Tuesday, July 14, 2009

How Political Fundraising Has and Will Continue to Change

Part 4 of our 10-part series: “21st Century Campaigning”

The internet has changed much of the way we work, retrieve information, and live our daily lives. In politics, the internet has changed the game in ways of transparency, public forum, and campaign outreach. In time, it may even be where we go to vote.

So far, however, the internet has had its greatest impact on one aspect of political campaigns in particular: fundraising.

Around the year 2000, candidates began maintaining websites regularly. By 2002, it was estimated that over half of Americans had internet access in their homes. And in 2004, the internet made its first big dent in American politics - it turned an unknown former governor from the tiny state of Vermont into a household name and political giant.

Howard Dean revolutionized the way campaigns were done - for both Democrats and Republicans - with his bid in the 2004 presidential race. In about a year he built a national network of activists and, with them, raised an astounding amount of money (tens of millions of dollars) from thousands of modest contributions.

Today the most important page of a campaign website is the “Contribution” section. The reason is simple: the average voter doesn’t go to a candidate’s website to make their decision (although many pundits and analysts suggest that’s beginning to change) but the average donor will contribute online.


And the typical campaign website won’t open with a candidate introduction or positions on the issues - it opens with a screen inviting the reader to sign up for email updates. Those email updates will occasionally be used to inform voters of upcoming events or the candidate’s positions, but the vast majority of the time they will be soliciting contributions - a move right out of the Dean playbook.


It also allows for campaigns to re-solicit from prior contributors - (usually) the most likely group of people to give again. In December we noted that even the Obama transition team used the campaign email list to get donations for the Inaugural celebrations.

Obama actually took the progress Dean had made one step further - he raised so much from small donations that he didn’t need to rely on lobbyists, PACs, or public financing. Sen. McCain’s presidential campaign account received only 54% of it cash from individual donors, compared to a whopping 88% of Obama’s campaign finances. And with online fundraising, they raised amounts that were previously unimaginable - more than $1 billion between them.

The result: public financing of presidential elections is bound to fade away. It may have even seen its last days in 2008, barring any new reform from Congress.

Many think it is unfortunate that public financing may (for all practical purposes) go extinct, but only time can tell. In January, Sherwin Hughes made quite an analogy between Obama’s fundraising mastery and a poker game:

“I liken right-wing conservative donors to gamblers. These poker players, drunk on their own hubris and wealth, are sitting down to a game of presidential stud, hold 'em or betting on horses at the track. The max buy-in is a cool $2,300…

…Those hands would ultimately be trumped. Millions of ordinary people sat down at that high stakes presidential poker game. The same people who haven't been invited to play for the last 8 years, and arguably the last 200, seated themselves with confidence at this exclusive backroom game. They pooled their $5 and $10 chips, raised, re-raised and splashed the pot. The cards were dealt face up and revealed a beautiful royal flush which consisted of the face cards of disenfranchised Americans, war veterans, and jobless individuals.”

Again, another implication of the internet in politics is the greater extent of transparency. Not only are campaign finance reports readily available at the Federal Election Commission’s online database, but OpenSecrets.org and similar websites as well.

Candidates may be less likely to raise money from special interests with these resources available to voters. Obama himself refused to accept contributions from lobbyists, and has pushed the Democratic Party to adapt the same principle.

Nobody likes how expensive campaigns are becoming, but it all comes down to the internet - it’s fundamentally changed the way political campaigns raise money. In the end, it might even make campaign finance better.

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