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Counting Heads, Not Dollars: A New Campaign Finance Context

Ever since the Campaign Finance Institute (CFI) first published an analysis of the Obama small donor numbers several weeks ago, the ink has been flowing…

  • Laura MacCleery
December 19, 2008

Cross-posted from techPresident.

Ever since the Campaign Finance Institute (CFI) first published an analysis of the Obama small donor numbers several weeks ago, the ink has been flowing. CFI’s central claims—that small donor influence on Obama’s fundraising is a “myth” and that the percentage of small donations in Obama’s cash haul (26%) does not differ from Bush’s 2004 numbers (25%)—made a big splash. Besides the New York Times, MyDD and The Politico, Bob Bauer, Obama’s election law attorney, Rick Hasen, a law professor, and Brad Smith, a campaign finance opponent, all weighed in. On the heels of the flap, Michael Malbin, the study’s author, defended his conclusions as based on established categories in campaign finance analysis.

Much of the discussion in the campaign finance community centered on whether it is fair, in a long election season, to characterize the mid-range donors who gave multiple gifts that put them over the $200 mark (whom CFI calls “repeaters”) as something other than a “small” donor. Malbin’s defense of CFI’s line-drawing centers around the indisputable fact that $200 is the reporting threshold for donors under federal law.

But whatever the nomenclature, this complaint with CFI’s act of unmasking misses the forest for the trees. We may just be counting the wrong things altogether.

When it comes to small donations, analyzing them as a percentage of the overall funds as CFI does is tricky—the smaller an average donation is, the smaller its impact will be on the amount of money collected. Imagine a room with 20 donors: 19 give $100, while 1 person hands over $2000. Of the $3900 collected, over 50% of the money is from the one large donor in the room. If the 19 give an average of $60 while the wealthy donor remains at $2000, the small donors’ share of the overall pie shrinks even further—to just over one-third of the total. This mode of analysis de-emphasizes the “long tail” in the donor distribution curve—although that aspect of the Obama effort was one of the most interesting developments in this election cycle.

Indeed, the Obama campaign’s small donor numbers are remarkable due to the sheer scale of the response his campaign received, judged both by the absolute numbers and by the multitudes of new “small” or “smallish” donors those numbers represent. Gathering 26% of $452 million yielded an astonishing $117 million—or nearly double Bush’s 2004 total of $64 million from $200-or-below donors.

As any unlucky soul who’s tried to do direct mail or online fundraising knows, it is orders of magnitude more difficult to recruit new donors than to tap existing ones. Fundraisers typically have to spend millions to make millions—and yet the Obama campaign reports that some of its highest fundraising totals occurred during the Republican convention, without any fundraising ask at all. A base of 3.1 million donors—and an email list of upwards of 10 million subscribers—is an enviable political tool for any new President.

A conference at Harvard last week made clear that the Obama folks were also pros at making volunteer work for the campaign a ready substitute or supplement for monetary donations, organizing a well-coordinated on-line and field offensive. The Internet is demonstrating that fundraising is most effective when it relates to real events in real time and complements organizing efforts on the ground by providing supporters with many ways to connect to a campaign.

Instead of counting dollars, the new paradigm invites us to count heads—and to ask what else voters can do to be part of a campaign. Using sophisticated interactive Web-based technologies, it is now possible to ask volunteers, sitting in the comfort of their living rooms, to call potential voters in other states and to log the results of those calls for use by get-out-the-vote teams on the ground on Election Day. The Web facilitated more human-to-human outreach, not less, because the campaign allowed the engine to go. Peer-to-peer communication replaced top-down talking points, and it was more effective, efficient and energizing than any campaign effort in modern times.

Clay Shirky observed in his excellent recent book, Here Comes Everybody, that sometimes a difference in numbers becomes a difference in kind, producing value that is far greater than the sum of its parts, and requiring new structures, rules and systems to channel these efforts. Small donors were a part of the strategy—but they mainly gave—and mattered—because the campaign was open to all kinds of collaborations with supporters, and did not treat them like an ATM.

Obama’s campaign certainly had unique assets, starting with the candidate himself, yet its success points to a more universal lesson that integrating fundraising into an overall strategy for voter engagement is becoming a necessary component of effective campaigns. Even further down the ballot, the Netroots support for members of Congress this cycle on sites like ActBlue and DailyKos produced substantial additional funds from smaller donors across the country due to the targeted platforms these new, low-cost communication tools provide.

Despite a disappointing litigation assault on campaign finance rules that limit soft money, Republicans are acknowledging that Web strategies, and an embrace of technological organizing tools, is the most important new political horizon. “It would be suicide for the Republican Party and conservatives to not aggressively embrace technology,” Matt Lewis, of the conservative Web site, told this week.

While the “long tail” doesn’t wag the dog yet, it could. Yes, the influence of large donors remains troubling, but the way forward on campaign finance is to understand all of the lessons of this election cycle. Reforms that supercharge smaller donations and require that politicians work with the grassroots—as the new models of public financing do—will democratize campaigns and make politicians more accountable to the many—voters, volunteers and donors—than they are to the wealthy few. Public funding systems in Maine, Arizona and Connecticut have been structured to put small donors first, and, as Janet Napolitano, a successful gubernatorial participant in Arizona’s system, told us last spring, they are tremendously successful in changing the way that participating candidates relate to their constituents.

The campaign finance agenda also needs to be understood as a key part of a new general approach to campaigns—and now, perhaps, to governing—that creates a new partner in the grassroots through openness and accountability, energizing voters and citizens in a democracy that remains empowered long past Election Day.