By now, a certain mythology has grown surrounding the Obama fund raising during this cycle. Central to this is the idea that his campaign is more people powered than any yet conducted. There are several measures for this, one is sheer number of individual donors. This important measure shows the depth of passion in each candidate’s supporters. For Obama that number at last report coming into April was 1.3 million donors. In terms of sheer number of donors, Obama’s campaign is the most people powered campaign in history. I feel it is important though to give as complete a picture of Obama’s fund raising as I can.
A complete picture of who donates to Obama includes exactly who these donors are. Most of them are 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. 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. Donors who have maxed out for the primaries have given 46,122,367, 20% of total individual contributions.
Needless to say this is a great deal of money. Similarly, Sen. Clinton has raised a great deal of money. Sen. Clinton has raised 194,807,441. Of that 171,679,839 is available for the primary. Her total is 74% of Sen. Obama’s total primary funds. She has raised 148,443,743 in individual contributions. In terms of small donors giving less than $200 Sen. Clinton has raised 44,105,915 which is 30% of her individual donations. A greater percentage of her donations have come from maxed out donors. From these donors she has raised 51,036,688 totaling 34%. For the full breakdown check out the chart below.
Full Chart of donations for all candidates:
http://farm4.static.flickr.com/...
Breakdown of donations by category.
Comparing the two campaigns and how they raise money can tell us just how accurate the picture of Obama’s people funded campaign is. The best way to compare who is more people powered is the percentage breakdowns for funding. This allows us to see where the campaigns have been most effective and most reliant. Sen. Obama has raised 45% of his money from those giving $200 or less compared to 30% for Sen. Clinton. The discrepancy is more than likely dependent on two things, real grass roots support among Sen. Obama’s base and the effectiveness of the internet as a fund raising tool. The amount of money raised by Sen. Obama in these low dollar values would be 68% of Sen. Clinton’s entire individual donations. Compared to other major candidates the low donor percentage of Sen. Obama is matched only by Fred Thompson who also had a 45% small donor rate.
I think the most telling of the numbers is how the low donor rate and high donor rate matches up. You would assume that a people powered campaign consisting of regular folks and not fat cats would have a higher low donor rate than maxed out donor rate. This holds true for Senator Obama who has raised money from the small donors at over twice the percentage of maxed out donors. Sen. Clinton in comparison has raised more money from maxed out donors than she has from those giving under $200, 51 million to 44 million. This ratio gives a clue why Senator Clinton is tapped out.
The New York Times article also gives some insight into why the Clinton Campaign is having money trouble. Consider these quotes
"The question we, as fund-raisers, are having to address is, ‘How do you continue the self-renewal when you are 14 or 15 months into a process and you have in many respects tapped your network dry?’ " Mr. Nemazee said.
He recommends branching out to new geographic areas. "If you stay just focused on your geographic area, it’s very, very difficult to continuously find new people to expand your network," he said.
There is a clear reliance on intermediaries that use personal relationships to extract money from donors. This system has the advantage of tapping into the high value people but that pool is not that large and can be tapped out. The effectiveness is also reduced because the cap on donations is low in comparison to what these people could give if there was no cap. The internet cuts out the intermediary and allows a candidate’s supporters to give money whenever they feel like it without prompting. There is also less time spent directly earning those donations with contact or events. The diversion of resources to these fund raising events also means that you must require those who want to get in to meet a higher threshold. That is apparent here
But this time, she said, she did not ask for people to bundle contributions of $10,000, $25,000 or $50,000 at a time, as she had done in the past. Instead, she invited a broader circle of people who were asked to cobble together amounts like $3,000 or $5,000. She also opened the event to children, which resulted in mothers bringing their daughters. The event grossed $250,000, she said.
This picture is incomplete though. In 2007 Clinton disclosed her group of 311 ‘Hillraisers" who raised a minimum of $100,000. Others said they would raise more than a million. At the very least, this group is responsible for 26 percent of her 2007 total of 118,301,659 . Combine 26% min with the fact that a full 50% of her 2007 contributions were from maxed out donors and you get a good picture of how Clinton raised money and why she is in trouble now that these bundlers are coming up dry.
This is not to say that Sen. Obama does not use these "bundlers" to raise money because he does. 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 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. So that means that at least 30% of Obama’s money was raised through bundling and it could have been more. The biggest difference though is that Obama has been supplementing and increasing his online small donor totals.
The importance of internet fund raising has grown as the campaign has gone along. Correspondingly, the percentage of donations that come from maxed out donors is decreasing. The idea that Sen. Obama or Sen. Clinton is people powered is growing more accurate as the process goes on. If we look at the funds raised before voting actually began the discrepancies and differences in the campaigns is obvious.
Here is the chart that breaks down the funds through 1-1-2008.
http://flickr.com/...
Obama started with a baseline of 32% of individual donations below $200. Clinton started the year at 14% of donations under $200 a figure higher than only Romney and Giuliani by percentage among candidates for either the GOP or Democratic nomination. In January as voting commenced and excitement rose the proportion of donations $200 or less rose to 46% for Obama and 35% for Clinton. The percentage of total individual donations for the campaign was improved to 36% for Obama and 17% for Clinton. In February the total proportion of individual donations rose yet again. For Obama, the percentage of his donations for the month of February under $200 was 56%. Clinton also saw another dramatic increase in her small donor percentage to 52%. March saw the percentage of donations rise to even higher levels 60% for Obama and 58% for Clinton.
The lesson from this is clear. As the campaign advanced the maxed out donors became less and less of a factor. It is important to note though that in bulk number terms Sen. Clinton has fallen far behind Sen. Obama. Even as the percentage of small donors seems to have converged for each of them Sen. Obama is still raking in more money.
So far, I have only been taking where money is coming from into account. That is not giving the complete financial picture though. The debt level for each candidate is also important when looking at how each candidate has financed his or her campaign. Obama has maintained a consistently low level of debt at or below 1 million. Clinton on the other hand has been running up a greater and greater debt. Her position is actually much weaker than her intake would lead one to suggest. Clinton begins 5 million in debt after 2007. The debt increases to 7 million in January then escalated to 13.7 and then 15.3 after Clinton loaned herself 5 million in February without repaying herself back.
My final take on the Obama versus Clinton fund raising is that while the idea that Obama’s campaign is totally powered by individual small donations is somewhat misleading it has become more and more accurate over time. Certainly it is better than previous campaigns. The Obama campaign has always been better at attracting small dollar donations than Clinton though at this point the Clinton campaign is powered by the same small dollar donors. Her campaign has undergone the greatest change in financing changing from an almost totally bundler driven campaign to much more people powered. Still, Obama has owned Clinton in fund raising. My next look is Obama versus McCain.
News Articles Cited
http://www.washingtonpost.com/...
http://www.usatoday.com/...
http://www.nytimes.com/...
Numbers and Charts from CFI
http://www.cfinst.org/
