By the end of February 2020, seven Democrat candidates raised a sum total of $150,000 from donors in Upstate South Carolina during the presidential preference primary campaign. The per-head donation amount ranged from $5 (towards Bernie Sanders’ campaign) to the legal limit of $2800 (Joe Biden’s campaign).
The top three candidates in this primary race (Bernie, Pete Buttigieg, and Biden, respectively) had used text fundraising as one method of collecting donations from supporters. This popular method of communication and transaction had resulted in optimum cash flow for their primary campaign.
On the other hand, Donald Trump’s funding from various republican PACs got him ahead in the primary campaign fundraising race and earned him a total of $178,017,336 by the end of April 2020.
So what do these fundraising stalwarts teach us about fundraising during primaries? This article discusses the five strategies to learn from each successful (in terms of fundraising) candidate.
- Fundraising for a primary campaign:
- Bernie Sanders: Focus on small individual donations
- Pete Buttigieg: Utilize multi-channel donation methods
- Donald Trump: Leverage authorized candidate or party committees
- Paul Mitchell: For uncapped donations, use self-funding and candidate committees
- Steve Bullock: Go for public financing (fund matching) when low on donations
- Lindsey Graham: Raise funds with 501(c) and 527 (PAC) organizations
Fundraising for a primary campaign:
Fundraising is about tapping into reliable and generous networks and raising the funds required by your campaign. Here we look at some viable fundraising methods used by political candidates and take lessons from them.
Please note that the inspirations are taken neither as election winners nor as support for the candidate or party. Rather, the examples only show candidates who used these fundraising methods and, to a large extent, succeeded in collecting the desired funds.
Bernie Sanders: Focus on small individual donations
Total amount raised through individual donations: $120,953,024.77 (by February 2020)
Bernie Sanders’ campaign advocated itself as a grassroots movement, championing the ordinary American citizen’s support to raise funds. He famously rejected donations from large corporations and Super PACs and rather designed his campaign strategy to suit millennial voters’ interests and support.
Although the strategy of rejecting big dollars and accepting only relatively humble donations from individuals may look counterintuitive, it worked superbly for Sanders. In fact, the Bernie Sanders campaign fund managed to collect $5 million from grassroots Americans in one day!
Who should opt for this strategy:
- Candidates and parties that have a phenomenal grassroots reach.
- If your campaign advocates against large corporates or the status quo.
- Campaigns and candidates who are working primarily for the ordinary American.
- Campaigns targeting young (Millennial and Gen-Z) voters.
|Individual donor||Candidate committee||SSF and nonconnected PACs||Super PACs||State/district/local party committee||National party committee|
Pete Buttigieg: Utilize multi-channel donation methods
Total amount raised from individual donations: $51,462,291.06 (by October 2019)
Pete Buttigieg’s campaign, much like Sanders’, focused on small donors’ contributions. A millennial himself, Buttigieg leveraged appeal strategies and donations methods that best interest younger generations. Here are some donation sources your campaign can use (the first four were heavily used by the Buttigieg campaign):
- Text fundraising
- Social media fundraising
- Cash or checks (during events or merchandising).
- Online donations pages (advertised via texts, emails, your website, and social media)
- Telephone fundraising
- Check-out charities
- In-person fundraising
- Peer-to-peer fundraising
Who should opt for this:
Primary campaigns that want to ensure a smooth donation process for supporters must look out for fundraising methods that best suit the donors’ needs. Often, you will have to invest in a variety of platforms to collect funds.
Contribution limits depend on who is donating (individuals, committees, PACs, etc.)
Donald Trump: Leverage authorized candidate or party committees
Total amount raised through committees: $248,562,687 (by September 2020)
Trump raised funds with the help of the Republican National Committee and other authorized political committees (such as the Trump Victory Committee). These committees are specially established to build support and raise funds for candidates contesting from the party (Republican, in this case). Their advantages include:
- Vast and diverse grassroots range.
- Ability to organize large-scale events and conventions to raise funds.
- Strong networks among major donors and sponsors who finance political campaigns or candidates.
Who should opt for this campaign fundraising method:
Candidates contesting in:
- National or federal elections.
- Senate elections.
|Candidate committee||State/district/local party committee||National party committee|
|Candidate committee||$2000/election||No cap||No cap|
|Donor||State/district/local party committee||$5000/election (combined)||No cap||No cap|
|National party committee||$5000/election OR up to 51,200 (combined) with the Senatorial campaign committee.||No cap||No cap|
Paul Mitchell: For uncapped donations, use self-funding and candidate committees
Self-funded amount: $1,900,000 (January 2019)
In 2019, Mitchel sought to rush past his Republican opponents (contesting to win Michigan’s 4th congressional seat). Toward that effort, the businessman self-funded $1.9 million to his own campaign, raising over four times that of his closest fundraising opponent.
A candidate’s “personal funds” include:
- Assets that the candidate has legal rights of access over, legal title to, or equitable interest in.
- Income, salary, or wages earned from bona fide employment.
- Dividends, interests, and funds acquired by liquidation or sale of stocks (or other investments).
- Income from trusts established before elections
- Personal gifts earned before the election cycle.
- Joint assets with a spouse.
- Money earned from lotteries (or other games of chance).
Personal funds DO NOT include:
- Personal gifts or loans received after the election cycle begins.
- Bank loans obtained for the purpose of the campaign.
- Contributions by friends or family.
These funds are subject to contribution limits as for any other individuals, loans, or committees.
Who should opt for an (at least partially) self-funded primary campaign:
Candidates with liquefiable assets, disposable incomes, or other forms of proceeds that count under “personal funds” by the Federal Election Commission.
Contribution limits: According to the FEC, self-funded candidate contributions are not liable to any limitations. However, candidates must report such funds and file documentation.
Steve Bullock: Go for public financing (fund matching) when low on donations
Total amount raised: $5,320,000 (2020 cycle)
In October 2019, Steve Bullock became the first (and only) Democratic presidential candidate to opt for public financing. Bullock was stuck far behind his other Democratic opponents in terms of fundraising.
This fund matching method for the primary campaign could raise substantially more donations than individual small and large contributions. Thus, he opted for it.
If you too find yourself in such a position, fund matching with public financing can boost your collections and get you (if not ahead) back in the race.
The eligibility criteria for matching funds in a presidential primary campaign are:
- At least $5,000 raised in 20 states each (total minimum $100,000). Only contributions made by individuals count here.
- A letter of certifications and agreement to the government, pledging compliance with provisions mandated by the Federal Election Campaign Act and the Presidential Primary Matching Payment Account Act.
- An audit of the campaign made by the FEC.
Rules surrounding fund matching:
- Only a maximum of $250 per individual contribution is eligible for fund matching. The contributions must be made either by check or other written instrument paid to the candidate or the campaign committee.
- As part of the agreement, the candidate pledges to limit spending in each state based on their voter population and to limit national spending.
- Candidates can spend a maximum of $5000 from personal funds towards the campaign.
- The documentation proving eligibility may be submitted the year before the elections. However, the first payment is not made before January of the election year.
- Candidates can continue receiving matching funds even after they drop out of the race to repay campaign debts.
- If the FEC revokes eligibility, the campaign must repay if they:
- Received more public funds/matched funds than it was entitled to (e.g., if it was discovered that certain contributions earlier thought eligible for fund matching are actually ineligible).
- Had surplus funds in hand after termed ineligible.
- Procured nonqualified funds by spending in excess of the limit.
- Used funds for expenses not related to the campaign or provided insufficient documentation.
Who should opt for public financing:
- Campaigns who are trailing behind in terms of fundraising.
- Candidates who haven’t spent more than $5000 from their personal funds.
Funding limit: A candidate receives no more funds than half of the overall spending ceiling.
Lindsey Graham: Raise funds with 501(c) and 527 (PAC) organizations
Total amount raised through such organizations: $2,012,979.36 (by April 2020)
During the 2020 cycle, Lindsey Graham consistently collected more funds than the average raised by Senate members. One strong hand in his fundraising machinery was his leadership PAC.
PAC (527 organizations) and 501(c) can aid your campaign in raising large amounts of soft money (funds donated to a campaign and not directly to a candidate) in relatively less time. The different types of organizations that can help with political campaign fundraising are:
- 501(c) organizations: Chamber of commerce [501(c)(6)], labor unions [501(c)(5)], and social welfare [501(c)(4)] can contribute to political campaigns during elections. The two eligibility criteria for them are:
- Their primary purpose is issue advocacy (not political advocacy)
- They do not require to disclose donor information.
Note that 501(c)(3) charitable organizations cannot participate in a political activity related to campaigns or elections.
- Connected PACs: Connected PACs (aka corporate PACs) are organizations established by businesses, health organizations, labor unions, non-profits, or trade groups. Their funding is mainly from “restricted classes” such as shareholders and managers.
- Non-connected PACs: A non-connected PAC is a committee started by single-issue or ideological groups that are not connected with either business, unions, political party, or authorized committee.
- Leadership PACs: According to the FEC, “A leadership PAC is defined as a political committee that is directly or indirectly established, financed, maintained or controlled by a candidate or an individual holding federal office, but is not an authorized committee of the candidate or officeholder and is not affiliated with an authorized committee of a candidate or officeholder.”
- Super PACs: A super PAC is a committee with the power to raise unlimited funds from associations, corporations, individuals, or unions. They can spend (uncapped) proceedings towards a campaign’s expenditure or to advocate for or against a candidate. However, they can neither donate directly to a candidate (or campaign) nor coordinate with the spending of the candidate they benefit from.
Who should opt for this: Most candidates usually opt for fundings with PACs and such organizations, even during the primaries. Unless you are taking a hard stand against big corporations or money (like Bernie Sanders, as we discussed), it is advisable to take the help of 501(c) organizations or PACs, or both.
|501(c) organizations||No caps for strictly independent spending. PAC rules apply if spending is coordinated with the candidate/campaign.|
|Connected PAC||$5000 per year|
|Non-connected PAC||$5000 per year|
|Leadership PAC||No limits|
|Super PAC||No limits|
For more details on how connected, non-connected, and other PACs can contribute during elections, read: Political Contributions: A Fact Sheet.
While you can choose to highlight one method as your primary fundraising method, it is advisable to dip your fingers in as many pies as possible. This ensures you collect more funds in total and also doesn’t let any supporter feel insignificant or irrelevant (e.g., small donors).
There’s a lot more to a primary campaign fundraising after you decide your most suitable methods. Your messaging, strategies, and tools define how generously supporters donate to your campaign. For a guide on political fundraising, read Political Fundraising- definition, strategy, and tools to bring in the dollars.