There’s a subtle difference between hard and soft money. Both are terms used to designate political donations for a candidate. Both terms follow a different governmental ruling, which is passed by the FEC. Hard money is donations from political parties/organizations that are approved by laws of the FEC. Soft money is donations from parties which aren’t regulated by the FEC. The difference comes down to the approval and submission by the FEC.
Soft money isn’t regulated by the law. It’s considered to be free political contribution, and has no limits. Hard money is given to a specific candidate, committee, or other agency as limited funding. Hard money is directly given to a candidate. The candidate cannot be given more than $1,000 in a year. Soft money is given to a state, or local, committee, or other agency. It’s not highly monitored or regulated, and parties can use the money in promoting candidates, or support the party’s political goals – political conventions, etc.
Hard money as a term can be traced back to ancient times, and ended during World War II. It cannot be created or printed. It’s like gold or silver. Whereas soft money, is used to designate paper bills and coins. Soft money is passed by the government as stock, or bonds. It’s issued as currency. Hard money is the one that existed. It’s precious and rare commodities, like gold, diamonds, or silver.