Online Fundraising Maya Yette October 20, 2008

“There is a growing sense that there is going to be a $100 million entry fee at the end of 2007 to be considered a serious candidate.”  Former FEC Chairman, Michael E. Toner

In fact… According to the Center for Responsive Politics, a nonpartisan research group tracking money in U.S. politics and its effect on elections and public policy, for the first time ever in U.S. history, the candidates for president have raised more than $1 billion

Historical Presidential Fundraising & Spending

The beginning of online fundraising  In 2000, John McCain became the first presidential candidate to benefit from Internet fundraising  The week after winning the New Hampshire primary, supporters flooded his campaign website with $2.2 million in contributions  The shift to online donations during the 2004 election happened primarily among 18 to 34 year-olds  Over 80% in that group donated online with a credit or debit card.  Howard Dean’s presidential campaign in 2004 revolutionized Internet fundraising by using new techniques:  Meetup.com was the base of Dean’s support  Ron Paul also had a successful online campaign that thrived even though the mainstream news media mostly ignored him.  In one day in November 2007, Paul raised $6 million, more than $4 million of it online Dean used an interactive baseball bat on his website to periodically challenge supporters to send in contributions for a particular cause or by a certain time. As contributions rolled, in, the virtual bat would fill up like mercury rising in a thermometer

Why Online Fundraising Works  It’s EASY!  In 2004 the surge in small donors, especially on the Democratic side, was driven by the Internet  40 percent of online donors gave money without first being approached by a campaign  Nearly half of the online donors who gave $100 or less, and more than one-third of those who gave $500 or more, said they contributed without being asked. This compares to only about one-quarter of the offline donors  Online donors can connect with others, find information and be politically active  Online donors are more likely than offline donors to ask others for money, especially because they are already connected on social networking sites  The Internet is a cheaper, more engaging way to request money. Exchanges between a political party and potential donor can be highly personalized, and requests can be tied to issues seen as important to an individual user.  Since most donors give less than $200 you can solicit them multiple times as opposed to someone who donates what the law will allow the first time

2008 Presidential Race

 “We have created a parallel public financing system where the American people decide if they want to support a campaign, [and then] they can get on the Internet and finance it. And they will have as much access and influence over the course and direction of our campaign [as] has traditionally [been] reserved for the wealthy and the powerful.”  Barack Obama at an April 8 fundraiser

How 2008 Revolutionized Online Fundraising  Barack Obama has established a better online presence than John McCain and has employed the Internet to tap into more donors than any candidate in history  In 2007, Facebook co-founder Chris Hughes left the company to join Obama’s campaign and helped develop Obama’s campaign Web site  The campaign has reported $160 million in contributions from donors of $200 or less, more than a third of the $458 million raised  In January Obama raised $36 million, the most ever raised by a candidate during a Primary race. $28 million of that was raised online  This is more money than Howard Dean raised in his entire 2003/2004 campaign (he raised a total of $27 million)  The $28 million in online contributions came from more than 250,000 contributors. 90% were under $ % were $25 or less, and 10,000 people gave $5 or $10 to the campaign.  Many online donors participate in “matching” programs, which allow them to hook up with other Obama supporters and eventually share addresses and blogs.  My.BarackObama.com includes fund-raising tools that allow supporters to:  click on a button and make a donation  sign up for the subscription model and donate a little every month  Set up your own page, to establish your own fundraising goal and connect with friends to get them to donate   McCainSpace does not have anything similar

Questionable Donations  The 1970s campaign law dictates that donors who contribute $200 or less to a candidate do not have to disclose their identities. Therefore a single donor who makes such a donation multiple times could surpass the $2,300 limit on contributions to a campaign in the general election and the $2,300 limit for the primaries  FEC breakdown of the Obama campaign has identified $222.7 million as coming from contributions of $200 or less. However, only $39.6 million of that amount comes from donors the campaign has identified.

General Fundraising Sites  ActBlue: Democratic online fundraising ActBlue  Launched June 2004 and has raised over $73 million for more than 3,000 Democratic candidates and committees  Slatecard: Republican online fundraising Slatecard  Launched in 2007 and has raised over $500,000  Largely benefit low-profile, local candidates because it is free

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