Fundraising Totals Challenge Early Campaign Assumptions
Tuesday, April 17, 2007
The first-quarter fundraising reports from the 2008 presidential campaign crystallized two realities of this intensely fought election: The battle for each party's nomination is more open than it was just three months ago, and each contest pits three relatively well-funded candidates against one another, with the rest of the field at a disadvantage.
Two common assumptions proved false: that Sen. Hillary Rodham Clinton (N.Y.), with the most extensive money network in Democratic politics, would blow away her rivals in first-quarter fundraising, and that Sen. John McCain (Ariz.), who had spent the previous two years preparing for this campaign, would easily best his Republican rivals. Instead, Sen. Barack Obama (D-Ill.) stunned political observers by raising more money for the primaries than Clinton, and McCain's anemic fundraising and rapid spending left the onetime front-runner on the defensive.
The results also showed that the most potent political fundraising networks of the past two decades -- one built by former president Bill Clinton and his wife, the other by President Bush -- have splintered. Many Clinton fundraisers are helping Obama or other Democrats. Bush's team has divided among the three leading GOP candidates, but many remain on the sidelines.
Many of Bush's Pioneers and Rangers said they were less than energized by the GOP candidates and would sit out the race until one proved worthy of their support or emerged as a clear front-runner. Among Democrats, a sense of "Clinton fatigue" has led some major fundraisers to reassess with whom they want to align.
The fundraising reports turned conventional wisdom on its head. "In the past, early numbers have often anointed a front-runner," said Ken Mehlman, former chairman of the Republican National Committee and Bush's 2004 campaign manager. "This time, the early numbers indicate a very dynamic race that could change a lot."
Tad Devine, a Democratic strategist with long experience in presidential campaigns, said the underlying meaning of the first-quarter reports is that there will be multiple candidates on each side with enough money to compete fully in states with early caucuses or primaries. He said the nominations will be decided by who runs the smartest campaign, not who has the most money.
"This isn't just a question of someone being so dominant that their political and financial dominance will lead to victory," he said.
Political insiders pored over the new reports yesterday, calculating "burn rates" -- how rapidly campaigns are spending their money -- and bankable cash, and analyzing patterns of contributions, the ratio of big donations to small contributions, and other indicators that might tease out who has the most room for growth or why a contender underperformed.
The candidates raised most of their money from a handful of states, such as California and New York, but Utah and its large Mormon community provided the second-largest amount of money for former Massachusetts governor Mitt Romney (R). Veterans of past nominating fights marveled at the fat salaries being paid to senior officials in some of the leading campaigns this year.
Almost all of the leading candidates found a statistic or two on which to claim success: Clinton had the most cash on hand of any candidate, thanks to a $10 million transfer of funds from her Senate campaign. Obama pointed to more than 100,000 donors as a sign of grass-roots energy. Former senator John Edwards (D-N.C.) noted that he raised almost twice as much this quarter as he did four years ago, although he finished well behind Clinton and Obama.
Among Republicans, Romney ($21 million) was the best first-quarter fundraiser. Former New York mayor Rudolph W. Giuliani pointed to his prodigious fundraising in March alone as evidence of his appeal. Only McCain among the top tier found little to cheer in his report -- and he has overhauled his finance team in response.
But none of the top six can think about coasting as the second quarter begins, according to strategists in both parties. McCain has the most to prove; another weak quarter of fundraising could cripple his candidacy. But Romney and Giuliani must demonstrate that their first-quarter performances were not a fluke. The same goes for Edwards.
Anthony Corrado Jr., a professor of government at Colby College and an expert on campaign fundraising, said Clinton and Obama face big challenges in the second quarter. Obama must demonstrate that he can continue to stay at parity with Clinton; Clinton must demonstrate that her fundraising capacity is as broad and deep as Obama's.
Clinton's "focal point of the first quarter was to amass as much cash as possible by focusing on large-dollar gala events," Corrado said, with the goal of raising so much money that her status as dominant front-runner would be secured -- something he called "a strategy that didn't work."
The fact that Campaign 2008 is even more unpredictable than it appeared a few months ago increases the pressure on the candidates. Alex Gage, an adviser to Romney, recently described the campaign as an attempt to sprint a marathon.
Although each nomination battle features top tiers and second tiers of candidates, the very fluidity of the race suggests there may be an opening for a fourth candidate on each side. On the Democratic side, some strategists pointed to New Mexico Gov. Bill Richardson, who raised more than $6 million in the quarter -- enough to put him near the top four years ago. On the Republican side, former senator Fred Thompson (R) is seriously considering getting into the race, but his fundraising potential remains a mystery.
Candidates such as Richardson, Sen. Christopher J. Dodd (D-Conn.) and Sen. Joseph R. Biden Jr. (D-Del.) face a steeper hill in this campaign than they might have in the past because the primary-caucus calendar includes so many big states early in the process.
The campaign is living up to its reputation as the most expensive in U.S. history. The Campaign Finance Institute said yesterday that the candidates had net receipts of $157 million in the first quarter -- five times what was raised in the first quarter four years ago -- and that they have $80 million more in the bank than their counterparts did in 2003.
For all the interest in Internet fundraising, big donors still ruled in the first quarter, with roughly 80 percent of donations coming in amounts of $1,000 or more.