Trolling for Small Donors and Big Money
With the cost of a presidential campaign spiraling ever higher, candidates are working tirelessly to rake in every dime as early as possible. But because federal law limits any one individual donation to a candidate to $2,300 for the primary cycle, the presidential hopefuls increasingly have to wonder: Is the pool of donors big enough to feed the pace of this election?
As of June 30, with more than six months to go before a vote is cast in New Hampshire, the 19 announced candidates had raised $295.8 million among them, with over 80 percent of that going to the six candidatesthree in each partywho lead in the polls.
But another figure is perhaps more telling: Among those top-tier fundraisers, 60 percent of the money comes from donations of $2,000 or more. Most of those donations were for the primary cycle, though a few were separate donations targeted for a general election campaign; donors can give an additional $2,300 for the general election. But the bottom line is that many donors are, according to the rules, maxed out through the end of the primary cycle. So if this pace of fundraising is going to continue, many of the candidates will have to find new donors.
The ones who won't are the candidates who have gotten lots of little donations from lots of people. The candidates can go back to those donors for more money, since those supporters aren't close to the official $2,300 primary-cycle ceiling. That puts Barack Obama in the most advantageous position among the top tier, according to a U.S.News & World Report analysis of Federal Election Commission data through the end of June. To date, just 46 percent of his donations have been in installments of $2,000 and over. Rudy Giuliani, by contrast, has the least renewable pool of donors, with 72 percent nearly maxed out. Hillary Clinton follows close behind with 70 percent close to the ceiling.
The Campaign Finance Institute did a similar analysis on the distribution of donations among the candidates, focusing only on money donated for primary elections. That analysis also found Clinton and Giuliani leading in maxed-out donors. U.S. News did not break out general election giving, which is most prominent in Clinton's campaign, because many $4,600 donations were ambiguously either meant to be split between the primary and general elections or represent the gift of a couple in the same household.
The Obama campaign has particularly put a premium on smaller gifts. The campaign has held $25-per-ticket fundraisers in Minneapolis, Louisville, Ky., Oklahoma City, and Tampa, along with several others where tickets were $100.
As the Internet becomes an entrenched force in presidential politics, many argue, online donations, which tend to come in smaller increments, may be the answer to this predicament, particularly as more people get comfortable with the idea of transferring money online. This is increasingly true, argues online strategist Joe Trippi, who works for Edwards, as people become more experienced shopping online.
"It helps that somebody has bought five or six books on Amazon," Trippi says. "They entered their credit card information, closed their eyes, and their identity didn't get stolen."
MIT political science professor Stephen Ansolabehere says it might be too early yet to judge whether this percentage makes a difference, but the early primary season puts more pressure on campaigns to continue raising a steady stream of dollars. Ansolabehere says that serious candidates must have national field teams put in place by November or December because of the tightly packed primaries, and that costs money.
Traditionally, he adds, most personal donations come in from November through January before the primaries begin, and usually only a small percentage of donors give the maximum amount of money they can by law.
Small donors have advantages beyond their potential for future giving, says Michael Malbin, executive director of the Campaign Finance Institute.
"Small donors are far more likely to become door-to-door volunteers than major donors," Malbin says. "In a situation where you have to run in 26 states the same day, you can't possibly buy enough airtime to saturate those 26 states. Having an organization in those states will be crucial."
Clinton and Giuliani, Malbin adds, will have to expand their bases and generate more excitement in their campaigns if they want to foster more small giving.