Does our money matter: Wikipedia Update

As you may recall, I recently made some changes to the presidential election campaign fund checkoff  Wikipedia page on the diminishing value of personal contributions to campaigns.  Below, I am including my contribution once again for your reference:

The first crack in the public financing system began in 1999-2000, when then candidate,
George W Bush opted out of public financing in the primaries. That crack was shattered
when Barrack Obama opted out of both primary and general election public financing in
2008.

Why are these candidates opting out? Simply because there is more money to be made (and matched) by opting out. With the current limits/caps in public financing, it simply makes no sense to apply for matching funds when you can raise much, much more on their own.

In the Citizens United case, the Supreme Court allowed unions, corporations, and nonprofit organizations to spend unlimited amounts of money in support of, or opposition to a candidate. Groups were thus freed to pretty much say whatever they want, whenever they want about candidates, and to do so with unlimited sums of money bankrolling their expenditures.

Thus, if you can raise unlimited funds, why bother with public financing

Much to my disappointment, there were no additions/edits to my Wikipedia post from a few weeks ago. 

You can, however, hear this topic come up again and again as the election cycle heats up, and candidates now put out press releases detailing how much money each has respectively raised
each month and quarter.  It's almost a requirement to boast of your fund raising prowess.

Some of the lesser candidates who are not having success raising private (and public) funds are forced to watch in horror as their opponents raise millions of dollars.  In most instances, candidates will drop out due to lack of funds.

Until this issue is addressed again by the courts (or Congress), it's a dash for cash, and the general public's funds don't count for much any longer.

 

 



Where does all that campaign cash actually go?

As we have documented in prior posts, there are now billions of dollars washing through the Presidential campaign.  With the election still some 17 months away, let's take a closer look at where those billions go.  While there may be slight differences in some candidates spending, the models, over time, are amazingly similar, as political operatives/consultants have become more prevalent and follow the same playbook.

A few caveats prior to digging in:

Volunteers are not free:

• There are a myriad of costs associated with volunteers, mostly around recruiting and training.  Thus, this cost will be folded under payroll and consultants.
• Media spend includes all forms of media, from television, print, blogs, radio, etc.
• It costs money to get more money.  As we will see, the fundraising cycle doesn't end until election day, and it costs a lot of cash to make more cash.
• These statistics are averages from the 2008 and 2012 campaigns.

Now, onto the actual percentages:

• Media accounts for approximately 57% of the pie, and growing.  Media buys are targeted into early primary states, and then nationally for general election.
• Fundraising accounts for 17% of the pie, and also growing.  This include mail, phones and time. 
• Overhead accounts for 13%, and the trend here is shrinking.  This includes rent for campaign staff, insurance, equipment, etc.
• Travel/events account for 6%.  While some travel is by bus/van, most are chartered flights (no coach seats for them)!
• Finally, payroll chews up 6%.  This figure is mostly for consultants, and the volunteers as noted above.

As campaigns become more social media aware, the trends are pointing towards more on line ads, as they experiment with non traditional (TV, radio, etc.).  This is not your grandparents, and even parents campaigns!