Much of the campaign establishment and many journalists covering elections have come to conflate fundraising success with electoral prospects. There is certainly a correlation between fundraising and electoral success, but there are many (and some quite spectacular) counter-examples in recent elections. The campaign industry (on which candidates rely to shape their campaign strategies) is not very incentivized to de-emphasize this aspect of campaigning, because it so directly relates to the industry’s own bottom-line.
Crowd-funding platforms offer meaningful potential for securing a significant number of small-scale contributions, if a candidate can drive her own media coverage. Currently, however, most candidates, particularly for Congress or down-ballot races, get a much higher ROI (money raised for the time invested) from very targeted asks of ultra-wealthy individuals, particularly if we include money contributed to an affiliated SuperPac. (State laws vary in this area – if there is public financing or matching funds available for example – so the effectiveness of various approaches can differ significantly state to state.)
While sophisticated crowd-funding platforms are now widely accessible, there is one effective feature on Kickstarter and other non-political fundraising platforms – the ability to make commitments conditional upon reaching a certain funding threshold – that has not (to our knowledge) been incorporated into political fundraising platforms.
There are many innovative tools that have emerged in recent years to promote transparency regarding which candidates are receiving support from whom. These efforts face several challenges, however, before they can significantly influence campaign practices:
In addition, there is debate regarding whether small dollar donations should be disclosed as well, with some arguing the public should know how many people from a given company or union gave $200 to a given campaign, and others arguing that disclosure would discourage small dollar contributions.
A principle of effective fundraising is to engage people (get them active in some other way first) and then ask them for money. If more people are participating in a campaign in new ways, they are more likely to contribute.
If people believe that the candidate is not relying on a small number of very large donors, that can increase people’s sense of responsibility and the likelihood of their making a contribution to a candidate they support. In addition, success breeds success in grassroots online fundraising. If it seems like People Power might work, people are likely to jump on the bandwagon. If it looks like a futile exercise, few people want to put their money in a losing effort.
It is important to point out that many small-dollar online campaign contributions tend to come from the more ideologically partisan ends of the spectrum,2 so while this kind of fundraising might lower reliance on certain elites, it could exacerbate partisanship and polarization in the process. As one of our experts said, ““members of Congress often boost their small donor donations by taking brash positions or waging ideological warfare. A worrisome question is whether getting candidates to rely more on small donors might also incentivize more dysfunctional behavior in Congress.”
While the primary application of SuperPacs has been as a vehicle for large donors to influence elections, they also present opportunities to creatively influence campaign practices in other ways. Groups like CounterPac, CrowdPac, and MaydayPac have all tried to alter the incentives and/or outcomes of a race. These approaches risk charges of hypocrisy, and by most accounts have not significantly influenced the incentives or outcomes of a race yet, but with enough resources and the right model, there is potential for greater impact.
One of our domain experts suggested that donors could also play an important role in improving the system, citing the public’s frustration at the lack of transparency on the expense side of the equation. “Fiscally responsible governance starts with fiscally responsible campaigning. Let the donors be the watchdogs.”
Lastly, it is important to recognize how detested fundraising is by candidates and elected officials. Few want to engage in fundraising activities, and “call-time” (in which Congressional Representatives huddle in cubicle phone banks to “dial for dollars”) is one of the most reviled aspects of the job. If there were viable alternative strategies to the status quo that were not so reliant on this kind of fundraising, it is unlikely that the industry that has built up around it would readily embrace them – but the candidates might.
President and Founder, Misschief Media / Former Director of Digital Strategy, Mitt Romney for President
Campaign finance is ripe for disruption as two forces collide: an American public accustomed to crowdfunding that also demands greater transparency into what they buy, and an elite class that increasingly sees little to no return on their massive investments in political activity.
Executive Director, CounterPAC
Not only do I believe there is great potential in the domain of campaign fundraising for catalyzing a shift toward a more People Powered playbook, I think it is this domain in which investment is arguably most critical. Candidates’ constant need for sufficient money to run a winning campaign lies at the heart of the selection, attention, and influence biases that drive our democratic process to privilege the voices of an elite few. Short of a radical change in campaign culture, it seems unlikely that congressional campaigns will become less expensive any time soon — which means, on average, they will continue to cost millions of dollars to run. Similarly, (again, short of a radical change in campaign culture), it seems unlikely that the dominant approach to campaign fundraising (i.e., raise as much money as possible) will change, since historical trends show that the candidate with the most money generally wins and how much money a campaign spends is so commonly regarded as a metric of its competitiveness. We need to shift campaign incentives to reduce (relatively) the return on investment of major donor fundraising as a strategy. Thus far, efforts seeking to do this have mainly focused on positively incentivizing small dollar fundraising behavior among candidates, through classic systems of public financing as well as matching systems. More recent efforts have shifted focus to incentivize small-dollar giving behavior among constituents, through systems that employ mechanisms such as vouchers and tax rebates, and I think these show great promise. I think far too little thought has been given, however, to ways in which non-governmental forces might serve to amplify the public incentive for small-dollar giving. With an electorate as disengaged as ours is, participation needs as much of a kickstart as it can get. How can we leverage the same impulse that gets people to go out and buy a Power Ball ticket to cultivate a more active grassroots donor base? It seems like there is great potential to experiment with how monetary resources might be levied more forcefully to directly incentivize participation in our political system as a small-dollar donor. Of course, it’s also possible to imagine a less directly monetary incentive (e.g., what gets people to show up at Ben & Jerry’s free cone day) or even a non-monetary one (e.g., what gets people to dump a bucket of ice over their head). What’s common throughout this spectrum of possibilities is that it is well within the domain of non-governmental entities to pioneer. And part of what makes this an exciting arena for experimentation is that, in addition to the impact it could have on campaign fundraising behavior, it might also bolster voter engagement more generally, given the relationship that has been observed between political giving and voter turnout.
Executive Director, Lincoln Network
Changing the way that campaigns raise funds is a pillar of campaigning that is long overdue for disruption. I think the reality is, though, that several candidates in recent years have ridden new waves of fundraising in order to disrupt the system. Two at the top of my mind are President Obama and Ron Paul. President Obama’s fundraising and Ron Paul’s fundraising are nothing short of a loyal following connected through emotion over the internet. I think that crowdfunding will be a new element to this, but not a drastic shake up.
CEO, The Workers Lab
Imagining a democracy buoyed by people power and away from money power should be the 21st century project we take on as a country.
Former Director of Data, Obama Campaign / Executive Director, New Organizing Institute
The examples we all herald of efforts that have bucked the system, of individuals who have successfully snatched the brass ring despite a pitched disparity in their access to resources, are only exceptions that prove the rule. Our country is locked inextricably in the grips of a capitalist death-spiral. Any shading applied to this fact, any dressing we put on this naked reality, is nothing more than a lie that we tell ourselves. As for the notion that we can put our finger on the scale, that we might perhaps predict today which emerging “disruptive practices” will alter the landscape of money in politics ten years from now, my suggestion is to look for the most radical possible examples of successful change that has already occurred. The more unpalatable, the better. Chiapas? Anything short of this is as hopelessly impotent as a pea flung at the heavens. Like Chris Burden firing a pistol at a passing jumbo jet, it’s an amusement for George Soros and the Koch brothers as they engineer our futures for us. If you’re not willing to fund millimeter-specific initiatives, fraught with peril, staffed by dangerous radicals, and totally unacceptable by the standards of contemporary philanthropic practice in America, you will accomplish nothing.
Director, Youth Engagement Fund at the Democracy Alliance
Campaigns are so dependent on donors and fundraising. Need capacities and incentives for small donor fundraising. That is the most people powered, game changing solution.
Executive Director, NALEO – National Association of Latino Elected and Appointed Officials
The most underperforming segment of the electorate are Latinos, from being registered to vote, voting, and making political contributions. Money is the milk of politics, and no one knows how to reach the Latino udder.
Fundraising is at the core of why campaigns cater to the wealthy and special interests instead of the population at large. If we can make grassroots fundraising the norm, it’ll be a game changer for popular representation in Washington.
Executive Director, Independent Lines Advocacy / Former Chief of Staff, Congressman Raul Ruiz
Fundraising in the digital age offers massive opportunities for broader sections of the public to wield greater influence in the selection and election of candidates for office at every layer of government. But as technology drives broader sections of the public funding greater portions of campaign budgets, it is critical that we push ourselves to optimize engagement even as we accelerate monetization, driving the quality of the connection between candidates and the public as the quantity of communication skyrockets.
All answers: 1 = strongly disagree / 5 = strongly agree
How much do the conventional tactics for achieving this objective influence how reliant campaigns feel on narrow subsets as opposed to broad cross-sections of the electorate?
How much do you think the tactics for achieving this objective are likely to change in the coming decade?
How much opportunity do you see for advancing more People Powered tactics for achieving this objective via each lever?
Increase People Powered ROI
Decrease Conventional ROI