Political funds raised outside the regulations and laws of the Federal Election Campaign Act.

Soft money must be deposited in non-federal party accounts - i.e. at state level - and cannot be used in connection with federal elections. However, it often does just that via a series of loopholes in current legislation.

Many states allow individuals - as well as companies and unions (who are prohibited from giving directly to federal candidates) - to give unlimited amounts direct to state parties.

This can be spent on grassroots organising, advertising and voter drives that may indirectly help all the party's candidates, including the presidential candidates.

In recent presidential elections, national parties and candidates have worked hard to raise larger and larger amounts of soft money for their state affiliates to boost the party and get around direct limits.

This ability to raise and spend unlimited amounts of soft money on presidential campaigns by channelling it through state parties effectively renders traditional limits meaningless.

Because of the lack of firm accountability for soft money, advocates of campaign finance reform tend to focus on this type of contribution.