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What’s missing in most political party fundraising?

Posted by Ron Nehring in Developments on April 23, 2013 with No Comments

Pol Tech Series

by Ron Nehring

It turns out that not all political fundraising is the same, and the failure to understand the differences can cost a political party substantial donor support.

At last month’s International School of Fundraising in London I was asked to present on a very specific topic: what’s the difference between political party and candidate fundraising, and why does it matter?    The difference is often not well understood, but the impact on the bottom line can be enormous.

Political parties and candidates are closely related – they’re both focused on elections, staff move back and forth, and there’s a level of mutual influence.  But where fundraising is concerned, the similarity ends there.

Every  candidate campaign is a startup: it’s formed, it wages a campaign focused on getting one person past the post on Election Day, and then it shuts down.  By contrast, political parties are ongoing concerns.  The party has bills to pay in December while the candidates have moved on elsewhere.

It turns out that political parties share more in common with non-profit organizations and charities than with candidates.  Like political parties, charities are ongoing concerns with responsibilities year after year.  More significantly, charities don’t have elections to raise money around – they need to create their own sense of urgency, mission, and following.

When political parties only raise money like candidates, the results can be disastrous.  Candidate fundraising is driven by a singular personality (the candidate), and a specific event (Election Day).  They don’t have strong ways to raise money in the year immediately following an election, as most candidate fundraisers will tell you.

To succeed, political party fundraising operations need to adopt the strategies and tactics that sustain large non-profit organizations like The Heritage Foundation, the American Enterprise Institute, and even non-ideological groups  like the Red Cross and the American Heart Association.

These groups succeed with a focus on two types of giving: sustained giving programs, and capital campaigns.

Sustained giving programs provide donors with a reason to contribute to the organization each year, or each month.  Small monthly donors may receive special informational updates, while larger regular donors may be invited to regular, local donor maintenance events, conference calls, and higher levels of attention.

While most small dollar contributors are motivated largely by issues, mid-level donors tend to be more social.  They’re willing to give, but they expect an event, an opportunity to meet a VIP, or learn something special, as a part of their giving.  To them, contributing is something like expensive dating: it’s a part of their social life while also contributing to a cause they support.

Many political party organizations focus chiefly on election-oriented fundraising and neglect sustained giving programs, either ignoring them completely, or implementing them in a haphazard and inconsistent manner that fails to earn donor confidence and loyalty.  Raising money around an election is important for any political party.  Yet, by failing to implement long term sustained giving programs, political parties can be left without a way to raise funds in the months immediately following the election.

Worse, a lack of sustained giving programs can lead to a party taking on debt during the slow part of the election cycle, making it harder to raise funds later. This is not an uncommon problem, especially in parties than become a financial appendage of a Republican governor.  When the campaign  is over, the party is left without a financial infrastructure of loyal, repeat donors whose primary concern is supporting the party as opposed to a single individual.

The Republican Party of San Diego County provides a model for other party organizations in the area of sustained giving.  For 12 years the party has invited donor participation through first three, and now four, donor clubs for those who donate $100, $250, $1,000 or $5,000 each year.  Members of these donor clubs provide the funds needed to support operations and programs year-round.  Today, the party continues to be in a strong financial position; it has been consistently in the black for more than a decade, and expands campaign-related infrastructure even in “off years.”

In geographically compact states sustained giving programs can be focused in a single donor market.  In larger states, programs need to be focused on specific markets with the largest concentration of donors.  When Heritage Foundation President Ed Feulner stepped down and former Sen. Jim DeMint took the helm, Heritage held events featuring the two men in donor markets around the country, specifically inviting Heritage contributors to participate.  It was a prime example of a strong sustained giving program in action.

How can a political party start up a new sustained giving program?  Establish multiple donor clubs at different giving levels.  Develop each club’s name, identity, and benefits package.  Solicit current and past donors to join one of the clubs.  Conduct regular events for members of each club, providing opportunities to meet with Republican Party leaders, lawmakers, candidates, and others.

Non-profit organizations live and die by the success of their sustained giving programs.  Political parties can increase their total revenue, add stability to their finances, and sustain ongoing programs and operations in between elections by borrowing this strategy from the non-profit sector.

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