McAuliffe’s Money Blues

Do you believe that “Americans across the country are shamefully being denied their Constitutional right to vote” and that “we haven’t come as far since the early days of the Civil Rights movement as we often let ourselves believe?”

Are you “not for spending the whole surplus on tax cuts for the rich, not for repealing Roe v. Wade… not for discrimination against gays and lesbians, and not for spilling oil in Alaska or putting derricks in Yellowstone Park?”

If yes, Terry McAuliffe wants your money. And odds are over the next year, you will be identified, prospected, and solicited for a small contribution to the Democratic National Committee with a mailing that looks something like the ones quoted above.

The new chairman of the Democratic Party, and the greatest fundraiser in its history, is trying to do what the party never could: build a small donor base to rival the Republicans. For the past 30 years, it’s been an ironic embarrassment to Democrats that the party of the people, raised most of it money from the powerful. Soft money – donations that can be given in unlimited amounts for “party-building” but are increasingly used for direct campaign purposes such as TV ads — has kept Democrats competitive with the GOP. In 2000, for instance, although Republican Party committees raised almost $200 million more hard money than the Democrats, the DNC raised more than $243 million in soft money, about even with the GOP, and the two Democratic campaign committees brought in $120 million in soft money $26 million more than its GOP counterparts.

That is why there is some grumbling in the Democratic camp that the McCain-Feingold campaign finance bill – for years a politically attractive stance – may actually become a reality. The bill passed the Senate in April and the House version got caught up in procedural wrangling on Thursday, July 12. If it comes to a vote in the House, and passes, and if President Bush signs it into law (three big if’s), then soft money will be banned, and the mother’s milk of Democratic politics will dry up.

That possibility gives added urgency to McAuliffe’s ambitious goal to close the Democrats’ small donor gap. It’s now a necessary move, and to campaign finance reformers, a healthy one. “For both candidates and parties getting a lot of small contributors shows that you have a strong base of supporters,” explained Steven Weiss of the Center for Responsive Politics.

The idea that an expanded small donor base will put the “demos” back in the Democratic Party while keeping it competitive with the GOP, is appealing – but unrealistic. The hard demographic truth is that the folks who are likely to make political donations are not the level-headed little guys of middle America who swing general elections. They’re relatively affluent, disproportionately conservative, and on both sides overwhelmingly ideologically fundamentalist. It’s a combination that inherently favors the GOP.

Yet McAuliffe remains undaunted because as the 2000 election demonstrated to him, there are “more people who support us on the issues.” That may be, but attempting to catch up to the Republican small donor machine, could end up pushing the Democratic Party so far to the left that it repels the voters who actually gave Al Gore and Joe Lieberman that majority. As one veteran Democratic mail consultant described centrist, bipartisan politics, “great government, but terrible for the mail.”

Nevertheless, in just a half a year as chairman, McAuliffe already has put into the place what could end up being the most ambitious grassroots fundraising program in the party’s history. From February to the end of May of this year, the Democratic National Committee (DNC) has sent 2 million pieces of “prospecting” mail (letters to potential new donors), and plans to send anywhere between 10 million and 20 million pieces of prospecting mail through early fall. On top of that, between 500,000 and 750,000 people in the DNC’s 1 million-donor database are mailed regularly for additional contributions. The DNC is also hitting the phones, with seven phone banks working seven days a week; three of them are prospecting, and four are raising off past donors. Rounding it out, the DNC now has a dedicated staff member for Internet fundraising, and has begun to mine that medium, recently sending a fundraising e-mail to 125,000 donors. With the wind of the recount controversy still in its sails, the DNC has broken party records, raising $7 million in the first quarter of this year, putting it on track to raise $10 million by the middle of the year, and all with an average mail donation of about $35. By past Democratic standards, these numbers are impressive. Yet they pale in comparison to the GOP’s. According to a Republican Party spokesman, from January through April of this year, the Republican National Committee (RNC) raked in $22.5 million through its direct marketing program, comprising almost three-quarters of all the hard money the party raised, and they raised this money with an average contribution of $38.56.

The inherent virtue of regular people giving small amounts to a political cause is a belief almost as old as American political parties. In 1840, Henry Clay wanted to create a national Whig organization in which each member would contribute a cent a week. Neither Clay nor the Whigs lasted very long. In 1916, William Jennings Bryan hoped to attract 1 million contributors by mail to the Democratic Party. Only 20,000 responded, and the costs of the program were barely recovered (a problem that would plague Democratic efforts decades later). And in 1952, Adlai Stevenson started the Dollars for Democrats program, a door-to-door soliciting campaign which generated more volunteers than money.

But, as the political scientist Frank Sorauf points out, these efforts were exceptions. In the first half of the last century, most money was raised in large amounts from a small group of contributors. That all changed in the 1960’s with the confluence of new technology such as computers and reliable opinion sampling; higher costs from the price of television ads; and candidates who could not rely on the largesse of the establishment.

It was the troika of Barry Goldwater, George Wallace, and George McGovern who first proved the power of small donors. Goldwater raised $5.8 million from 410,000 contributors, mostly through direct mail contributions that averaged $14. In 1968, contributions of $100 or less financed three-quarters of Wallace’s run, and in 1972, McGovern raised close to $15 million from between 650,000 to 700,000 donors.

The Democratic Party, however, did not build on this part of the McGovern legacy, but rather on his legacy as head of the McGovern-Fraser Commission which undertook a historic revamping of the party’s rules and nominating procedures which enabled the New Left to take on and take down the party establishment. They succeeded in closing down the proverbial smoke-filled rooms and in bringing more women and minorities into party politics, but this new breed of activist was more committed to its cause than to the overall health of the party. The result? Democrats spent the decade destroying the party apparatus, not building it.

The Republicans’ demise was quicker, if not less painless. Watergate decimated the GOP, and in trying to rebuild their party, Republicans were willing to try something relatively new. What happened, as the University of Virginia’s Larry Sabato put it, “they hit the mother lode.” With Bill Brock raising the money to fund it and Paul Weyrich and Richard Viguerrie orchestrating, the RNC built up an impressive small donor fundraising operation. For the rest of the decade, the party turned inward and focused on traditional party activities: recruiting candidates, building the organization, and winning elections. And although the New Right had its battles with the party establishment (Reagan’s 1976 challenge to Ford, for one), the Republicans being Republicans did not indulge in nearly the same fratricide as their Democratic counterparts.

As a result, in 1980, the RNC more than quadrupled the $8.9 million it raised in 1975, and throughout the late 1970’s, the Republicans raised 75 percent of its receipts from direct mail. By 1985, with Reagan in the White House, the Republican campaign committees raised more than four times as much as Democrats.

By comparison, heading into the 1980’s, the DNC was still paying off the debt from the 1968 Humphrey campaign and was undernourished as party committees traditionally are when they have a member in the White House. That all began to change when Representative Tony Coelho took over the Democratic Congressional Campaign Committee in the early 1980’s. Wanting to build a small donor base, in 1985, Coelho and his finance director, Terry McAuliffe, invested heavily in the project. But in the end, the DCCC only netted $900,000 from the effort in 1985, and $1.5 million a year later. The real money — as Brooks Jackson documents in his behind-the-scenes account of DCCC fundraising, Honest Graft – was in larger PAC checks and increasingly in soft money donations to the party that did not have to abide by federal contributory limits. Quickly, that money became the base on which the Democratic Party was built.

Yet, the Democratic Party still aspired to be a party of small donors. When Don Fowler took over the DNC in 1995, he decided to focus on growing the small donor operation. It was a good time to start for two reasons: Clinton was in the White House which made it easier to raise the seed money to get it going, and Newt Gingrich was in the Speaker’s chair.

“Everybody hated Newt Gingrich,” recalls Fowler, “he’s the best fundraiser the Democratic Party ever had. We’d send out letters saying what an S.O.B. he was, and the money would roll in.”

And it did. As part of the Clinton-Gore re-elect effort (which McAuliffe chaired), the DNC sent out prospecting mailings to 50 million people from 1995-1996, bringing the Democratic donor list to 1 million, and raising $26 million in 1996. The DNC would have raised more, but with Clinton doing so well and crisis apparently averted, giving collapsed. When crisis returned, so did small giving. In January of 1998, the month that Monica Lewinsky was introduced to the world, the DNC raised $1.5 million from direct mail, it highest monthly take since the previous election, and the following year, in the wake of Clinton’s impeachment, the DNC took in another $2 million in one month.

McAuliffe has not given up on the small donors he went after with Coelho 15 year ago and with Fowler in the mid-1990’s. Part of it is principle, but part of it is political reality. No longer can the Democrats swoop into a city with the President or Vice President and scoop up a bunch of quick cash (or invite big corporate donors over to the Vice President’s residence as its current occupant recently did), and if McCain-Feingold becomes law, the amount scooped up will be seriously limited anyway. Yet the small donors route is not the path to parity with the GOP. Simply, raising millions of dollars from the grassroots is expensive, time-consuming, and by design impossible for Democrats to do on the same scale as the Republicans. Fundraisers know that finding new donors is a tall order. “If you are looking for new blood, even if it’s small donor blood, you’re squeezing turnips,” explained Joe McLean, a Democratic fundraiser and strategist.

And if you look at who actually gives to political candidates and parties, you’ll find that there’s fewer Democratic “turnips.” According to the University of Michigan’s National Election Studies, only about 7 percent of those polled donated, a figure that is fairly consistent from 1956 to 1998. Digging deeper to see who makes up this tiny minority, you’ll find that it looks more like a country club, than a union hall.

A Joyce Foundation-funded study of donors to congressional races in 1997 found that nine out of ten donors were white, 81 percent made over $100,000 a year, and a similar number were male, college-educated, and over 45. Meanwhile, one-half identified themselves as conservative, and one-third as liberal.

Simply, the average Democrat has a lot less money than the average Republican. And according to a recent study by the American Association of Fundraising Counsel Trust for Philanthropy, those making less than $50,000 a year are already donating an average of $661 a year to charity, about as much as they can. When more than half of Americans don’t even vote, why should we expect them to give a dime to any political organization? Political apathy runs deep, and most people’s pockets don’t.

This basic structural dollar divide makes it virtually impossible for the DNC to match the RNC’s small donor fundraising effort. Ironically, it costs more to raise small amounts of money than larger amounts. Since the Democratic Party has less at its disposal, it has resorted to husbanding its resources to be competitive with the GOP, slashing staff and spending all of its money (and often going into debt), for a full-scale push each election cycle. The Republican Party, by contrast, has a steady flow of big donations, money which enables it to run at full steam in off-years. In turn, the GOP is able to operate as an electioneering and on-going base maintenance organization. Money comes in and direct mail goes out, and the cycle continues in a virtual perpetual political money machine.

But it’s not just that the Republicans are richer that works in their favor. It also helps that they’re angrier. From temperance to civil rights to environmentalism, the great movements of American history have all revolved around moral issues, not economic ones. And despite what President Bush may do to the courts, the liberal culture – more secular, tolerant, and inclusive – has emerged as the winner in the cultural war. Conservatives are the angry dissidents who are on the defensive. Believing in absolute truths (such as homosexuality is wrong because the Bible says so), they are easier to incite to action than someone with a more relativistic outlook of “live and let live.” And anger is the best ally to have in the direct mail wars.

Centrist positions may win votes in the ballot box, but they’re losers in the mail box. It’s a huge jump in commitment to get someone to go from casting a ballot for you to writing you a check, and what pushes people is crisis (abortion rights will be overturned, your gun will be taken away, a nuclear waste dump will be put in your backyard). Take the Democratic Leadership Council (DLC): in the late 1980’s, it attempted a direct mail fundraising effort. It failed miserably, but DLC ideas helped put Clinton in the White House twice.

And that is the crucial hidden cost to investing in a small donor, direct marketing operation. The more the party relies on this type of fundraising, the more it’ll have to rely on hyperbolic pitches and extreme policy positions – it’s the only way to keep its most ardent members giving. This may energize a core group of supporters who are crucial to getting out the vote, filling campaign rallies, and battling equally partisan opponents on talk radio. But it also pushes the party to the extreme – a move that is neither good for the Democratic Party nor for democracy.

Both the Republicans and the Democrats have seen what happens when the party apparatus marches out of step with the electorate. In the 1980’s, bitter fights over platform language and party rules by small groups of activists only bolstered the perception that the Democratic Party was too far to the left, especially on social and foreign policy issues. It got so bad that in 1985, DNC Chairman Paul Kirk abolished the midterm party conference, and his successor, Ron Brown, made it clear in one of his first acts of chairman, that the endless rehashing of party rules and nominating procedures would end.

In the 1990’s, it was the Republicans’ turn to have its base bite back. Conservatives angry about Bush pere’s bi-partisan effort to get the deficit under control (a tax increase) fueled Pat Buchanan’s candidacy in 1992. The “Republican revolutionaries” of 1994 – who grew out of the party’s right-wing grassroots — over-reached in their assault on the federal government, and became an albatross around Bob Dole’s neck in 1996. Only when George W. Bush ran a race in which he appeared to be of the center did a Republican get enough votes to claim the White House.

The two parties’ swerves onto the shoulders of American political debate have undermined the strength of the party system, and by extension, our democracy. One-third of Americans identify with neither political party because they see the Democrats and the Republicans as too far to their respective extremes. Some have even argued that the divided government that has predominated since 1968 is a direct result of voters trying to concoct a political mix that reflects their tastes.

Of course, the DNC will not rely totally on a small donor base, and the more people that do get involved in a party, usually the better. However, mailing and dialing for dollars in small amounts is not about building a broad-based party. Indeed, it’s not a democratic exercise at all. It’s about targeting a very small, elite stratum of people with relative means and relatively inflamed passions. Small donor fundraising prowess does not make a party strong; that is, an effective channel of political beliefs into governmental action. Rather, it pulls a party to the extreme, further alienating American voters.

Then again, this is the paradox of American democracy. It takes money to have parties, but raising money puts parties either in the pockets of huge interests or at the mercy of the passions of a minority. By banning soft money, the McCain-Feingold bill will limit the appearance of corruption, but it does not sever this link. Indeed one of the ironies of McCain-Feingold is that in its effort to get big money out of politics and restore the public’s faith in the political system, it could force the parties to rely more on inflammatory appeals to a small minority of the electorate, the sort of partisanship that turned people off from politics in the first place.

Further reform, such as free broadcast air time or even partial public financing of elections, could help the parties out of this box by reducing the current costs of politics. It would enable the Democratic Party to stay competitive with the GOP by making sure that it has the basic tools to get its message out. But make no mistake, the river of money will still find a place to go.

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Kenneth S. Baer, a former senior speechwriter to Vice President Al Gore, is an adjunct professor of government at Georgetown professor and author of Reinventing Democrats: The Politics of Liberalism from Reagan to Clinton (University Press of Kansas).

Kenneth S. Baer, a former senior speechwriter to Vice President Al Gore, is an adjunct professor of government at Georgetown professor and author of Reinventing Democrats: The Politics of Liberalism from Reagan to Clinton (University Press of Kansas).