What are 527's?

According to the IRS, a Section 527 organization is an organization that is created to receive and disburse funds to influence or attempt to influence the nomination, election, appointment or defeat of candidates for public office. A 527 organization does not fall under the regulation realm of the Federal Election Commission and is not subject to the same limits as FEC regulated organizations.

527's are exempt from federal income tax on contributions received but they are required to report their funding and expenditures to the Internal Revenue Service. These unregulated contributions are frequently referred to as "soft money." Because 527 organizations are only required to file regular disclosure reports with the Federal Elections Commission if they make expenditures to directly advocate the election or defeat of any candidate for federal elective office. They also may not coordinate their activities with any candidate's campaign.

Many 527s are run by special interest groups and used to raise unlimited amounts of money to spend on issue advocacy and voter mobilization. The line between issue advocacy and candidate advocacy is the source of heated debate and litigation.

While most 527's are used for issue advocacy such as the Florida Leadership Council, Progressive Civic Fund, and Alask to America Energy Fund, there are vast number of new 527's that appear during a presidential election year and the money donated has grown exponentially between election cycles, as seen in the graph below.


Source: http://www.publicintegrity.org/527/report.aspx?aid=403

Examples of 527s that are directly affiliated with the presidential election include Swift Boat Veterans for Truth, Texans for Truth, The Media Fund, America Coming Together, the Moveon.org Voter Fund, the Progress for America Voter Fund, and the November Fund.

Because of the ability to collect funds from anywhere and in any amount, 527's utilize the Internet to collect support and money for their causes. With no income tax collected and very little cost to start a 527 and a website, 527's have the power to mobilizing support for an issue very quickly during election time.