PACs and 527s get talked about a lot in elections, but are terms that I suspect many aren’t familiar with.

Both are essentially “interest groups” (versus the campaigns themselves) which seek to have an impact. In a nutshell, PACs (Political Action Committees) directly advocate voting for or against a politician or bill—a committee running ads saying, “Vote for Obama” or “Vote against privatizing social security!”. 527s (the name coming from a section of the IRS tax codes) are more indirect. Wikipedia’s phrasing is that 527s “do not make expenditures to directly advocate the election or defeat of any candidate for federal elective office.”

While there’s a thin line between 527s and PACs in terms of what they do, the distinction is important. PACs are regulated by the Federal Election Commission, but 527s are not, and thus enjoy greater latitude.

The hard money vs. soft money matter is explained on Wikipedia, too. “Hard money” refers to money going directly to candidates or their political parties (e.g., the DNC and RNC). I donated the token sum of $15 to Obama’s campaign, which was hard money. Soft money refers to donations to 527s and the like: because they’re not regulated by the FEC, they don’t have donation caps (like the $4,600 figure you often see), and thus often receive multi-million dollar donations from politically-inclined millionaires (and billionaires).