Democrats Building Lead in Fundraising

The Wall Street Journal published an article yesterday that validated something we’ve been predicting would happen for a number of months now. According to their research, Democratic campaign in aggregate are now enjoying a $100 million advantage in fundraising.

With more than a year to go before the 2008 elections, Democratic
candidates have raised $100 million more in campaign contributions than
Republicans, putting them on track to win the money race for the White
House and Congress for the first time since the government began
detailed accounting of campaign fund raising three decades ago.

The total raised to date is quite astounding, with the leading financial contenders for president on the Democratic side raising more funds already than all of the Democratic primary candidates did combined for the totality of the race in 2003-2004. Not only could 2008 be a billion dollar election but quite possibly double or triple that. But where will all that increase in funds come from?

If their fund-raising advantage continues — so far, Democrats have
been pulling in about 58% of overall donations to federal-office
seekers — they will have more resources for pricey advertising,
organization building and voter outreach next November to buttress
their edge in the polls. Moreover, Democrats’ focus on small donors
leaves them room to raise more cash over the next year, since many
contributors have yet to hit the legal limit of $2,300 per candidate
per election, and could potentially keep giving.

While this cycle will see more donors that give the maximum allowed to federal campaigns, we are seeing an explosion of new donors buying into the political process at smaller levels- each with the capacity to give more throughout the cycle. During the last fundraising quarter, we reported that the average contribution size to all candidates through ActBlue was right at $100 and that the median size was $45. We’ll see those lower end donors continue to give through the cycle. The WSJ highlights this very point with their own research.

Only half of Mr. Obama’s donors have hit the giving
limit for the primaries; about a quarter have given him less than $200,
according to the Center for Responsive Politics, a nonpartisan group
that analyzes campaign contributions.

By contrast, about two-thirds of those contributing to
the campaign of former New York Mayor Rudy Giuliani have already hit
their maximum; just 8% have given less than $200.

For comparison, I ran the numbers for a sample of about 40 major federal campaigns that used ActBlue to collect their online contributions in Q2 and found that on average, 22% of the funds raise in the quarter were online contributions. In a couple of cases the online percentage went over 50%.

Another important point is the increasing percentage of online giving as a share of campaign fundraising.

Democrats have also benefited because of their
comparative strength with Internet activists. While Republican voters
tend to gravitate toward traditional media like talk radio, Democratic
voters with strong opinions are more likely to go online to read blogs.
That, in turn, has led to an explosion in online giving to Democrats,
who are building lists of thousands of small-dollar donors for a
fraction of the cost of traditional direct mail.

Many Democrats give by clicking links to candidates on
the Web site ActBlue, a clearinghouse for small donors. ActBlue has
raised $5.6 million for Democratic House, Senate and presidential
candidates, according to PoliticalMoneyLine, a Web site that tracks
donations. It was the single biggest source of contributions to the
party’s presidential candidates during the first six months of the
year, according to the Center for Responsive Politics. In a report last
week, the center said ActBlue donors gave more in aggregate than the
total from employees of heavy corporate contributors like Goldman Sachs Group Inc.

ActBlue Earns You Media

On of the things we’ve noticed for some time is that ActBlue helps campaign earn free media attention. While we keep tabs on our own coverage (you’ve probably seen me pop up in the comments of any blog post concerning ActBlue fairly quickly), what we love even more is to see candidates using ActBlue make the news.

I’ve pointed this out before in a blog post where Democratic candidates Martin Heinrich and Steve Novick received coverage because of their public fundraising numbers on ActBlue. This week we’ve seen Carlos Del Toro, a state assembly candidate in Virgina receive some free press in a local paper in the district he’s running in. We’ve also seen Presidential candidates earn media. For instance, ActBlue was pointed out as the reason for this front section story in the New York Times about presidential fundraising.

Political beat reporters are hungry to have a reason to write. As a former journalist and state-level blogger myself, the public fundraising numbers that are provided by ActBlue are a great hook. This is great for local stories about elections that may not otherwise be generating much news. While politics is more than just about money, smart campaigns can leverage this fact to their advantage. In an environment where earned media is an important component of modern campaigns, the public nature of ActBlue can be a natural ally. Feel free to make use of it!

ActBlue Featured in Fast Company

This spotlight of ActBlue Co-Founder Matt DeBergalis in Fast Company Magazine speaks to the concept of community in Democratic fundraising that ActBlue is all about. Here’s the piece from their latest issue.

"Thirty years ago, Republicans began to invest
heavily in lasting institutional assets—they built news institutions,
think tanks, talk radio, and a direct-mail strategy that’s grown to
become a monster at raising money. All of these things were deliberate
choices. The Democrats didn’t do this. The Republicans don’t need to
innovate quite as badly as we’ve had to because they had all of this.

We felt there were better ways to organize groups of people and get
them to take action, rather than do all top-down organizing the way a
campaign typically does. So we use existing social relationships,
whether they are coworkers or friends asking each other to donate, or
communities built around email lists or blogs. We don’t comment on the
fund-raising numbers of the campaigns who use our site, but when
Edwards announced that his wife’s cancer had unfortunately come back,
news reports said donations on ActBlue increased $100,000 in the five
hours after the press conference. This approach actually works better
for the Democratic Party than the Republicans. It just seems to fit
more with how we communicate and talk and participate."

This Week with Edwards

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I wanted to point out an interesting graphic posted to the right produced by the Washington Post (which you can click on to enlarge). From their story

In the past five days, the campaign received more than 5,000 donations
totaling half a million dollars — about 50 percent of the total it
raised online in the previous three months, according to postings on
ActBlue.com, the Web site that tracks Edwards’s Internet fundraising.

Online Activity Increasing in 2008

We’ve noticed this in the last two months based upon the level of fundraising we’ve processed in what traditionally are some of the quietest in political fundraising- 2008 is not going to be any normal election.

In two pieces this weekend, the effects of the Presidential race have been pointed out in the changing strategies not only with fundraising but online engagement on the part of campaigns.

From the Wall Street Journal

[Chart]But the Web is about buzz as much as it is a tool. An
ability to convey early online success of some kind has an importance
all its own. With at least 13 candidates actively in the running so
far, and the New Hampshire primary still 10 months away, it is a way
for campaigns now to show concrete momentum and garner crucial early
attention.

"You had the money primary. The endorsement primary.
Now, you have a Web 2.0 primary going on concurrently with the
traditional money and consultant chase and stuff like that," says
Howard Mortman, a former MSNBC producer, blogger and now head of the
public-affairs practice at New Media Strategies, an Arlington, Va.,
Internet market-research firm.

  Still, the amount of money and attention being spent
by the campaigns on their sites this year is significant, Mr. Noble
says. Greater emphasis by campaigns on the Internet "is recognition
that the game is radically changing … It’s the Moore’s Law in
politics. Every two years it all doubles or more but this year, it’s
more than doubled."

And from Matt Stoller at MyDD

We’ll see what happens when the candidates report their Q1 numbers.
Despite a largely undistinguished set of internet campaigns, I’m going
to guess that online donations have exploded.  Hillary Clinton, the
most conservative of the Democratic candidates, is getting lots online.
Barack Obama and John Edwards, positioned slightly to the left, are
probably getting in huge quantities of online small dollar cash as
well. 

I know a fair number of online fundraising experts, and they all say
that transparency in fundraising is a really powerful tool.  Say how
much you want to raise, say why you want to raise it, ask for it, and
show how much you’ve raised so far.  Rinse, repeat.  None of the
candidates are doing this.  Clinton has come the closest with her
million dollars in a week, and Edwards did well with Coulter Cash (he
blew through the $100K target but didn’t announce it for some reason).

That these campaigns are not working their online fundraising
channels as well as they will later in the season, even as they bring
in massive numbers of small dollar donors, suggests that a new and
dramatically expanded hunger for a way to participate in politics is
real.  We could see between 5-10 million donors in the political system
this cycle, which is around 1-3% of the country’s population.  That’s
huge.  Americans are paying attention, and an increasingly
large number are getting involved.  If that translates, like it did in
2004, to a post-Presidential election involvement in local politics,
we’re looking at a political system with different levers of power.

Online Fundraising in the News

Apparently Online Fundraising is becoming a hot topic when talking about the 2008 Presidential race- not that we can blame anyone!  It’s something we’ve believed from back before the 2004 elections and see as being one of the defining characteristics of this next election cycle. While physical contributions from folks writing checks or passing the hat at fundraising dinners are not going to disappear, the amount of money and the bond that candidates have with their donors is changing big time. With a Presidential contest that could exceed $1 billon, we’re aware that online donations scale more easily than whipping up a couple thousand more plates of roast beef!

This weekend the topic of online contributions highlighted two major articles, one of which from the LA Times focused in on our efforts here at ActBlue directly. While I’m posting some clips below, be sure to click through and read the rest of these articles.

Keep reading →