Thursday, October 15, 2009

Fundraising Numbers - The Rest of the Story

Every quarter, federal candidates rush to get as many donations in as possible for their campaigns. Though not something that matters with the electorate at large, political insiders right and left pay a great deal of attention to them.

In reviewing the reports, it is important to remember a couple of things. First of all, do the campaigns have enough to compete? Second, if it's a new campaign, at one pont in the quarter did their fundraising clearly start, and what pace are they on?

Our view is this: As long as a campaign is on a good pace and/or has enough money to do what they need to do campaign wise, it matters little who outraised who except for bragging rights. The reason is that you have basic political factors such as the ideological makeup of a district, as well as the mere fact that there is only so much money you can spend on advertising, mailings, etc, before you have diminishing returns.

For example, if two candidates for a Congressional seat are running -- and one has $300K and one has $600K, the $300K person will probably be fine as long as his pace is solid. The key is that Candidate A has enough money to accomplish their campaign goals. So, political watchers should beware of taking too much out of reports, particularly in September 2009. The key report will be on July 15 of 2010 for the primary and October 15, 2010 for the general.

With that being said, here are some notables:

US Senate Race
Jerry Moran had over $3.1 million cash on hand coming in, and raised another $520,000 according to an email. Todd Tiahrt had $1.5 million coming in, and his campaign has yet to release figures.

This is a good example of not putting too much of a story into the gap. Assuming that Tiahrt raises a good amount of money in the 3rd Quarter as well, he has plenty of money to run a great campaign. Moran is more of the establishment candidate, so it is not surprising he has more money. Tiahrt is more of the grassroots candidate, but he has plenty of money to run in a low-media market state like Kansas, particularly in the primary cycle.

We believe this race will be decided not in what money these candidates have -- as they both have plenty, but in how well that money will be spent -- messaging, grassroots, etc. We'll see!

1st Congressional District
Tim Huelskamp announced the other day he had raised an impressive $181,000, which will add onto the $235K he had coming in. His website indicates he has almost $380K on hand, plenty (particularly with two more quarters to follow) to do everything he needs to do in a primary election, which is the race in the Big First. The other reports are not announced yet, but from our vantage point, Huelskamp clearly is in the drivers seat here -- this is a case of a district having an idelogical makeup that clearly favors Huelskamp, and given his strong grassroots conservative support, he has plenty of money to continue as the clear front runner.

3rd Congressional District
This is a completely different situation than the Senate or Big First races, as no candidates had done ANYTHING as of June 30 -- versus candidates in other races who are either long time incumbents or who have been in the race since the beginning of the year or before. In this quarter, we had Patricia Lightner, who entered the race in late August, as well as two other candidates, John Rysavy and Daniel Gilyeat, who have been out for about two months a piece.

So, in these cases one can't look at the overall number because the candidates have only been out for, in some cases, two to three weeks with any kind of fundraising operation or even a campaign, period. This is a case where one has to look deeper at the report for the real story.

In this case, looking at the current frontrunner, Patricia Lightner, what you can see is quite impressive. She got in the race with a website in late August, and as we've discussed on this blog, at least 15 candidates have been rumored, and it was unclear who was going to run and not run. It also takes time to get any kind of fundraisinge opeartion going.

Still, in that environment, she raised $35,000. More specifically, when you look at her report, you see that the vast majority of her contributions came in the last week of September, just as the race was beginning to define itself. She raised about $16,000 in individual contributions (plus the $18,500 she put in herself), and a quick look at her report shows at least 75-80% of those were in the last week. If you extrapolate it out over a full quarter, that is just slightly behind Huelskamp, who is probably the high water mark for conservative candidates. As the race continues to define itself and as people stop saying "its early", her pace could very well pick up and she will be at a good pace to compete with Moore.

Trailing her was John Rysavy, who had about $10K on hand, and had loaned $8500 to himself. Gilyeat has yet to file, as of the time of this email.

In a subsequent email, we'll examine the situation in the 4th District, where Raj Goyle has apparently raised $400,000 as a Democrat in a seat perceived as safe, and where at least 5 Republicans are running -- as well as in the 2nd, where Laura Kelly just recently announced she is running against Lynn Jenkins, who has a fiscally conservative voting record but is mixed on social issues.

In all of these reports, it's always best to see one, the pace the candidate is on; two, do they have enough to compete; three, when they entered the race. That's more important than simply looking at overall numbers and comparing candidates.