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September 19, 2014

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Comparatively, small donors don’t amount to much

Susan Daole last month gave $100 to President Barack Obama because she wanted to fight the flood of million-dollar checks supporting Mitt Romney.

“I think my contribution in its own way has just as much worth as the millions that some of the wealthy donors contribute,” said the 63-year-old librarian from Lexington, Ky. “And I’m really hoping that even my little bit makes a difference to get him elected again.”

Sorry, Susan. It would take 100,000 Susan Daoles — nearly all registered Democrats in Lexington — giving $100 apiece just to match the $10 million that billionaire casino mogul Sheldon Adelson and his wife dropped into the super PAC boosting Romney on a single day in June.

Make no mistake, there is no shortage of Susan Daoles this year: Roughly 2.5 million people have kicked in $200 or less to the various committees helping their candidates win the White House.

But those 2.5 million people account for less than 18 percent of the total money haul.

By contrast, 2,100 donors giving $50,000 or more have contributed about $200 million to the Obama and Romney campaign committees, victory funds and their supportive super PACs. That’s far more than the $148 million all those 2.5 million small donors contributed through the end of June, according to an analysis of Federal Election Commission data by Politico and the Campaign Finance Institute.

In other words: In an election purportedly being driven by the economic concerns of the middle class, the top 0.07 percent of donors are more valuable than the bottom 86 percent.

This isn’t true only at the extremes. Look across the full $830 million that those committees have raised and the disparities are also stark: Just 14 percent of the donors account for 82 percent of the total take.

That’s not even the real cash this year.

Big, secret donations — raised by nonprofit groups that can take unlimited checks without revealing their donors — will account for the majority of the $1 billion that GOP-allied forces intend to spend on the 2012 election.

Almost none of the $400 million being steered into politics by the Koch brothers will ever be publicly detailed. Nor will most of the $300 million in spending planned by the Karl Rove-conceived Crossroads outfit. Democrats also are scrambling to raise unlimited cash, though they’ve had less success, with the pro-Obama Priorities USA Action super PAC and a linked secret-money nonprofit angling to raise $100 million.

It wasn’t supposed to be this way. For more than a century, American campaign finance regulations were built around the premise that corporations, unions and rich people shouldn’t be able to use their bursting bank accounts to exert disproportionate sway on elections.

At various points, the little people seemed to be the real power in presidential campaign finance, with Rove pioneering the use of direct mail and other techniques to build a massive small-donor operation that helped power George W. Bush’s successful White House runs.

Four years ago, Obama used the Internet to raise an unprecedented amount of cash from small donors who helped him shatter fundraising records and led him to boast of ushering in “a new kind of politics.”

But the much-ballyhooed small-donor revolution appears to be ending before it ever fully took hold. Instead, the explosion of big money is quickly diminishing one of the few avenues — outside of voting — for average folks to shape elections, help determine candidates’ viability and affect the course of the country.

It’s not like no one saw this coming. Bob Bauer, Obama’s campaign lawyer and campaign finance guru, in 2009 forecast a “spell of disillusionment” when he urged the Supreme Court not to allow unlimited corporate campaign ads. He said it would create “a widespread sense that the rules were changed and corporate political power restored to commanding levels, just as the era of the small individual donor had begun.”

Bauer made that argument in the Citizens United case, and the court didn’t heed his warning. Instead, in the seminal 2010 ruling, it sided with the conservative advocacy group of that name and legalized unlimited corporate and union political ad spending. The ruling, which found restrictions on such spending unconstitutionally infringed upon the First Amendment, removed restrictions on anonymously funded nonprofit groups. Plus, it emboldened big donors, who got a new avenue for mega-checks when a subsequent lower court case paved the way for the creation of super PACs.

But Bauer’s most famous client had a role in this, as well: In 2008, Obama opted out of the government program for the public financing of presidential campaigns, which had been set up during the Watergate era to avoid the dollar-for-dollar arms-race mentality that defines running for president in the 21st century.

Now, when it comes to fundraising, it’s more cost effective for candidates and their allies to schmooze a few hundred rich folks than it is to cultivate a base of several hundred thousand activists through labor-intensive — and costly — online and direct-mail solicitations and phone banking.

“There is simply a better payoff by courting seven-figure donors than there was previously,” said Matt Schlapp, a former White House political director for George W. Bush, whose political operation combined aggressive outreach to small donors with cool perks for donors who collected big checks from rich friends and associates. “And that has caused finance consultants to rethink how they spend their time and how they put their projects together.”

Case in point: Obama needed just 60 people to pull in $2.4 million at a Manhattan fundraiser last month.

Despite that, Obama and Romney partisans tout their small donors, whom they point to as evidence of their campaigns’ grass-roots support.

Romney’s campaign announced last week that in July, donors who gave $250 or less provided more than 25 percent of the $101 million raised by the campaign, the Republican National Committee and the Romney Victory joint fund created by the campaign and the Republican National Campaign.

A Romney aide told Politico that the campaign committee through June had 495,000 donors who had given an average contribution of $280.99; Obama’s campaign laid out a much more small-money-driven topline: 2.4 million donors with an average contribution of $55 each. On Twitter, the campaign announced that its average donation in July was $53.49.

“We are proud of the 2.4 million people who have supported this campaign financially, and we believe that a grass-roots organization is how we’re going to win,” Obama Campaign Manager Jim Messina told Politico. “This campaign has always been about the amount of people across the country who want to get involved at the grass-roots level, and always will be.”

And when it comes to small donors, Obama is still beating Romney hands down.

Obama’s campaign; the Obama Victory Fund, a joint committee set up by Obama and the Democratic National Committee; and the super PAC Priorities USA Action through June raised about 26 percent of their $469 million haul from folks who gave $200 or less. That’s a slightly higher small-donor percentage than Obama’s campaign committees posted during his 2008 campaign in the pre-super PAC days, according to an analysis by the Campaign Finance Institute.

By comparison, Romney’s campaign committee, combined with Romney Victory and the pro-Romney Restore Our Future super PAC, through June had received only about 7 percent of their $362 million from donors who gave $200 or less.

But the story of the 2012 cycle so far has been big donors, and so far, Romney’s got a lot to crow about. He outraised Obama in each of the past three months on the strength of the bigger checks the joint committee was able to accept.

And that’s got Democrats worried. Fearing the overwhelming money advantage they enjoyed in the last election will be lost, Obama’s allies have launched a major effort to woo big-dollar Democrats.

It was only four years ago that Obama told rich Democrats not to give to outside groups supporting his campaign. Now, Obama has changed his tune, blessing Priorities USA Action and clearing top aides to raise money for it.

The Obama Victory Fund in March quietly increased the maximum donation it can accept, which was initially $35,400, to $75,800. The higher max — which is more than 15 times as large as the $5,000 top check campaign committees can accept — mirrors that of Romney Victory.

Since the change, the Obama Victory Fund has held a succession of glitzy small-group fundraisers for which it’s charged $40,000 or more per ticket, including last month’s fundraiser at New York City’s tony NoMad Hotel and a birthday party fundraiser at the Obamas’ Chicago home today.

Veteran Democratic strategist Paul Begala, who is working for Priorities USA Action, said Democratic super PAC fundraising has been hindered by liberal discomfort with the impact of big checks on the political process.

“The super PACs have diluted the small donors,” he said. “It’s one of the reasons I think Democrats want to do away with them.”

Obama’s team recently began pushing its bundlers “to find new big donors,” said Don Peebles, a real estate developer who hosted a fundraiser last year at his Washington home that raised $1 million for the Obama Victory Fund.

“It takes a lot of $25 contributions to equal one $30,000 contribution,” said Peebles, a member of Obama’s national finance committee.

That’s why it made sense for Romney to focus on rustling up big checks early, said Frank VanderSloot, his national finance co-chairman.

“The most efficient place to get dollars quickly seems to be the larger donors,” said VanderSloot, who has donated $1.1 million through his company to Restore Our Future and has raised between $2 million and $5 million for the Romney campaign, including at fundraisers at his Idaho ranch.

For both campaigns, however, low-dollar fundraising provides a stream of cash they can continue to tap clear through Election Day, as well as a base of volunteers and mini-bundlers. In 2008, for instance, more than 200,000 people who started as small donors to Obama made repeat donations, usually online, and eventually crossed the $200 threshold, according to CFI.

“All money does for you is allow you to buy the tools to mobilize your supporters. So if you can mobilize those supporters directly, why not do it?” asked CFI executive director Michael Malbin.

Schlapp, the former Bush political director, said a robust small-donor program can help get “folks mobilized to make phone calls and drop literature,” adding, “that can be more valuable than the dollars they yield.”

Obama’s allies have even tried to turn Romney’s strength with big donors into a weakness, making boogeymen of major conservative givers, including VanderSloot and the Koch brothers.

In a Monday email asking supporters to help close the fundraising gap, the Obama campaign wrote, “we’re up against billionaires and super PACs that are funneling unprecedented amounts of money to defeat President Obama in this election.” In a graphic, it pointed out that “188,679 grass-roots donors with a $53 average gift = one Sheldon Adelson with a $10 million pledge.”

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  1. Public funded elections w/ voluntary enrollment. Businesses and voters alike donate to a single funding pool.

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