Monthly Archives: November 2008

A Third Perspective on Obama and Small Donors

Earlier this week, the Campaign Finance Institute issued a report, “Reality Check: Obama Received About the Same Percentage from Small Donors in 2008 as Bush in 2004; Obama Also Raised 80% More from Large Donors than Small, Outstripping All Rivals and Predecessors.” The release quotes Michael Malbin as saying “The myth is that money from small donors dominated Barack Obama’s finances….The reality of Obama’s fundraising was impressive, but the reality does not match the myth.”
Bob Bauer responded with a blog post calling the CFI report “strange” and “peculiar:” Bob concludes that “small donors, contra CFI, were the ‘financial engine of the Obama campaign,’ for the reason, not denied by this study, that without them, the record-breaking performance would not have been possible.” He suspects that the reason for CFI’s analysis is a “worry that the reform program will falter on too strong a showing that such a small donor, Internet-driven candidacy can succeed on private funding alone.”
Some of this debate is semantic and depends on categorization. The two divide over whether donors who give more than $200 but less than $1,000 (or donors who give more than $200 in the aggregate through small donations) should still be considered ‘small donors.” Michael’s point seems to be that it is not true that donors giving very small amounts in the aggregate (under $200, who I have termed “micro-donors”) “drove” Obama’s fundraising. Bob thinks Michael’s categorization of small donors is unduly narrow.
There is something more than semantic to this argument. If the Obama campaign demonstrated that one could run a viable presidential campaign fueled principally or primarily by micro-donors, that would be an important milestone for political equality in campaign funding (a point I make in my draft paper). The CFI report acknowledges that Obama raised so much money overall in so many categories (from micro-donors to bundled contributions, mostly at the maximum of $2,300 per person) that it is hard to draw firm conclusions generally. Importantly, we cannot use the Obama campaign to draw conclusions about the viability of a solely (or mostly) micro-donor funded campaign.
Yet despite the fact that the percentage of micro-donors is comparable across other recent primary campaigns (Obama 26%, McCain 21%; Clinton 16%; Kerry 20%; Bush 25%), the overall amount of money raised by Obama from micro-donors is impressive: $117.7 million. Bush (2004 primary) comes in second with $64 million. Obama’s campaign doesn’t prove that micro-donors can be the primary funders for a presidential campaign, but it sure suggests it is possible.
The numbers are also useful in seeing how campaign fundraising techniques are additive rather than substitutionary. Obama did not choose to replace bundling with Internet-based small fundraising; he aggressively pursued both.
Finally, one of the great lessons of the Obama campaign is the frequency of “repeater” donors, especially at the lower end giving over the Internet. According to the CFI report, over 200,000 Obama donors started off giving contributions of $200 or less and then crossed the reporting threshold by giving more. CFI: “About 93,000 of these repeaters gave in cumulative amounts of no more than $400 for the full primary season. Another 106,000 repeaters ended up between $401 and $999.” So some of what must be studied now is not why these donors gave, but why they gave repeatedly. How much was due to enthusiasm for the candidate, how much to the long campaign, and how much to the lower transaction costs of repeat giving over the Internet with saved account information?
There’s plenty to chew on here, and people will be studying the Obama fundraising phenomenon for some time. I am personally grateful to CFI for making these data public and allowing us to draw our own conclusions about the normative implications of the 2008 election.

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Bauer Piles On

In this post, I criticized the FEC for issuing an “Advisory” Opinion that offers no advice: the FEC just could not agree on whether the second of two ads under discussion was entitled to an exemption from certain campaign finance rules on constitutional grounds. Bob adds the following salient point which I was remiss in not making: ” This decision is without a doubt remarkable, in part for the reason that Hasen notes. Not to be overlooked is another reason: for neither this ad, nor for another it ruled on, does the Commission offer any explanation for its conclusion.”
The FEC must do better, even if it means that commissioners issue their own separate explanations as to the basis for their votes.

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FEC Cannot Give Advice on Anti-Obama Ad

See this advisory opinion. The FEC could not decide if an ad that contains no words of express advocacy, but that says “Barack Obama, a candidate whose word you can’t believe in,” constitutes an electioneering communication that cannot be paid for with corporate treasury funds. Truly the law is now beyond incoherent.
Apparently CQ Politics reads the AO differently, stating that “The commission ruled that the version of the ad containing that language crossed the line by advocating the election or defeat of a candidate, which is not allowed by federal law governing issue ads.” Perhaps they, or I, am working on the wrong version of the AO?

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Minnesota Senate Race Update

The Star Tribune offers Board Denies Franken’s Request on Rejected Absentee Ballots. The Hill offers Franken Won’t Appeal Absentee Ballot Decision. The Minnesota Independent offers Screw U: University students turned away from polls on Election Day and Somali Leader: Franken Vote Influencing May Have Occurred 500 Times. And John Fund has written The Battle for Minnesota is Just Getting Started for the Wall Street Journal.

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“State court to decide ballot fight”

The Columbus Dispatch offers this report, which begins: “An appeals court ruled yesterday that a federal judge erred in determining that Franklin County’s disputed provisional ballots can be counted. The 6th U.S. Circuit Court of Appeals ruled that the issue involves state law — not federal — and it sent the case back to the Ohio Supreme Court, where it started. The unanimous ruling was made by Judges Jeffrey S. Sutton, Cornelia G. Kennedy and David W. McKeague.”

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