Understand the difference between party fund and electoral fund and how it is divided

The financing of political activity in Brazil is predominantly based on public resources, managed and supervised by the Electoral Court. Although frequently confused in public debate, the Party Fund and the Special Campaign Financing Fund (known as the Electoral Fund) constitute distinct instruments, with specific legislative origins, purposes and distribution rules. The exact understanding of the difference between party funds and electoral funds and how each amount is divided is essential for understanding the democratic dynamics and the maintenance of parties in the country.

Fund definitions and attributions

The main distinction between the two mechanisms lies in the purpose of using resources and the temporality of their distribution. Both aim to guarantee the parties’ autonomy in relation to private economic power, but they operate on different fronts.

Party Fund

Officially called the Special Financial Assistance Fund for Political Parties, this resource is permanente. Its function is to pay for the structural maintenance of the subtitles. The funds are transferred monthly (twelfths) and are intended for:

• Payment of ordinary expenses (water, electricity, office rental, personnel).
• Doctrinal and political propaganda.
• Enlistment and party membership campaigns.
• Creation and maintenance of research and indoctrination and political education institutes or foundations (minimum of 20% of the total received).
• Encouragement of female participation in politics (minimum of 5% of the total received).

Electoral Fund (FEFC)

The Special Campaign Financing Fund is a resource of temporary and specific. It is only available during election years and is exclusively intended to finance candidates’ political campaigns. Its resources cannot be used to pay party debts or maintenance expenses, but are strictly used for:

• Production of campaign material (saints, stickers, videos).
• Boosting content on the internet.
• Travel and travel expenses for candidates.
• Hiring campaign staff.

History and legislative evolution

The coexistence of these two funds is the result of profound changes in Brazilian electoral legislation in recent decades, driven by the need to reform the political financing model.

O Party Fund It was established by Law No. 9,096/1995 (Political Parties Law). It consolidated previous support mechanisms for associations, consisting of budget allocations from the Union, electoral fines and private donations deposited directly into the fund’s account.

O Electoral Fundin turn, is a recent creation, established by Laws nº 13,487/2017 and 13,488/2017. Its creation was a direct legislative response to the 2015 Federal Supreme Court (STF) decision, which declared campaign financing by legal entities (companies) unconstitutional. Without corporate support, the National Congress approved the FEFC to make the elections viable, preventing only candidates with high personal wealth from being able to compete.

How the budget is divided

The distribution of resources follows strict mathematical criteria defined by law, based mainly on the representation of parties in the National Congress. Understanding how each fund is divided reveals the importance of performance at the polls for the financial survival of parties.

Party Fund division criteria

The total amount is defined in the Annual Budget Law. Distribution to parties registered with the Superior Electoral Court (TSE) follows the following rule:

1. 5% do total: Divided equally between all parties that met the registration requirements and the barrier clause.
2. 95% do total: Distributed in proportion to the vote obtained by each party in the last election for the Chamber of Deputies.

Electoral Fund division criteria

The volume of FEFC resources is also defined by the Union budget at each election. Sharing is more complex and follows four cumulative criteria:

1. 2% do total: Divided equally between all registered parties.
2. 35% do total: Divided between parties that have at least one representative in the Chamber of Deputies, in proportion to the percentage of votes obtained in the last election for the Chamber.
3. 48% do total: Divided proportionally to the representation of each party in the Chamber of Deputies (considering ownership at the time of the election).
4. 15% do total: Divided proportionally to the representation of each party in the Federal Senate.

It is important to note that to access these resources, parties must comply with the Performance Clause (or Barrier Clause), introduced by Constitutional Amendment 97/2017. Parties that do not reach a minimum percentage of national votes or a minimum number of deputies elected in several states lose the right to receive these funds.

Importance to the political system

The existence of public financing is institutionally justified as a tool to guarantee democratic plurality and popular sovereignty. By removing the weight of private economic power — especially that of large corporations — from the center of the electoral process, the system seeks to balance the dispute between candidates from different ideological spectrums and social classes. Public financing allows minorities and groups with less access to private capital to have electoral viability, in addition to subjecting party spending to a rigorous accountability process supervised by the TSE and society.

The transparent management of these resources is a pillar of Brazilian electoral integrity. Both the Party Fund and the Electoral Fund require associations to present detailed accounts. Irregular use of funds can lead to severe sanctions, such as the return of the amounts to the National Treasury plus a fine, the suspension of receiving new quotas and, in extreme cases, compromising the registration of the candidacy or party.