Roy Ho’s Blog

Obama needs approximately 80 super delegates.  How much will these 80 super delegates cost him? 

There are 280 uncommitted super delegates left. 217 pledged delegates are left for contest.  Obama needs 189 to win (Clinton needs 356). 

At this stage, the answer of electability is fairly clear.  Each candidate’s core constituency is known; their turn out rate is know.  Nothing can really get “negotiated” there.  You see what you buy.  Similarly for platform.  Other than a noble cause to vote for the winnable candidate, is there something a candidate can do for a super delegate just to get one additional vote?

It goes down to the question: what will convince a super delegate to vote for a candidate?  Electability?  Policy platform?  Popular vote count? Or something else?

All these above are very legitimate criteria.  However, some super delegates may have something more urgent on their hands: their own incumbency.  If a super delegate is in a tight race, his personal interest may be more at stake.  And Obama is not naïve about this: he has been fundraising for other candidates to gather favours.  The earliest senator endorsements are of this type. 

Other trades are typical political brokering: a promise of a specific legislation or pork barrel project.  What about fundraising support for a super delegate’s 2010 governor race?  Now, we are talking about money, real money for a politician.

Political Action Committees are the only ones that can accept political donations.  And they are owned by politicians.  The owner can forward the money to another PAC.  In fact, the surplus after campaigns belongs to the candidate.  They are structured very much like a personal account.  The point of this status is for the monitoring of Federal Election Committee.  

What did McCain do after he won over Huckabee?  Help pay off Giuliani’s campaign debt.  How?  Forward the money from his PAC!  Now, why did McCain do that?  Once Giuliani is out of the picture and since Giuliani and McCain share similar constituency, McCain wants to use Giuliani to help do fundraising.  And Giuliani was too busy with his own debt.  So, a favour was made, and a favour was returned.  

If the race gets another dramatic turn, the cost of super delegate will definitely rise since the Obama’s need of super delegate will increase.  However, if Obama can win the race all by him (through pledged delegate), then there is no need for Obama to get any more super delegate.  If not, no matter how much old politics he distains, he is still not immune to realities.  

In any given year, I would see the following news story by CNN as a human rights issue.  Not this year.  In a year where we have a long and arduous primary on the left side, the Thai shrimp story is a good way for a non-profit to get the attention to the topic it cares the most: free trade.  Here is the link to the story: 

http://edition.cnn.com/2008/WORLD/asiapcf/04/23/shrimp.workers.report/index.html

Who sponsored the study? According to CNN, it is an “international nonprofit allied organization of the AFL-CIO”.  Even if AFL-CIO did not intend to project this issue on the stage of primary race, the media is doing the job.   

What is the interests of this story?  This story is to drive the readers to import products are morally tainted.  To prevent that is to establish a higher labour rights overseas among our free-trade trading partners.  That will increase the costs of production overseas and thus make the domestic products more competitive, at least domestically.  And even though US may not import shrimps from Thailand, the image that “imports are morally tainted” is implanted in the minds of the voters.

This is the same tactic (or effect) that the Tibet protests / Olympic torch protests achieve.  If the timing of these stories are timed and are in a sequence, then they can build up a very effective momentum to force the issue from an individual story into a campaign issue where all candidates cannot afford to ignore. 

Of course, the organization has to have some sort of ground level organization to make it work effectively, such as “concerned citizens” asking the right question in town hall meetings when the candidates attend.  And such schedule is easy to obtain.  Better yet, find out which media outlet and the name of the reporter were attending.  (planting)

And when third party campaign work (i.e. soft money) in conjunction with these releases, they become powerful.  While the media attention is on the issue, fundraising can get a much better lift of response rate.  The metric of one time donor amount will see a spike.  This is also a wonderful time for donor acquisition.  Elections are exciting, even for shrimping!

This 2008 election proves to be a textbook material for advocacy, fundraising and electioneering, even better than 2000 election.  Clinton’s victory will certainly encourage her to continue her race.  What Clinton shows this time in Pennsylvania is similar to what Obama showed when he was the underdog: money does not buy election victory all the time.  Clinton won by 10%, CNN reports.

http://edition.cnn.com/2008/POLITICS/04/23/us.primary.intl/index.html?iref=hpmostpop

An indecisive Obama Super Tuesday victory brought this “lengthening, torturous” race because, as always, an indecisive result invites the loser for a re-match.  And Clinton gladly took on the challenge of a re-match.

Obama out spent Clinton by 2 to 1.  Obama enjoyed the positive media attention.  And he had the momentum, the most important thing of all.  And he yet he was behind by 10%.  A lot of people may expect him to win and would not be surprised by a loss.  But 10% probably is the threshold for “failure”. 

The real loss of this race so far is Ralph Nader.  He and/or his party have not improved their platform, i.e. the product, much since 2000.  Neither did they improve their election techniques.  Ralph Nader does not have the charm Obama has.  However, the electioneering could have been improved when in fact Obama took the great leap.

Clinton won by canvassing, the most important virtue of a politician.  Politics is a service industry.  Responsiveness to voters, not leadership, is the virtue promoted by democracy.  She canvassed hard in every county, in every city hall.  And she mobilized her daughter and husband in the state.  The air war of TV and Radio ads rained down by Obama did not bring him a victory just like money did not the Iowa victory for Clinton.  Obama won Iowa by the activists.  Clinton won by her hard work and her organization’s (or Governor Ed Rendall’s organization) hard work.  

This race broadened the voter base of Democrats in Pennsylvania.  And this is what advocacy / non-profit groups want.  The organization itself need not lend its name in the campaign in order to reap the benefit of it.  It’s the board members responsibility to participate in individual campaigns in order to gain the political access to the politicians, even though they may be the city council politicians.  It is this type of occasion that the cause focused groups can cultivate the next group of volunteers, big ticket donors, board members, fundraisers.  A broadening base means a longer list of “concerned citizens”.

When an election gets voters excited, voters are more willing to increase their level of civic participation, be it scrutineer, dropping flyer for an advocacy group, phone bank caller for a fundraising campaign of MADD, or even better attendance for the local recycling organization.  Although this race is dragging on, this serves as an opportunity for all non-profit groups to enlarge their voice and base.  

Leadership is wanted when voters are unable to specify their needs.  When change is wanted without a laundry list is change for the sake of change.  A victory by promoting leadership shows people want to be led, people expect someone who knows better than they do.  

Bush announced his goals on climate change.  Sierra Club already says Bush’s plan will require a miracle to save our planet.  Even McCain’s ideas are more agressive than Bush’s.  Very little is said about climate change in yesterday’s Pennsylvania presidential debate between Clinton and Obama.  Why is Bush anouncing something so useless and so late?   Is it part of his last minute legacy plan?  How does it relate to my non-profit organization when it is not an advocate of climate change?

This is his stall tactics. 

Getting a bill passed requires a process in the congress and senate.  It goes through committee, agenda arrangement, scope definition, text proof reading among members and aides, negotiation among members, parties and administration.  By providing something (anything), it takes off some of this momentum to his goals. 

Bush realizes that something will get passed in the next administration.  But providing something so vague, he can drag the bargain wide open for the next round of lobbying and thus provide a possibility of pushing a resolution less aggressive than it otherwise would be. 

In other words, he is not aiming for any kind of success.  He is aiming for a pay back to his constituence.  He is not even aiming for a legacy.

However, one point is worth noting: if Bush recognizes the need to address this issue, it will be difficult for anyone in the future to deny climate change.  The remaining question will be what and how: what should be done and how to get it done.

A lot of attention will be focused on what the emission will be.  However, the how question will affect more people in a wider range than media will be able to focus on.  Advocacy groups/nonprofit organizations representing interests not directly affected by the emission will have to pay attention on the how question.  Unfortunately, since media do not focus on the how part, advocacy groups and nonprofit usually lose their sight of it. Here are two examples to achieve the same goal with different implementations and their corresponding effects outside of pollution.

Example: emission legislation requires enforcement.  This will increase the government budget, i.e taxes.  Who gets the worst of it? Small business since cost of compliance always takes up a higher proportion of cost than a big business.  Emission can also be achieved by placing a higher gas tax and increasing personal income tax exemption at the same time without affecting the federal government’s revenue as well as its budgeting.  And the effect will be significantly different in aspects outside of the pollution. 

The former will increase government participation in the overall economy.  The latter will not.  The latter will at the same time help elevate the tax burden on the lowest income bracket tax payers, same the $10k/year income group.  Now, the poverty group suddenly have an interest in how the goals are achieved. 

When attention is so focused on emission, attention on other pressing issues are forgotten.  That is why climate change can be percevied, as an elitest cause, as a competing interest against other interest groups, say proverty groups.  It needs not be.  In fact, groups of different causes can exploit opportunities of any issue to further its own goal without sacrificing the issue of the moment. 

And exactly because advocacy groups and nonprofit organizations may not be able to follow these legislation details as well as being not able to provide these suggestions to complement the legislation to achieve its goals (piggy bag), politicians now can service the interests of the lobbyists’ paying customers without much scrutiny.   Therefore, if the issue of the moment is to discourage a certain behaviour (pollution), then your organization can always advocate to tax that behaviour and cut taxes (or spend that same tax revenue) for your constituence (seniors, students, low income, domestic abuse victim).

Fiscal policy is boring.  However, that is the most effectively way to modify the aggregate behaviour to achieve a goal.  Aggregately, people adjust their behaviour to the most use of their budget.  Even people who do not subscribe to that specific ideology now gets taxed and contributed to the cause.  An issue completely unrelated to your organization’s goal can help you when the implementation can be compromised to your favour.  In fact, you can suddenly become an ally of any issue of the moment, if you can demonstrate you can mobilize votes to support a legislation.

Clinton’s fundraising figures for March is not released yet.  This democrat primary has not been concluded yet.  However, Obama vs. Clinton has given a lot of advocacy organizers, fundraisers and non-profits a very good lesson.  This primary also demonstrates the effect of the changes on election financing laws.    

The news this morning regarding Obama’s fundraising focuses on the $ raised in March.  I would like to stress that it is the quarterly fundraising filing, not a monthly filing.  And the detailed report illustrates only the donors with total amount >$200.  

The donation limit forces candidates to reach a wider donor base than before.  And Clinton appears to miscalculate this effect: she never cultivated this group of donors.  And since Obama was 1) the underdog; 2) was unable to tap into the bigger donor base than Clinton and 3) had experience in organizing grassroots campaign, he farmed the small donors.  And there is an advantage of farming small donors: they are more likely to be your advocates.

Small donors also have less leverage on the candidate (or your nonprofit organization), they cannot assert as much influence as a $100k donors can and do.  That gives the candidate more flexibility which can be a good thing as well as a bad thing.  

Cultivating these donors also require a different kind of talents.  Small donors usually come through direct mail, tele-marketing, online, face-to-face / door-to-door and media buy.  Therefore, the message management team has to play a bigger role, which advantage Clinton should have had.  However, Obama’s fundraisers managed to overcome this. 

Obama obviously had better donor segmentation to achieve this result.  For a nonprofit, this is equally important.  The knowledge of your donor base can see when your donors will have to exit the donation cycle.  Can you see the danger if 70% of your donors are over age 65?  Yes, you can certainly start a bequest/major gift campaign.  But you still need to worry about the sustainability of your organization 5 years from now.  How to create such a campaign anyway?  A lot of organizations are very much into major gift and bequest.  Very few organizations understood bequest campaigns requires talents that are unrelated to major gift fundraisers.

Obama fundraising team should have had better technology in phone bank management.  However, the most dramatic difference between the 2 campaigns is the online advantage Obama had.  Obama has web team that is more capable of generating traffic (keyword management, inbound links, etc).  

Before the donation limit put in place, all these techniques may have been relevant although lower priorities.  Now, they are critical.  Small donation limit means the candidate cannot afford to have face to face with donors himself.  This turns everything into an industrious enterprise.  It’s not about 1 to 1 any more; it is about 1 to N.  

This will be the same for the nonprofit industry, anyone who is (wants to be) a strong advocate of a cause.  Foundation money is larger, but they assert a much larger influence on your cause.  Technology, not only web technology, has made small donor acquisition easier than before and is able to make your cause successful, Obama is a good example of your long ignored cause.  

A small donor is also more likely to be more committed to your cause.  And they are more likely to donate a small amount over a longer period of time.  This makes the financial risk of an organization smaller since financial revenue fluctuation is now smaller.  Converting a donor from a one-time donor to a monthly donor is another specialty in fundraising.

A lot of boards have a difficulty in finding board members who are not only committed to the cause, but also has institutional memory with the organization.  Well, a good place is to find it among its donors.  And so, it is a large number of donors that will help this goal.   

A lot of organizations have fundraising plans.  They usually have a 5 year plan on what to accomplish.  However, they also need to have a 5 year fundraising plan.  What is the % of donors who are <age 45 5 years from now (compare to today)?  What is the % of monthly donors will it be?  How long does a donor stay with the organization (life time value)?  Which occupation / industry gives you the most donors?  Are you surprised of the amount they give and the occupation they are in? Is this an untapped market or under-cultivated donor base?

From organization development perspective, this pro-longed primary is actually good for the Democrats.  They are building up a better donor base, more lists, tapping into markets where they have not been serviced.  This will build up their base for 2010 congress election and beyond.  Of course, there is a cost for that, i.e. reducing time to fight McCain and win the White House.

Obama’s campaign is actually educating a lot of people who are in the field of fundraising and nonprofit/advocacy.