Such purposes include all political contests for voting by citizens, especially the election campaigns for various public offices that are run by parties and candidates.
[4] Political revenue may be collected from small donors or individual citizens ("grassroots fundraising"), who make small contributions or pay party membership dues; wealthy individuals; organizations including businesses, interest groups, professional organizations and trade unions; assessments of officeholders (called the "party tax"); government subsidies; or generally illegal activities including graft, buying access to politicians, offices, honors or titles, extortion of wealthy people and influence peddling).
[5] As the relevance of signed-up party members and their dues [6] can vary among the democracies the terms grassroots fundraising, plutocratic finance and public funding may offer a more adequate general framework.
Political fundraisers should try "to exploit the latent giving power in the general population" and make every reasonable effort to raise "significant sums ... collected in small change.
A variety of ways are available (nationwide lotteries, direct mail drives, peer, neighborhood or internet solitication, social events at the local level, even yard sales) for grassroots fundraising.
After World War II, politicians including Luis Muñoz Marín in Puerto Rico, Gerhard Stoltenberg in Germany, Jean Lesage in Quebec and Tage Erlander in Sweden found a way to put "the costs of democracy" [11] directly upon the taxpayer.
[12] Most modern democracies (in one way or the other) provide government subsidies for party activity, typically in cash and/or free access to public or private media.
Public subsidies can be relatively small (as in the UK and USA) or quite generous (as in Sweden, Germany, Israel and Japan), and usually exist side-by-side with private fundraising.
[14] Because matching funds and tax credits depend on financial contributions by individual citizens such support is more compatible with participatory democracy than flat grants that do not require specific efforts by the fundraising organizations.
Taxpayers in continental Europe and non-western democracies (like Israel and Japan) provide higher amounts towards party activity than their Anglo-Saxon counterparts.
Also, Democrats in the U.S. typically inveigh against the financial advantages of the so-called "fat cats", while Republicans are wary of the war chests possessed by public and private labor unions, especially the former.
The maximum donation allowed may differ either by type of donor (individual citizens, legal entities), by recipient (candidate or party) or by purpose to be funded (nomination contest, election campaign, routine operation).
Any disclosure regulation has to identify a person or an institution that is responsible for the transparent flow of funds to and from party coffers and the kind of information, which has to be disclosed timely and accessibly.
[18] The reporting' of political funds (to be submitted annually and/ or after elections) usually includes various sources of income and specified items of expenditure, e.g. staff and offices, advertisements in print media, radio and TV, campaign material, direct mailing, opinion polling.
Legislation has to strike a balance between practical independence of the agency in charge, effective enforcement of the rules for the funding of political competition and adequate implementation of legal stipulations.
[22] Alexander Heard contributed a groundbreaking analysis for the U.S.[23] International comparison started with Arnold J. Heidenheimer, who also introduced the term 'political finance' to comprise campaign and party funding.
[29] More recent contributions to the literature include Marcin Walecki's monograph on Poland, the book by Daniel Smilov and Jurij Toplak on Eastern Europe, as well as Kevin Casas Zamora's comparative analysis of public funding with two case studies from Latin America.