Rise in Online Fundraising Changed Face of Campaign Donors

The Washington Post today carried this story about the demographics of campaign contributors in the single most expensive campaign ever, the 2004 elections.

The surging number of campaign contributors in 2004, especially the small donors who gave online, changed the character of one of the most important constituencies in U.S. politics, the people who finance presidential elections. This key group has become more reflective of the middle class, has a higher percentage of women and is far more willing to contribute without being directly solicited.

The new small donors, who played a much bigger role in 2004 than in the past, are polarized on ideological, cultural and economic issues in much the same way that large givers are, according to a survey by the Institute for Politics, Democracy & the Internet at George Washington University of all donors, both those using the Internet and those who did not. (emphasis added)

The little known secret, outside of political fundraising circles, is that small donors, those who contribute less than $200 is generally the fundamental building block of a successful campaign.

A big small donor base does two things for candidates. Frist, it becomes a much more reliable indicator of support, particularly if those donors are within the district. Only a small percentage of political supporters are willing to part with hard earned money to support a candidate. Thus if only 1 person in 100 supporters is willing to give money, have 1000 small donors in your district means that you probably have on the order 100,000 supporters.

Second, small donors can be asked for more money as the campaign wears on. Someone who contributes the legal maximum cannot give the campaign more money. But someone who contributes $50 in January, can be asked for $50 in March, $100 in May, another $100 in August, etc. Small donors can be asked again and again, usually with only some reduction in response rate.

[Study author Joseph] Graf and his three co-authors -- Grant Reeher of Syracuse University, Campaign Finance Institute Director Michael Malbin and Yale post-doctoral fellow Costas Panagopoulos -- said the trends in 2004 are beneficial to the political system, further democratizing the elite-dominated world of campaign finance.

They wrote: "The Internet has helped level the playing field between large donors and small donors. Online political activism diminishes the tremendous fundraising advantage enjoyed by long-term, large donors who move in social circles of donors close to the campaign and lobby on behalf of their candidate. The Internet has helped small, less experienced donors broaden their reach, and hence their influence with others."

This is a good trend, and a much more stable reform than anything offered up by the reform committee.