Funding of political campaigns has two definite negative effects. First it practially rules out anybody who does not have massive financial backing. When a candidate is backed by a huge campaign they are much more prominent and far more likely to receive votes than a candidate who has no financial backing.
Secondly it opens up an avenue for corruption. Without large donations there is less hope of being elected, therefore people with large amounts of money to donate are in a position where they have some kind of leverage over the candidate standing for election. Take the Forumla One donation as an example. The Labour Party received a £1,000,000 donation from Bernie Ecclestone before they were elected, then later when Labour were banning cigarette advertising in sporting events but make an exception for Forumla One.
I believe that there should be no donations at all. With each candidate standing individually due to the abolishment of political parties campaigns will cost significantly less. There will be no need for poster campaigns or TV advertisements. Each individual candidate should have only a few "honest" ways of campaigning for votes.
Removing the costly financial element of campaigning will help to remove corruption and also give an equal chance to all candidates regardless of their financial background or backing.