Political Organizations (U.S.) — NAICS 813940

1. Overview

Political organizations are the entities that raise and spend money to win elections and advance party or candidate interests: political parties, candidate campaign committees, and political action committees (PACs). Under the U.S. federal industry-classification system — the North American Industry Classification System, or NAICS — code 813940 covers establishments "primarily engaged in promoting the interests of national, state, or local political parties or candidates."[3]

The defining feature for anyone approaching this as an investable theme is unusual: this is not an industry you can own. Political organizations are tax-exempt, non-stock entities with no shareholders, no equity, and no profit distribution. There is no "Political Party Inc." to buy. What flows through them is enormous — U.S. federal elections in the 2023–2024 cycle cost roughly $15.9 billion, a record, and more than $20 billion counting state and local races[12] — but essentially none of that is retained as investable value. Almost all of it is spent.

Exposure exists one layer out, in the for-profit vendors that political money flows to: local television broadcasters that sell campaign ad time, digital ad platforms, public-affairs and lobbying firms, media-buying and consulting shops, and fundraising-technology processors. That is the whole shape of the sector — a huge, non-investable core surrounded by a cyclical, largely-investable supply chain — and it is how this primer is organized.

• Public-market route: broadcasters and digital platforms whose revenue swells in even-numbered election years, plus a few listed public-affairs and advocacy holding companies (Section 4).
• Private route: political consulting, voter-data, direct-mail, media-buying, and fundraising-technology firms — nearly all privately held or nonprofit (Section 4).

2. What it is and how it's structured

In scope (813940): national, state, and local political party organizations; candidate campaign committees; PACs, including super PACs; and political clubs and fundraising groups organized to support parties or candidates.[3]

How the core entities are structured. These are not companies. The Internal Revenue Service (IRS) defines a political organization under Section 527 of the Internal Revenue Code (IRC) as a party, committee, association, fund, or other organization organized primarily to accept contributions or make expenditures to influence elections.[5] Notably, such an organization need not be incorporated and need not have formal organizing documents: it can qualify simply through a dedicated bank account for political activity, and it can hold an Employer Identification Number even with zero employees.[5][6] Some politically active groups instead operate under Section 501(c)(4) (social-welfare organizations that may do politics as a secondary activity and need not disclose donors).[7] There are no equity owners; these bodies are governed by candidates, party officials, boards, sponsors, or members, and are funded by contributions, dues, and transfers. Most are small, volunteer-heavy, and often temporary — a campaign committee typically dissolves after the race.

Excluded — and where those activities sit instead. Many of the economically important suppliers to campaigns are classified outside 813940, which is exactly why the money and the payroll live in different NAICS codes:

• Social advocacy organizations (issue-first groups) → NAICS 81331; civic and social organizations → 813410.[3]
• Business associations → 813910; professional organizations → 813920; labor unions → 813930.[3]
• Grantmaking and giving services → 813219.[3]
• Contract (fee-based) fundraising → 561499, All Other Business Support Services; telemarketing for hire → 561422, Telemarketing Bureaus.[3]
• Lobbying and public-relations work for others → 541820, Public Relations Agencies.[3]
• The for-profit consultants, ad agencies, and broadcasters that serve campaigns sit in their own industries (advertising, broadcasting, professional services) — not 813940. This matters because those are the parts you can invest in.

3. How big it is

Our ground-truth federal business statistics (U.S. Census Bureau, County Business Patterns 2023) count, for NAICS 813940:[1]

Our federal source does not report an annual receipts/revenue figure for this code, so we do not state one. The Small Business Administration (SBA) $14 million figure is a contracting size threshold, not an estimate of industry revenue.[2]

The undercount is the point. County Business Patterns counts only employer establishments with paid W-2 staff, and it excludes public administration and most government employees.[4] It therefore massively understates this sector's real footprint, for three reasons:

1. Most political organizations have no employees. By law a Section 527 group can exist with a bank account and no payroll,[5] so the tens of thousands of local party clubs, candidate committees, and PACs run on volunteers and outside vendors. CBP simply doesn't see them.
2. The money is spent, not paid as wages. A campaign's "output" is advertising, mail, and consulting bought from other industries. A race can move tens of millions of dollars while adding almost nothing to this code's payroll.
3. The activity is episodic and disclosed elsewhere. The true scale of political money is captured by Federal Election Commission (FEC) and IRS filings, not the Census.

By those measures the sector dwarfs $640 million of payroll. Over the completed 2023–2024 cycle, federal PACs reported roughly $15.7 billion in receipts and $15.5 billion in disbursements, with reported independent expenditures of about $4.4 billion.[10] Of the roughly 8,200 federal PACs on file, about 2,500 were super PACs (independent-expenditure-only committees), which took in on the order of $5.1 billion.[14] OpenSecrets put total outside spending near $4.5 billion, including undisclosed "dark money."[13] The six national party committees raised roughly $1.2 billion.[15] Read the CBP numbers as "the paid-staff sliver of a multi-billion-dollar money-movement machine," not as the size of the machine. (These are gross political flows with internal transfers, not industry revenue, and they exclude much state and local activity.)

4. The investable universe

There are no publicly traded political organizations, and there cannot be — they are non-stock, tax-exempt entities. Investors instead buy the for-profit ecosystem that campaign money flows into. There is no clean, large U.S.-listed pure play; the universe is a set of proxies, of which the cleanest is local television broadcasters, which capture the largest single share of campaign ad spending and see revenue spike in even-numbered years.

For the broadcasters, political advertising is highly concentrated and highly cyclical: presidential-year 2024 delivered record political revenue, while odd years give almost none — Sinclair's fall from $405 million (2024) to $32 million (2025) is the pattern in miniature.[19] Stagwell (STGW) and Public Policy Holding Company (PPHC) offer exposure to the steadier, retainer-driven advocacy and lobbying side rather than the ad cycle; note PPHC is quoted on London's AIM market (also SEC-registered), not a U.S. exchange. For Alphabet and Meta, political ad dollars are real but a rounding error against total revenue — not a targeted way to play this theme.

Major private and non-investable players. The operating "guts" of the ecosystem are overwhelmingly private or nonprofit, so their ownership and valuations are generally undisclosed:

• Fundraising platforms. WinRed is a for-profit processor for Republican and conservative campaigns — it handled about $1.8 billion from 4.5 million donors in 2024 and roughly $5.6 billion across three cycles — but it is privately held.[23] ActBlue, the larger Democratic- and progressive-aligned platform (over $3.5 billion processed in 2023–2024, average gift about $44), is a nonprofit and cannot be invested in at all.[24]
• Voter data, analytics, and compliance software. Catalist (progressive data/analytics),[25] Aristotle (data, software, consulting, and compliance, serving campaigns, PACs, and advocacy groups),[26] i360 (data, texting, canvassing, outreach),[27] CMDI (Republican-side CRM, fundraising, and compliance),[28] and Data Trust (Republican voter/electoral data).[29] These are party-aligned, privately held, or member-owned.
• Consulting, media-buying, and direct-mail firms. Campaigns outsource almost everything to specialist vendors; the top five media-buying firms alone collected about $2.1 billion from campaigns, parties, and super PACs in 2024.[22] These are overwhelmingly private (family- or partner-owned), so there is no public pure-play.
• The political organizations themselves — parties, PACs, campaigns — are the "customers," not securities.

Bottom line: there is no direct public equity play on political organizations. The investable angles are indirect — broadcasters (cyclical), advocacy/lobbying holding companies (steadier), and digital platforms (diluted).

5. How the money works

Because there are no profits or owners, the useful "economics" here are about where the dollars come from, where they land, and how efficiently they move — not margins on a product.

The revenue side is contributions, regulated by size (federal limits, 2025–2026):

• Individuals may give $3,500 per candidate per election (primary and general count separately, so up to $7,000 per candidate per cycle); up to $44,300 per year to a national party committee's main account; and $5,000 per year to a traditional PAC (a limit not indexed to inflation).[8]
• Super PACs may accept unlimited contributions, including from corporations and unions, so long as they make only independent expenditures and do not coordinate with campaigns — the structure created after Citizens United (Section 7).[8][9]

How organizations raise it falls into a few models:

• Small-dollar, high-volume online fundraising. The dominant modern engine. Platforms like ActBlue and WinRed turn email and text appeals into millions of sub-$50 gifts (ActBlue's average was about $44).[24] The metrics that matter are cost-per-dollar-raised, recurring-donor rate, and donor retention.
• Major-donor and bundled giving. Large checks up to the legal limits, plus "bundlers" who aggregate many donors.
• Unlimited outside money. Super PACs and politically active 501(c)(4)s (so-called "dark money," because (c)(4)s need not disclose donors) fund independent ads; outside groups spent about $4.5 billion in 2024.[13]
• Membership dues, transfers, and party-building for the standing party committees.

Where the money goes. Contributions are almost entirely disbursed, not banked — mostly to advertising (the single largest category), then direct mail, digital outreach, polling, consulting, field operations, events, compliance, and legal work. A committee's financial "health" is judged by cash-on-hand and burn rate, not earnings.

Taxes. A Section 527 organization pays no federal income tax on the contributions it takes in for exempt political functions; only its investment income and other non-exempt-function revenue are taxed (on Form 1120-POL, at the 21% corporate rate).[6] It must register with the IRS (Form 8871) and periodically disclose contributions and expenditures (Form 8872), on a schedule that mirrors the FEC's.[6]

For investors, the useful operating metrics differ by vendor model:

Crucially, gross political spending is not supplier revenue: a platform may process billions in donations while keeping only a small fee.

6. What drives demand

Demand is driven by the election calendar more than the economy, which makes it unusually predictable in timing and unusually spiky in size. Federal cycles run two years for the House, four for the presidency, and six for the Senate.[11]

• The two-year federal rhythm. Even-numbered years (presidential and midterm) concentrate spending; odd years are quiet. Presidential years are the biggest — 2024's ~$15.9 billion set a record.[12]
• Competitiveness. Money floods a handful of contested ("battleground") states, swing House districts, and close Senate races; safe seats attract little. A few tight races can dominate national ad markets.
• Small-dollar donor mobilization. Online platforms lowered the cost of giving and of recurring donations, structurally raising the number of donors and the total raised each cycle.
• Data, targeting, and AI. Growing use of voter data, micro-targeting, polling, and artificial intelligence (AI) expands spending on analytics and technology vendors.
• Deregulation of outside money. Citizens United and its progeny unleashed unlimited super PAC and dark-money spending, which now grows faster than candidate fundraising (Section 7).
• Corporate lobbying and public affairs. Retained government-relations demand around healthcare, energy, technology, labor, education, and transportation — plus rising need for compliance, donor verification, cybersecurity, and disclosure services — sustains a steadier, less cyclical stream.
• Media fragmentation. Spending is shifting from broadcast TV toward digital and connected TV, reshaping which vendors benefit even as the total climbs.

Structurally, digital fundraising, data, and compliance revenue is more recurring than broadcast advertising; retained public-affairs work sits between the two. For the investable broadcasters specifically, demand is a function of how many competitive races fall inside their station footprints — a cluster in a swing state is worth far more in even years than one in a lopsided state.

7. Regulation

This is one of the most heavily regulated corners of American life, and the rules define the industry's structure.

• Federal Election Commission (FEC). Administers and enforces federal campaign-finance law: registration, contribution limits, and public disclosure of receipts and expenditures. PAC types include separate segregated funds, nonconnected committees, super PACs, and hybrid PACs; super PACs may raise unlimited sums for independent expenditures but cannot contribute directly to federal candidates.[8][9]
• Internal Revenue Service (IRS). Grants and polices tax status. Section 527 covers organizations whose primary purpose is influencing elections; Section 501(c)(4) covers social-welfare groups that may do politics secondarily and need not disclose donors.[5][7] Filings can include Form 8871 (notice), Form 8872 (periodic contributions/expenditures), Form 1120-POL (tax return), and in some cases Form 990/990-EZ.[6] Section 501(c)(3) public charities are barred from intervening in campaigns.[7]
• Federal Communications Commission (FCC). Requires broadcast and other covered media to maintain public inspection files, including detailed political-advertising and political-programming records.[30]
• Bipartisan Campaign Reform Act (BCRA, "McCain–Feingold," 2002). Banned unlimited "soft money" to national parties and restricted certain pre-election "issue" ads — the last major tightening of the federal rules.[32]
• Citizens United v. FEC (2010). The Supreme Court held that independent political spending by corporations and unions is protected speech and cannot be limited. Together with a related appellate ruling, it created the super PAC.[32] This is the single most consequential legal event shaping today's money flows.
• State and local law. Every state runs its own campaign-finance, lobbying, privacy, consumer-protection, and data-security regime for state and local races, layered on top of the federal system.

The federal trend since 2010 has been toward more money and less restriction, with disclosure (not dollar limits) the main remaining constraint — and even that is porous for 501(c)(4) "dark money."

8. Competitive dynamics and consolidation

• A durable duopoly, two consolidated fundraising rails. Two parties dominate, and each side's small-dollar money now runs largely through a single processor: ActBlue for Democrats and progressives, WinRed for Republicans and conservatives, each moving billions per cycle.[23][24] Both enjoy strong network effects — saved donor payment details and deep campaign integrations create high switching costs — which is why challengers have struggled.
• The core market is fragmented; suppliers consolidate. Political committees themselves are fragmented and often temporary, forming around candidates, districts, and cycles. The durable value accrues to suppliers, where advantage comes from trusted donor/voter data, compliance track record, party or issue expertise, long-standing relationships, and the ability to integrate fundraising, data, media, and reporting.
• Roll-ups on the services side. Public Policy Holding Company runs an acquisition-led holding-company model across government relations, public affairs, compliance, and communications; Stagwell has expanded its advocacy and political-data capabilities through acquisitions.[20][21] A small number of media-buying and consulting firms capture an outsized share of dollars — the top five media buyers alone took in roughly $2.1 billion in 2024.[22]
• Broadcast consolidation. The local-TV owners that harvest political ad dollars — Gray, Nexstar, Sinclair — have themselves consolidated through acquisitions and continue to lobby to loosen station-ownership caps, which would let them capture more of the political ad pie.
• The digital shift. Digital and connected-TV platforms are steadily taking share from broadcast, widening the set of beneficiaries beyond traditional TV and pressuring the broadcasters' long-run cut.

9. Risks

• Extreme cyclicality (the defining investor risk). Broadcast and campaign-service revenue roughly disappears in odd years and surges in even ones; valuing these stocks requires averaging across the cycle, and a weak election map can disappoint even in an "on" year. Sinclair's $405M→$32M swing frames the magnitude.[19]
• Cord-cutting and the digital shift. The secular decline of broadcast viewership threatens the very channel that captures the most political money; over time, dollars migrating to digital dilute the broadcasters' windfall.
• Regulatory reversal (policy-driven, not market-driven). A future Supreme Court or Congress could re-tighten campaign-finance rules, curb super PACs, or force donor disclosure — reshaping flows. Further deregulation would enlarge them.
• Platform, disclosure, and privacy scrutiny. Fundraising platforms face recurring legal and regulatory scrutiny over recurring-donation defaults, refund handling, and donor privacy; voter data is sensitive and politically valuable, raising cybersecurity risk.
• Concentration and reputational risk. The sector is politically charged. Vendors and platforms depend on a few large campaigns, parties, or corporate clients, and can become targets of investigation, boycotts, or de-platforming depending on which side they serve; controversial work can trigger client, donor, or employee departures.
• Technology substitution and M&A execution. AI may compress the cost of creative, targeting, polling, and compliance work; roll-up strategies can fail through overpayment, integration problems, or loss of founder talent.
• No downside floor for the organizations themselves. Campaigns and many PACs are designed to spend to zero; there is no enterprise value to preserve — another reason the core is non-investable.
• Measurement risk. Federal business statistics omit nonemployers, government activity, most state and local activity, and volunteer labor — so headline industry figures understate real activity.

10. How to invest and the outlook

There is no direct way to invest in political organizations, and there won't be — they have no equity by law. The realistic routes are indirect:

• Public markets. The local-TV broadcasters (Gray/GTN, Nexstar/NXST, Sinclair/SBGI) are the closest thing to a pure-play election-advertising trade, but must be underwritten across a full election cycle, not bought as a buy-and-hold on "politics"; the revenue is lumpy, secularly pressured by cord-cutting, and dependent on race competitiveness in their markets. Stagwell (STGW) offers broader, steadier exposure to advocacy, communications, political consulting, and data; Public Policy Holding Company (PPHC, AIM-listed in London) is the closest listed proxy for lobbying and public affairs, with recurring retainer economics (>91% retainer revenue).[21] Digital platforms (GOOGL, META) capture growing political ad dollars but are far too diluted to be a targeted play.
• Private markets. The real operating businesses — political consulting, voter data and analytics, direct mail, media buying, and the for-profit WinRed processing rail — are almost all privately held or nonprofit. Exposure means private equity, direct ownership, or building/serving a vendor. Diligence should center on customer retention, party and client concentration, recurring non-election revenue, donor chargebacks, data rights, cybersecurity, regulatory history, election-adjusted earnings, and dependence on founders or political personalities. There is no public fund that cleanly targets this.

Near-term outlook. The 2026 midterms are the next demand event. S&P Global projects broadcast political ad revenue to exceed $4 billion in 2026,[31] with total political ad spending running well above 2022 — a strong, if smaller-than-presidential, tailwind for the broadcasters that year, followed by a 2027 trough. The multi-decade trend is unmistakable: each cycle spends more than the last, small-dollar online fundraising keeps widening the donor base, outside/dark money keeps growing faster than candidate money, and dollars keep migrating from broadcast toward digital and connected TV. The investment quality varies sharply by model — broadcast advertising the most cyclical; fundraising infrastructure, data, compliance, and retained public-affairs services the most attractive where they carry recurring, balanced, non-election revenue. The thesis is never ownership of political organizations; it is ownership of the infrastructure that campaigns, parties, donors, corporations, and advocacy groups repeatedly need.

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Sources

1. U.S. Census Bureau, County Business Patterns 2023, NAICS 813940 (establishments, employment, annual and Q1 payroll), 2025. https://www.census.gov/programs-surveys/cbp.html
2. U.S. Small Business Administration, Table of Small Business Size Standards, NAICS 813940 ($14M receipts), 2023. https://www.sba.gov/document/support-table-size-standards
3. U.S. Census Bureau, 2022 NAICS Definition, Code 813940 — Political Organizations (scope and exclusions/cross-references), 2022. https://www.census.gov/naics/?details=813940&input=813940&year=2022
4. U.S. Census Bureau, County Business Patterns: Coverage and Methodology (employer-only scope; excludes nonemployers and most government), 2024. https://www.census.gov/econ/overview/mu0800.html
5. Internal Revenue Service, Political Organization Defined (IRC Section 527; no incorporation required; separate bank account; EIN without employees). https://www.irs.gov/charities-non-profits/political-organizations/political-organization-defined
6. Internal Revenue Service, Filing Requirements for Political Organizations (Forms 8871, 8872, 1120-POL, 990/990-EZ; taxable income). https://www.irs.gov/charities-non-profits/political-organizations/filing-requirements-for-political-organizations
7. Internal Revenue Service, Political Activities of Exempt Organizations (501(c)(3) prohibition; 501(c)(4) rules). https://www.irs.gov/charities-non-profits/political-activities-of-exempt-organizations
8. Federal Election Commission, Contribution limits for 2025–2026. https://www.fec.gov/updates/contribution-limits-for-2025-2026/
9. Federal Election Commission, Political Action Committees (PACs) (types; super PACs / independent-expenditure-only committees). https://www.fec.gov/press/resources-journalists/political-action-committees-pacs/
10. Federal Election Commission, Statistical Summary of 24-Month Campaign Activity of the 2023–2024 Election Cycle (PAC receipts/disbursements; independent expenditures), 2025. https://www.fec.gov/updates/statistical-summary-of-24-month-campaign-activity-of-the-2023-2024-election-cycle/
11. Federal Election Commission, Election Cycle and Aggregation (2-, 4-, and 6-year cycles). https://www.fec.gov/help-candidates-and-committees/filing-reports/election-cycle-aggregation/
12. OpenSecrets, "Total 2024 election spending projected to exceed previous record" (~$15.9B federal; >$20B with state/local), 2024. https://www.opensecrets.org/news/2024/10/total-2024-election-spending-projected-to-exceed-previous-record/
13. OpenSecrets, "Outside spending on 2024 elections shatters records, fueled by billion-dollar 'dark money' infusion" (~$4.5B outside spending), 2024. https://www.opensecrets.org/news/2024/11/outside-spending-on-2024-elections-shatters-records-fueled-by-billion-dollar-dark-money-infusion/
14. OpenSecrets, "Super PACs, 2024" (count ~2,500; ~$5.1B receipts), 2025. https://www.opensecrets.org/political-action-committees-pacs/super-pacs/2024
15. Ballotpedia, "Party committee fundraising, 2023–2024" (~$1.2B national committees), 2024. https://ballotpedia.org/Party_committee_fundraising,_2023-2024
16. eMarketer, "2024 Political Ad Spending Will Jump Nearly 30% vs. 2020" (~$12.3B total; ~$3.46B digital), 2024. https://www.emarketer.com/press-releases/2024-political-ad-spending-will-jump-nearly-30-vs-2020/
17. Gray Media, Inc., "Q4 and Full-Year 2024 Financial Results with Record Political Advertising Revenue" (~$497M political ad revenue), 2025. https://www.nasdaq.com/articles/gray-media-inc-reports-q4-and-full-year-2024-financial-results-record-political
18. U.S. Securities and Exchange Commission, Nexstar Media Group 2025 Form 10-K (political ad revenue swing: +~$426M in 2024, −~$446M in 2025), 2026. https://www.sec.gov/Archives/edgar/data/1142417/000119312526078361/nxst-20251231.htm
19. U.S. Securities and Exchange Commission, Sinclair 2025 Form 10-K ($405M political ad revenue in 2024 vs $32M in 2025), 2026. https://www.sec.gov/Archives/edgar/data/912752/000197121326000012/sbgi-20251231.htm
20. U.S. Securities and Exchange Commission, Stagwell 2025 Form 10-K (advocacy, political campaign management, grassroots, fundraising, data via SKDK, Targeted Victory), 2026. https://www.sec.gov/Archives/edgar/data/876883/000087688326000010/stgw-20251231.htm
21. Public Policy Holding Company, Inc. (AIM: PPHC; SEC-registered), 2025 annual report / Form 10-K (>91% retainer-based client revenue; ~$150M 2024 revenue). https://www.sec.gov/Archives/edgar/data/1903508/000162828026022359/pphc-20251231.htm
22. OpenSecrets, "The billion-dollar middlemen: How a handful of firms dominate political ad buying" (top-five media buyers ~$2.1B), 2026. https://www.opensecrets.org/news/2026/02/this-handful-of-firms-dominates-political-ad-buying/
23. WinRed, "About WinRed" / corroborating coverage (for-profit; ~$1.8B in 2024; ~$5.6B over three cycles). https://winred.com/about
24. ActBlue, "About ActBlue" / corroborating coverage (nonprofit; $3.5B+ processed 2023–2024; ~$44 average gift). https://www.actblue.com/about/
25. Catalist, "Who We Are" (progressive political data and analytics). https://catalist.us/who-we-are/
26. Aristotle, "Political Data, Consulting & Software" (data, software, consulting, compliance for campaigns, PACs, advocacy). https://www.aristotle.com/
27. i360, "Political Data Solutions & Voter Targeting" (data, texting, canvassing, outreach). https://www.i-360.com/
28. CMDI, "Political Fundraising and Compliance Software" (Republican-side CRM/fundraising/compliance). https://www.cmdi.com/
29. Data Trust, "Home" (Republican voter/electoral data). https://thedatatrust.com/
30. Federal Communications Commission, Public Inspection Files (political advertising/programming records). https://publicfiles.fcc.gov/
31. S&P Global Market Intelligence, "Broadcast political ad revenue set to exceed $4 billion in 2026," 2026. https://www.spglobal.com/market-intelligence/en/news-insights/research/2026/04/broadcast-political-ad-revenue-set-to-exceed-4-billion-in-2026
32. Legal Information Institute (Cornell) / Federal Election Commission, Citizens United v. FEC (2010) and Bipartisan Campaign Reform Act of 2002 (BCRA) background. https://www.law.cornell.edu/uscode/text/26/527