Soft Money Definition

Soft money has three possible meanings, depending upon the context. In the simplest interpretation, soft money means paper currency-as opposed to "hard" currency such as coins. Soft money is sometimes used to refer to a one-time funding grant from a government to an organization pursuing a special purpose. For example, a medical school might receive a "soft money" grant to research a particular disease. Soft money also describes a special type of financing received by political candidates as an election contribution-in this context, soft money has a complex legal definition.