Obama's Donor Base: A Partial Revolution, At Best

Jose Vargas rightly got a lot of attention last week for the stunning numbers he was given by the Obama internet team about their online success. As he reported: "3 million donors made a total of 6.5 million donations online adding up to more than $500 million. Of those 6.5 million donations, 6 million were in increments of $100 or less. The average online donation was $80, and the average Obama donor gave more than once."

This looks and sounds like a revolution in how presidential campaigns can be financed, but now comes a valuable reality check, from the Campaign Finance Institute, run by veteran campaign analyst Michael Malbin. At first glance, the foundation of Obama's fundraising juggernaut looks like no other successful modern presidential campaign: About half of his money, 49% to be precise, came in discrete donations of $200 or less. Typically, winning presidential candidates have relied much more heavily on the proverbial fat-cats, big donors who write four-figure checks and bundle in similar amounts from their friends, colleagues, coworkers and so on. In 2004, 31.6% of George W. Bush's donations were in amounts of $200 or less, for example, according to the Center for Responsive Politics.

But Malbin and CFI point out that we shouldn't conflate small donations with small donors, since many people gave more than once. After identifying repeat donors and then categorizing each donor by the cumulative amount they gave over the whole election cycle, CFI reports that "only 26% of [Obama's] money through August 31 (and 24% of his funds through October 15, according to the most recent FEC reports) came from donors whose total contributions aggregated to $200 or less. Obama's 26% compares to 25% for George W. Bush in 2004, 20% for John Kerry in 2004, 21% for John McCain in 2008, 13% for Hillary Clinton in 2008, and 38% for Howard Dean in 2004."

So, does this mean Obama ended up as dependent on large campaign contributors as past presidential contenders? Not exactly. CFI found that he raised 27% of his money from mid-range donors who gave between $201 and $999, compared to 20% for McCain and 13% for Bush in 2004. In terms of people giving $1000 or more, Obama received 47% of his money from this well-off group, compared to 56% for Kerry in 2004 and 60% for both Bush and McCain. So, in relative terms, he wasn't quite as dependent on the biggest fat-cats as the others.

But, CFI notes, about $210 million of the total Obama raised through the end of August came from large donors, compared to $119 million from small donors. "The comparison should make one think twice before describing small donors as the financial engine of the Obama campaign," Malbin notes. True, but until we have the full picture including the massive monies Obama raised in September and October of 2008, this statement has to be taken as provisional.

The most interesting finding of the CFI analysis is how many of Obama's donors started out "small" and then, by giving repeat donations, became mid-range or large givers. This, no doubt, is where the online revolution probably had its biggest influence, because now it is so easy to move from information to motivation to action, with just a click or two of a mouse:

Many of the repeat donors who started off small ended up in the $201-$999 middle range. Among Obama's total pool of 403,000 disclosed donors on August 31, more than half (about 212,000) started off by giving undisclosed contributions of $200 or less. About 93,000 of these repeaters gave in cumulative amounts of no more than $400 for the full primary season. Another 106,000 repeaters ended up between $401 and $999. Finally, not many of Obama's 212,000 small-donor repeaters ended up in the top group. Despite colorful press stories, only about 13,000 crossed the $1,000 threshold in their cumulative contributions.

At the same time, Malbin notes, much of Obama's large donations were raised the "old-fashioned" way, via bundling. "The bulk of Obama's $213 million in large-donor contributions during the primaries came from about 85,000 people who started out giving big and stayed there," he writes.

So, was this a new kind of public financing, or were Obama's small donors the campaign finance equivalent of lipstick on a pig? Clearly, as Malbin writes, "the reality does not match the myth." Indeed, as Thomas Ferguson pointed out several months ago, Obama's early money--the critical contributions he raised in 2007 before he pushed Hillary Clinton aside in the early primaries--came heavily from the financial sector.

I'm assuming CFI will do one more analysis of the data once all the numbers are in, but that the pattern they identify here probably won't change much. Which means that Obama's 2008 campaign was only a partial revolution in campaign finance: he had more donors than any in American history, and more itemized donors (people giving more than $200) than all the candidates combined in 2003-04. But he didn't eliminate the importance of large contributors to presidential campaigns; if we want to end the dependence of public candidates on large private donors, we still need real public financing of elections.