACs must also disclose information about all individuals who contribute to them. However, these names are sometimes not disclosed until after an election, meaning their contributors may not be transparent to the public while votes are still being cast.

## Types of Political Action Committees (PACs)

There are many categories of PACs, including separate segregated funds (SSFs), nonconnected committees, Super PACs, and Leadership PACs.

### Separate Segregated Funds (SSFs)

Corporations, [labor unions](https://www.investopedia.com/terms/l/labor-union.asp), membership organizations, or trade associations can establish separate segregated funds (SSFs). Once established, these committees can only receive contributions from individuals that are associated with that connected or sponsoring organization.

### Nonconnected Committees

Unlike SSFs, nonconnected committees are not sponsored by a specific entity or organization. As a result, they can accept contributions from the general public.

### Super PACs

Super PACs can receive unlimited contributions from individuals, [corporations](https://www.investopedia.com/terms/c/corporation.asp), labor unions, and other PACs.

### Hybrid PACs

A hybrid PAC can act as both a PAC and a Super PAC. Hybrid PACs must maintain segregated bank accounts for their unlimited Super PAC activities and their normal PAC fundraising and contributions, subject to the same statutory limitations as a regular PAC.

### Leadership PACs

A leadership PAC is a PAC that is established by a candidate or an individual holding federal office. It is common for members of Congress and other political leaders to establish leadership PACs in order to support candidates for various elected offices. Leadership PACs can only contribute up to $5,000 per election to a federal candidate committee.

## PACs vs. Super PACs

Super PACs were created in 2010 after the U.S. Court of Appeals' decision in _SpeechNow.org v. Federal Election Committee_. This decision allowed for a greater level of deregulation as to how political funds are raised and distributed. While Super PAC funds cannot be donated directly to a campaign, managers and political candidates can collaborate and discuss strategy.

Since their inception, super PACs have quickly grown to be a hugely influential force in American politics. In fact, it is estimated that during the 2012 Republican primaries, Super PACs spent more money than individual candidates' campaigns did. The majority of this money was donated by individuals rather than businesses.

## Special Considerations

Corporations cannot contribute directly to a campaign; however, the 2010 Supreme Court decision in _Citizens United v. Federal Election Committee_ made it legal for corporations to support a PAC. The decision overruled the 2002 Campaign Reform Act, which prevented corporations, unions, and other entities from donating money to political campaigns. 

The new laws allow these entities to contribute a limited amount of money to a PAC, which can, in turn, be donated to a campaign. In the case of Super PACs, a corporation can contribute an unlimited amount of [money](https://www.investopedia.com/ask/answers/08/hard-money-soft-money.asp). Even though this money can't be directly given to a campaign, it can be spent to indirectly influence an election.

## What Is an Example of a PAC?

There are plenty of examples of PACs in various sizes. One of the biggest PACs in terms of contributions to candidates is the National Association of Realtors PAC, which was formed by the National Association of Realtors to promote the interests of its industry.

## Who Can Start a PAC?

Individuals and groups can set up nonconnected committees, which may accept contributions from the general public. Corporations, labor unions, and trade associations can establish separate segregated funds, which can only accept contributions from their members.

## What Are Advantages of Super PACs?

Unlike traditional PACs, there are no limits to how much a Super PAC can fundraise from contributors, including corporations, individuals, unions, and others. In addition, while Super PACs disclose their contributors, contributors themselves can shield their identities, such as through the use of shell corporations.

## The Bottom Line

PACs are political committees that pool [campaign contributions](https://www.investopedia.com/articles/investing/033116/top-10-corporate-contributors-clinton-campaign.asp) and direct them to campaigns based on their interests. PACs can take on many forms, and there are rules that govern how they can fundraise and what they must disclose. Today, PACs are hugely influential in elections. SuperPACs are especially so, as they are able to fundraise from corporations, individuals, unions, and others without limit.

> **Article Sources**
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> 1.  Federal Election Commission. "[Contribution Limits](https://www.fec.gov/help-candidates-and-committees/candidate-taking-receipts/contribution-limits/),"
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> 2.  Federal Election Commission. "[Political Action Committees (PACs)](https://www.fec.gov/press/resources-journalists/political-action-committees-pacs/)."
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> 3.  Washington Post. "[Super PACs dominate Reublican primary spending](https://www.washingtonpost.com/politics/super-pacs-dominate-republican-primary-spending/2012/01/11/gIQAdcoq3P_story.html)."
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> 4.  OpenSecrets. "[Top PACs.](https://www.opensecrets.org/political-action-committees-pacs/top-pacs/2020)"
>     
> 5.  FEC. "[Registering as a PAC.](https://www.fec.gov/help-candidates-and-committees/registering-pac/)"