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.

Stu Trevelyan
Heading into the 2012 cycle, Democrats and progressives knew that Citizens United meant a flood of special interest cash for Republicans and pressure on Democrats to raise more money than ever to counter that food. Add to that a tough economy and difficult electoral dynamics in the House and Senate, and Democrats knew they’d need to innovate on the fundraising front to succeed in 2012.

Three themes emerged from Democratic fundraising efforts this past cycle. First, Democratic campaigns learned to interact with supporters holistically, rather than via the old, fragmented approach of having fundraising, field, and digital departments all interact in silos with supporters. When campaigns are run with data silos, they do inefficient things like send a major contributor an email asking for $25 because the digital silo doesn’t know that the contributor already wrote a check for $1,000 to attend an event.

Given that most Democratic campaigns used the NGP fundraising product, which has email and digital features, Democrats are able to avoid having fundraising and digital silos. This allowed them to do things like send emails with SmartLinks, which automatically populate a contribution page with each supporters’ highest previous contribution (online or of). By breaking down silos, Democrats are turning volunteers into contributors, and getting blog commenters into the fundraising funnel.

Second, Democratic campaigns large and small are mastering small-dollar fundraising online. Online fundraising is now a significant part of Democratic fundraising at every level. Campaigns are driving traffic, collecting emails, cultivating and segmenting through petitions, converting supporters to small-dollar contributors, and then successfully getting those contributors to give again or become monthly sustainers.

Third, campaigns of all sizes raised more as a result of testing to maximize results. President Obama’s campaign and Dan Wagner’s impressive analytics team provided the best example, impacting fundraising and every other aspect of the campaign by collecting data from NGP, VAN, Blue State Digital, and internal products and then running tests and maximizing results across a unified data set.

Driven partially by the outstanding training programs of the New Organizing Institute, Democratic GAIN, and others, even Democratic campaigns without significant resources maximized their fundraising. Democratic campaigns A/B tested emails, compared results of landing pages and tracked dollars raised by various online ads. They analyzed data across departments and found ways to get higher conversion rates and larger and more frequent contributions.

2013 and beyond

John Simms
We face an enormous challenge in the next four years to match and leapfrog the opposition. Republicans will focus on developing an analytical environment enabling us to better understand the political landscape, to detect subtle changes and identify opportunities, and to recruit and train a base of talent with the right match of intellectual capital and commitment. We need to better target our resources, messaging and activities to optimize our chance to win, not only in the fundraising race, but also at the polls.

Moving forward, campaigns must embrace technology that will centralize all relevant data, deliver better information and facilitate customized cross-channel fundraising response vehicles that are personalized on the donor level. How appeals are created, tested, analyzed, and delivered will continue to evolve.
In the midst of all this change, we cannot be distracted by shiny objects or untested theories. It will never be just one thing that leads us to success. The fundraising basics of rigorous testing for the best performing message and technique will always be paramount to success.

Stu Trevelyan
Many of the same pressures that made 2012 challenging for Democrats remain: the prospect of massive outside spending propping up Republicans, more Senate seats to defend and a Republican House majority. Happily, some of the trends I noted above will continue to bear fruit this cycle.

Democrats have a clear tech advantage, although that’s going to be at stake in 2013 and beyond as Republicans strive to catch up. The active email lists of Democrats have become a gift that keeps on giving, via small-dollar contributors. Writing about Democrats’ use of data, analytics, and experimentation, Slate’s Sasha Issenberg noted that, “No party ever has ever had such a durable structural advantage over the other on polling, making television ads, or fundraising, for example.”

In 2013 and beyond, one trend will be the increasing use of the structured relationship data that social networks like Facebook make available. Obviously, relationships have been used for bundling and by fundraisers for many cycles. Social grid data enables the creation of advanced tools that turn your supporters into sophisticated fundraisers.

In the 2012 cycle, new products like NGP VAN’s Social Organizing used social grid data to empower supporters of candidates like Elizabeth Warren to target the right friends for the right tasks (from voter IDs to GOTV to volunteer recruitment). In the coming years, we expect to create and see more products that allow campaigns to use the social capital of their supporters, delivered through apps that access the time capital of supporters—letting supporters help out when it’s actually convenient for them (on-demand social fundraising).

As we look towards the future, it’s also important to recognize that fundraising is changing, but we shouldn’t be distracted by the shiny bauble. We need to stay focused on results. Things like mobile and social will find a place, but despite the clickbait headlines pronouncing otherwise, email is not dead, direct mail is not dead, events are not dead, and call time isn’t dead either. For the vast majority of campaigns, call time is still going to be a primary source of funding.

In the same way that much of the Obama campaign’s innovation on the ground resulted in more efficient door knocking, innovations on the fundraising side will succeed by making existing tactics more effective.

Donations are the oxygen that campaigns need to survive. Since the passage of McCain-Feingold, the amount of money raised each cycle has grown exponentially, and we have yet to meet a campaign manager who doesn’t need to raise more. Having more money than your opponent doesn’t guarantee a win, but without money it is impossible to get your message out to voters.

As partisan vendors, NGP VAN and CMDI see the ability to work with our respective parties and act as the conduit of instructional knowledge as a serious privilege. And it’s our ability to capture and share this knowledge that will ensure our respective party committees and campaign teams keep innovating and moving forward.