An exploratory committee is a committee that is started by a prospective political candidate to explore the idea of running for office.
It is frequently referred to as testing the waters.
The committee works to determine if a prospective candidate can get enough support to make the effort of announcing his or her candidacy. It also investigates whether or not the potential candidate would be able to raise enough money to run a campaign effectively.
It is also a good avenue for raising funds. Candidates don't generally have to disclose fund received during the exploratory committee phase.
A person that is testing the waters does not have to register or report as a candidate until such time as that prospective candidate actually decides to run.
It also provides opportunities for prospective candidates such as being allowed free airtime. Before primary elections are held, the media begins to speculate who will be running for office. If a candidate has an exploratory committee formed, and the prospective candidate "leaks" word of it to the media, more attention will be garnered by the media which will then gauge the progress of a candidate and speculate his or her chances and helps to determine how popular a candidate might be.
Exploratory committees are nothing new, they have been around for quite some time.