Final answer:
Hard money is regulated contributions to campaigns, while soft money is unregulated donations to political parties or for issue advocacy, limited by McCain-Feingold Act. Dark money is spent by nonprofits without donor disclosure, influencing politics without direct coordination with candidates or parties.
Step-by-step explanation:
The differences between hard money, soft money, and dark money involve regulations and transparency in political financing. Hard money refers to regulated contributions made directly to political candidates' campaigns, subject to limitations and disclosure requirements. Individuals may currently give up to around $2,500 per candidate per election cycle under these rules. In contrast, soft money is money collected by political parties for purposes such as 'party-building' that is not subjected to the same regulations or limits. Critically, the Bipartisan Campaign Reform Act of 2002, commonly known as the McCain-Feingold Act, sought to limit the use of soft money. However, loopholes still enabled organizations to exert influence without explicit endorsements of candidates, allowing them to evade Federal Election Commission rules.
Dark money refers to funds raised for political purposes by nonprofit organizations that do not disclose their donors. These organizations can spend money on political activities as long as they do not coordinate directly with candidates or parties. The debate over whether spending money equates to exercising free speech is contentious, with the Supreme Court's decision in Buckley v. Valeo upholding the right to regulate campaign contributions while striking down restrictions on personal or family campaign expenditures.