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Vol. 1: Why everything you think about fundraising is wrong

written by Steven Thomas May 17, 2021

As someone who is involved on campaigns around the country, it constantly amazes me how Virginia politicians and consultants are living in the 1990s, in terms of strategy, technology, and perspective.

The nomination contest just concluded featured a lot of erroneous statements (and some lies), but one of the ones that’s more common to races across the country is messaging around fundraising.

Truthfully, most people just don’t understand fundraising. So it’s not hard for politicians to mislead people about it.

This article is an effort to educate people so they aren’t as easily mislead by politicians about fundraising. I have been fundraising for nonprofits and political candidates for 20 years, and that is the perspective I come from. 

So, to begin, I’ll go back to 2008, the DEMOCRAT presidential primaries.

Question: why did Barack Obama beat Hillary Clinton, aside from the obvious fact that she sucks and is a terrible candidate?

Answer: She ran out of money, and he had what he needed.

Why was that?

Because she employed the tried and true Establishment means of raising money, getting big donations from (a relatively small number of) her friends. At first, she was lapping Obama in fundraising.

But there are limits on what big donors can give, even when donation levels are unlimited. Sooner or later, they turn off the tap.

You may remember Hillary literally begging for money in all her campaign speeches (terrible idea) toward the end, because she amassed a huge debt because her big donors could only help her but so much- and she wasn’t prepared to go out and try for large numbers of small donors. Didn’t have the know how.

Obama, on the other hand, raised his money from the start from a MUCH larger number of small donors. Small donors were a HUGE portion of his fundraising strategy, and it paid off for him as the campaign went on.

Why?

Because, unlike with large donors, it is VERY likely that a small donor will give multiple times in one campaign or one year. It’s not that much to give $25, multiple times. To give $5000 multiple times however, is a more difficult ask.

So as Hillary ran out of money and actually ran up an enormous campaign debt, had to cut staff and advertising as the campaign wore on, and finished after the loss with a huge debt to pay off, Obama got STRONGER as time went on.

He kept hiring staff, kept advertising, kept winning, because those small donors kept feeding his campaign machine.

I’ve seen that dynamic play out dozens of times since then, on the Republican side. You have small donor focused fundraising providing late legs where large donor funded campaigns struggle (Congratulations to Winsome Sears, who won her nomination with a small donor strategy).

The times have changed. Either the old 1990s-era Establishment way of thinking on fundraising must end, or our candidates will get beaten like a drum, repeatedly.

Therefore, the bigger question now is not how much money has a given candidate raised in a certain time period, but rather how many donors do they have? In today’s day and age, given the technology available to us, donors are king- not dollars.

I always advise candidates to have a well-rounded approach to fundraising. Do direct mail and email for small donors. Do calls and events for major donors. That way, you can get funded now AND as the campaign goes on, an important strategic advantage.

 So how should a voter look at fundraising messaging?

Establishment candidates LOVE to preen about amount of money raised. But one must look at HOW it was raised. Small donors matter, and are oftentimes a better indicator of overall support and viability in the general election.

There is another aspect of this discussion that bears mentioning, because this is Virginia, a state with a very corrupt political culture (ranked 4th most corrupt).

One aspect of fundraising that many people find distasteful is “quid pro quo” fundraising- in other words, where promises of actions are made by politicians in exchange for fundraising support.

Transactional fundraising.

Here in VA, where there are no limits on fundraising for state races, this is a gigantic problem. Routinely, politically connected companies like Dominion essentially buy influence with legislators and statewides who then have responsibility over their regulation.

This results in compromised politicians, who wind up raising money from very few sources, to whom they are badly leveraged.

This affects policy in negative ways quite often- and not in ways that loyal Republican voters would want.

The corruption issue came to the fore in the downfall of our last Republican governor, Bob McDonnell. His scandal and conviction were so damaging that our statewide nominees couldn’t use him for campaigning in 2013, and the stink of that scandal sent the party into a tailspin from which it has never recovered.

He was too heavily leveraged to one big donor, who got him in trouble.

Corruption is a large issue in Virginia politics, and it is a large issue in fundraising. That is why fundraising from many diverse sources, and many donors, makes so much sense.

If you have 5000 donors, then no one of them has leverage over you.

If you have 200 donors, every one of them has leverage over you.

If we want to be a party that combats corruption instead of feeding it, and get better policy outcomes because of that, then we must look for candidates who don’t feed the system. That goes at every level- the people we send to Richmond must be of a higher ilk than those we had sent in the past.

So be a more informed consumer of information about fundraising. When someone tells you they set a record in fundraising, do the research on VPAP and see HOW they did it. It will tell you more about that candidate than mere totals ever will.

Vol. 1: Why everything you think about fundraising is wrong was last modified: May 17th, 2021 by Steven Thomas

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Steven Thomas

A former GOP unit chair and SCC member, Steve Thomas does fundraising and management for nonprofits.... with a little politics on the side. He and his family live in the Peoples' Republic of Reston.

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