In fund raising. I recently did a comparison of Sen. Obama and Sen. Clinton’s fund raising. They have both built fund raising machines that now rely on the low dollar donors to fund their campaigns. Now I want to examine the different course taken by Sen. McCain. The state of his fund raising has been somewhat less impressive when compared to the Democratic side. His distribution of donations is similar to past campaigns and reveals little in the way of a major internet donor push. When compared to the machine of Senator Obama it does not look positive for McCain. In machine comparison, Obama is the $6bn underground particle accelerator and McCain is a button maker.
Ok that comparison might have been a little bit of hyperbole. First some notes. When dealing with Sen. McCain and the money he has raised it is important to note that there is a dispute as to whether he has accepted public financing for the primary. For the purposes of comparing him to Sen. Obama, I will ignore this aspect of his funds. I am confident though that any money he raises may be used for the general election. In addition, the normal donor restrictions will still apply. The issue is over whether he can spend this money before the convention.
Another aspect of his fund raising is his new hybrid money raising campaign scheme. His plan allows up to $70,000 in individual contributions by channeling the money into different McCain-centric funds. The first $2,300 of that would go to McCain's primary campaign. The Republican National Committee would receive $28,500 of the donation. The remaining funds would be divided equally, up to $10,000 apiece, among four states the campaign has designated as battlegrounds for November: Wisconsin, Minnesota, Colorado and New Mexico.
Through March, John McCain has raised a total of $81,858,084 of this $78,728,916 is available for the primary. $70,794,974 is in individual donations. Sen. McCain collected 16,325,267 in donations under $200 equating to 23% of his individual donations. McCain collected 27,951,957 from donors maxed out in at least the primary. The maxed out donations accounted for 39% of his individual donations. McCain’s fund raising was concentrated in values above $1,000. 63% of his donations came in values greater than $1000. These statistics provide a striking contrast to Sen. Obama.
Most Obama donors regular citizens taken by Obama’s message who give small amounts less than the 200 dollar level. However many have given the maximum amount of 2,300. Through March 2008, Obama has managed to raise $240,175,070, almost three times as much as McCain. Of that total 231,948,750 is for primary use. 225,597,295 has been raised through individual donations. The highly publicized donations from those giving $200 or less amount to 101,146,213or 45% of Obama’s total money raised and more than the entirety of McCain's donations. Donors who have maxed out for the primaries have given 46,122,367, 20% of total individual contributions. Unlike McCain, the majority of his donations are not made in values greater than $1,000. Obama has raised 83,035,048 or 37% of his individual donations in values greater than $1,000.
Here is the graphic breakdown showing the different concentrations.
As the primary process has progressed John McCain is actually taking in a lower percentage of donations below $200. That percentage has decreased from the baseline of 25% from 2007 to 24% in January, 20% in February, and 18% in March. This is the opposite trend of what you see for Sen. Obama. Sen. Obama started with a baseline of 32% of individual donations below $200. In the first three months of 2008, Obama saw his percentage of donations under $200 rise to 46% then 56% and finally 60%. The trend lines are very striking.
What was happening for McCain is that he is showing some low growth in the absolute value of his $200- donations. He raised a combined $2 million in October and December of 2007 then to $2.6 mill for January and back down to $2 mill in February and then escalating to $2.6 in March. What is clear is that McCain is not seeing anywhere near the grassroots fundraising or support of Barack Obama. McCain is clearly not reaping the reward of the internet or apparently even interested in small donors. He has been able to campaign and raise funds and yet he is not seeing any real great growth. The April numbers will be important in assessing how well McCain is advancing at the small donor level.
McCain is not seeing any substantial small donor growth. He is seeing major growth in his $2300+ donations. McCain took in only $1,402,800 for October and December combined. This number jumped to $4,020,775 or 36% of his January total. It increased again in February, climbing to $4,905,200 or 47% of total. In March McCain saw his maxed out donor total jump all the way up to $7,745,565 becoming 52% of his individual donations for that month. McCain’s machine is relying far less on small donors. More and more on large donors are becoming the backbone of his money raising. This would not be such a problem for him except he is not stockpiling this money. McCain is still has a burn rate of 85%.
In fact as the campaign has progressed McCain's $2300 is similar to Obama's $200- trend.
Where is McCain finding this money? Well he is relying on bundlers, lots and lots of bundlers. Many of these bundlers are lobbyists. I know many of you will be shocked to learn that John McCain is relying on lobbyists, many from the industries he is in charge of overseeing, to be elected. Unlike Obama McCain needs these people as his fundraising numbers show. The NYT has done several recent pieces on just how needed these people are. For example
Kirk Blalock, of the lobbying firm Fierce, Isakowitz & Blalock, leads Mr. McCain’s young professional group and has raised over $250,000 for him; his clients include Sprint Nextel and Viacom.
Kyle McSlarrow, chief of the National Cable and Telecommunications Association, the lobbying arm for the cable industry, has raised over $100,000 for Mr. McCain. He and others in the cable industry recently butted heads with Mr. McCain over a proposal that would allow customers to pick and choose which channels they received.
According to the Times McCain has raised a minimum of 15.55 million from his bundlers. A minimum of 8,250,000 has come from 33 bundlers who have raised greater than 250,000 and 7.3 from those who have raised over $100,000. According to whitehouseforsale.org McCain has 506 bundlers. 66 of these are lobbyists. These people own the McCain campaign. Remember that he has raised only 78 million dollars for the primary. I do not see how a person bundles over $250,000 from small donations. These donation levels are possible over the internet but the personal relationships needed to get this level of money in small pieces just seems too cumbersome. It is just not an efficient system.What type of person raises that type of money for McCain? This type of guy from a second NYT article...
A longtime political patron, Mr. Diamond is one of the elite fund-raisers Mr. McCain’s current presidential campaign calls Innovators, having raised more than $250,000 so far. At home, Mr. Diamond is sometimes referred to as "The Donald," Arizona’s answer to Donald Trump — an outsized personality who invites public officials aboard his flotilla of yachts (the Ace, King, Jack and Queen of Diamonds), specializes in deals with the government, and unabashedly solicits support for his business interests from the recipients of his campaign contributions.
These people do not seem to leave empty handed, at least Mr. Diamond did not...
In California, the McCain aide’s assistance with the Army helped Mr. Diamond complete a purchase in 1999 that he soon turned over for a $20 million profit. And Mr. McCain’s letter of recommendation reinforced Mr. Diamond’s selling point about his McCain connections as he pursued — and won in 2005 — a potentially much more lucrative deal to develop a resort hotel and luxury housing.
In Arizona, Mr. McCain has helped Mr. Diamond with matters as small as forwarding a complaint in a regulatory skirmish over the endangered pygmy owl, and as large as introducing legislation remapping public lands. In 1991 and 1994, Mr. McCain sponsored two laws sought by Mr. Diamond that resulted in providing him millions of dollars and thousands of acres in exchange for adding some of his properties to national parks. The Arizona senator co-sponsored a third similar bill now before the Senate.
A spokeswoman for Mr. McCain, Jill Hazelbaker, said the senator, now the presumptive Republican presidential nominee, "had done nothing for Mr. Diamond that he would not do for any other Arizona citizen."
A minimum of 19% of his money has come from these 106 bundlers McCain has established minimum amounts for. Think on what Mr. Diamond got from McCain and you see the problem here. How much has been raised by the other 400? We have no idea how much money they are bringing in but they must be averaging less than $100,000 each to miss qualifying for special status.
This does not mean that Obama is without bundlers either. The importance of these people seems to be much more limited. The WaPo wrote an article about those who bundle for the Obama campaign and U.S.A. Today also wrote on some of those money raisers. According to WaPo, at least $15,800,000 of Obama’s donations have come from bundlers. That amounts to 6.8% of his total individual contributions assuming all of that is primary only. The lobbyists that USA Today tries to tie to Obama reportedly contributed 3.5 million.
This gives you just how poor a job the tm does at digging into fund raising. According to the Campaign Finance Institute for the year, 2007 Obama disclosed 328 bundlers. How important were these people to getting the Obama candidacy going? Very, though not as important as they were to Clinton. According to the Obama campaign
• 179 have raised $50,000-$100,000;
• 71 have raised $100,000-$200,000; and
• 78 have raised over $200,000.
These numbers lead to the conclusion that at least $32 million of Sen. Obama’s 2007 funds came from these bundlers. Obama raised a total of $103,802,537 in 2007. So that means that at least 30% of Obama’s money was raised through bundling and it could have been more. The overall percentage of his money per bundler is lower than McCain. He has raised far more money with fewer bundlers. The biggest difference in potential influence of bundlers is that Obama has been supplementing and increasing his online small donor totals to compensate for the bundlers and that he has more integrity than McCain.
Even with his bundlers McCain has not raised anywhere near the amount of money Sen. Obama has. Unfortunately, for Democrats Sen. Obama has spent a great deal of his money against Sen. Clinton. The added excitement on the Democratic side of a protracted battle has probably helped their fund raising numbers but it has taken a toll on the cash reserves at the same time. Luckily, as I pointed out McCain is still burning money. McCain has only 11,579,714 on hand at this point. Obama still has 42,847,680 and has a lower burn rate than McCain even though McCain does not appear to be campaigning or advertising as much as Obama.
My final analysis is that McCain just cannot raise money. Clinton is destroying him too and the combined Democratic totals makes him look more like an also ran than a major candidate. We know that money does not mean you will automatically win. However, the money deficit prevents McCain from expanding his target battleground states. Obama’s large money advantage allows him to target more areas because he can afford to. This side to the money race is not talked about in the decision between Obama and Clinton. Her debts prevent her from considering the electoral map extension Obama can consider. McCain will also have to divert his resources to defense in more states stretching him even thinner. This makes his hybrid financing system important because the funneling effect might help cover some battle ground states. In addition, it allows his narrow bundler base to be more effective raising more money from the same few people.
News Paper cites
http://www.nytimes.com/...
http://www.nytimes.com/...
http://www.washingtonpost.com/...
http://www.usatoday.com/...
Campaign Finance websites
Opensecrets.org
Whitehouseforsale.org
Cfinst.org