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Campaign Funding

Campaign Funding

The money and power debate raises its head during every election cycle, but does the candidate with the deepest pockets always win the election?

The conversation about the influence of money on political elections is certainly a necessary one. One normally assumes that those with the most money win, but fundraising ability alone does not equate to votes.

Robert Shrum, a senior fellow at NYU’s Graduate School of Public Service has worked as a senior advisor on many Democratic campaigns in the past including Al Gore in 2000 and John Kerry in 2004. Shrum maintains that there is “no linear relationship between the amount of money and degree of success”. Money, if used appropriately, can buy you sufficient time in your campaign to share your narrative with the electorate. So we might say that fundraising ability keeps us at the poker table but doesn’t necessarily mean we will take home the pot.

Be Practical

Money may buy you time during an election but that money needs to be used wisely. In order to run a successful campaign, every cent has to be held accountable. Money has never been more precious and if it isn't put to practical use then you risk hurting your own campaign. During the 2004 election, the Democratic candidate, Howard Dean overspent wildly and, ultimately paid the price at the Iowa caucuses.

Since the 70’s, primary campaigns have to work with ‘the cap’ meaning that in order to obtain matching federal funds, candidates have to keep their spending below per-state limits. In practice, the cap has really only mattered in the first two states, Iowa and New Hampshire. In 2003, the Dean campaign decided to opt out of the public financing system, which meant it could spend as much money as it wished. But the Dean camp, who raised and spent nearly $40m during his candidacy, used exorbitant amounts of money on expensive TV ads and didn’t budget for the Kerry fight back in Iowa.

Rick Perry, the former Texas Governor is a repeat offender in this category. During his 2012 campaign, he began his 4th quarter with roughly $15m. The Federal Election Commission declared that he raised just under $3m between Oct 1st and Dec 31st, a drastic drop from the $17m he had succeeded in fundraising in the months previous. While his donations slowed, Perry’s campaign continued to spend the cash as they had done during his peak. Perry spent large sums of money on the payroll for campaign staffers, media production, advertising time and ironically, finance consultants. He was forced to drop out of the race on the 19th of January. Fast forward to 2015 and Perry once again fell victim to outlandish expenditure. His now defunct campaign had a burn rate of 392 percent which shows that he was spending money much quicker than it was coming in. Sound familiar?

Thinking long term

“The misconception that political spending drives electoral outcomes is reinforced every campaign season by sensational media coverage", according to Professor of Economics, Jeff Milyo of University of Missouri. There is no doubt that the media is obsessed with candidate's funding but, as evidenced by Hillary Clinton's campaign in '08, it is also down to the way that funding is spent that determines success or failure.

The former Secretary of State has banished the demons of her '08 campaign by spending more wisely in order to build stronger campaign infrastructures. Clinton spent double the amount of money on staff compared to her opposition, three times as much on office space and millions more on advertising. Robby Mook, Clinton’s campaign manager stated earlier in 2016 that it was all part of the long game strategy and it seems to have worked. “That's why we made smart early investments, in data analytics, tech, digital and on-the-ground organizing to build a strong sturdy campaign designed to fight for every vote in every state”. What Mook articulated was that they placed much emphasis on a strong ground game and putting the structures in place to facilitate that. They are also clearly very focused on being smarter than their opponents in understanding the voter feedback. This type of campaign is moving away from simply using funds to batter voters with TV ads and is moving towards targeting swing voters for further work closer to election day.

Secrets to success

There is no doubt that thousands of column inches will be devoted to who raised the most money in 2016. Money is important and all, but it also obscures the hard work that is done behind the scenes in understanding voter groups. The next President will be the person with the smartest campaign team. What does that mean?

  • It means the campaign that does the best job of understanding these geographic groupings and is able to dissect them into Us, Them and Not Sure.
  • It means the campaign that has learned from its voters about the most pressing issues and will be able to internalize these issues into campaign messaging so it can win over the swing voters.
  • Finally, the campaign that can forensically identify which voters need to be contacted in the run-up to election day and which voters need GOTV support.

Robby Mook’s, ‘long game’ is about putting the structures in place to allow this type of analysis take place.

Obama's legacy from '08 and '12 is surely that he has changed the way campaign managers operate forever. His ‘08 campaign particularly was a watershed in use of data analysis from ground operations to strategize who to target. He also showed the way in mobilizing grassroots support through social media in a way that was not possible before then. The idea of community building through an election campaign really began with Obama and looks likely to continue in politics with the advent of the likes of NationBuilder.

Making the best use of your campaign funding is a delicate balancing act of the high level and the grassroots. The political-consultant-type campaign of PR and influential networks with the campaign-manager-type campaign of hands-on management and grassroots mobilization may be the key to your campaign spending. Whatever the mix is that you decide on playing smart will be the key to success.

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