The future of the fundraising arms race

The future of the fundraising arms race
Fundraising is changing, but campaigns need to remain focused on results.

The fundraising technology created by John Simms of the Republican firm CMDI and Stu Trevelyan of the Democratic firm NGP VAN powered the majority of all funds raised for 2012.

Fundraising played a much larger role in the 2012 election cycle than ever before. Both major party presidential candidates declined federal funds and went on to shatter fundraising and spending records. With the increasing importance of joint fundraising committees (JFCs) and Super PACs, political fundraising has become an arms race.

CMDI and NGP VAN have the honor of helping our candidates, Republican and Democrat respectively, build highly competitive $100 million-to-$1 billion plus organizations every four years. And every year we work to keep our feet on the innovation pedal by working with campaigns in competitive congressional and statewide races build $10-to-$50 million organizations.

In assessing the state of the political fundraising industry, we’ve divided our analysis into two main sections—one that offers a look back at the 2012 cycle and another that looks ahead to 2013 and beyond. While we co-wrote an intro and conclusion, we decided to tackle each section individually from the perspective of our respective party.

Observations from 2012

John Simms In 2012, large-dollar donors (donors who gave more than $200) continued to be the foundation of Republican campaigns. The Romney campaign utilized CMDI’s web and mobile software to manage the entire solicitation process of high-dollar donors by volunteer and professional fundraisers (also known as bundlers). By the end of 2012, the majority of all large donors was solicited and tracked using this software, known as ComMITT. Every stage of the solicitation of donations and the recruitment of new bundlers was recorded and managed in ComMITT Finance team members had a transparent view into how each of their fundraisers and bundlers were performing. This real-time data informed a dynamic fundraising process entirely dependent on intelligent donor cultivation and highly motivated volunteers.

Republicans successfully raised more than half of all funds through event and bundling (direct fundraising appeals) channels. Direct mail was the second largest channel, followed closely by email/online and telemarketing last.

Interestingly, while the total money raised was remarkably greater than 2008, the contributing percentage raised from each fundraising channel was not significantly different. The greatest difference was that online/email channels contributed more than double the percentage of total funds raised in 2008. A partial explanation for this increase is the simple fact that a greater effort was made to raise money online.

If one listens to the chatter, direct mail has lost its shine in comparison to sexy new digital apps, tracking web visitors and online advertising. The 2012 gross numbers would indicate otherwise, as direct mail was the second largest fundraising channel and raised more than twice as much as the web, although we might learn from examining cost and ROI. As of 2012, there is still a large pool of Republican donors who continue to respond to mail.

For the 2012 cycle, Internet giving seemed to be primarily driven by major news events rather than prospect cultivation. About a dozen days of online response made up a third of all funds raised online. The gifts from these few days can be directly attributed to offline events such as the presidential debates and the Supreme Court’s ruling on Obamacare. Not surprisingly, online and direct mail low-dollar fundraising got traction in September and October.

As any good fundraiser knows, the case for giving is most persuasive to a screened prospect when a well-tested message and technique is delivered. Knowing what message and technique will be most effective for a segment of donors requires rigorous and repetitive testing. Delivering the message through the channel most likely to elicit a response requires cross-channel analysis without the impediment of silos. 2012 was a year of great fundraising success for Republican finance teams, but there are lessons for the future, too.

The first lesson is that it is possible to raise much more money than anyone ever thought possible. Hopefully a second lesson is that centralizing marketing data across all marketing channels and conducting rigorous analysis and testing will optimize an already very productive fundraising process. The result will be more funds raised at lower cost.

Breaking down the silos, information sharing, sound research and testing can optimize and further improve future fundraising production. Carefully planned and executed upgrades and multiple gifts strategies cannot be ignored.

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Becki Donatelli

Thanks John. In the 2008 presidential primary cycle approximately one third of funds raised for McCain came online. In the general roughly twenty five percent of all funds raised including GELAC, JFC's etc came via the Internet...mostly as a result of direct marketing techniques rather than over the transom one day donations. As a Republican, I'd like to see us investing more in our small dollar, grass roots building programs that have the double benfit of raising money and raising voters.

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