Power And Dollar

Obama vs Clinton: A Lesson on Fundraising and Advocacy

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.

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April 4, 2008 - Posted by | advocacy, america politics, Current Events, Democrats, election, Electioneering, fundraising, nonprofits, politics, Republican, US politics, wordpress-political-blogs

2 Comments »

  1. […] royho created an interesting post today on Obama vs Clinton: A Lesson on Fundraising and Advocacy […]

    Pingback by Obama vs Clinton: A Lesson on Fundraising and Advocacy | Hillary Clinton Chronicles | April 4, 2008 | Reply

  2. […] Read the rest of this great post here […]

    Pingback by Barack Obama News » Blog Archive » Obama vs Clinton: A Lesson on Fundraising and Advocacy | April 4, 2008 | Reply


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