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Eye On Candidates
October 15, 2015

Telltale Fundraising Reports Due Today

Candidates for president are required to file their fundraising reports with the Federal Election Commission by the end of today. The reports will provide insights on a key viability test, showing whether candidates have the funds necessary to mount credible campaigns for their party’s nomination. Bloomberg Politics this morning offers a piece explaining what to look for in the reports:

What to Watch as Presidential Candidates File Third-Quarter Fundraising Reports

Here's what smart analysts will be looking for in today's filings.

1. Who gets the most in small bills?

Since the last campaign finance filings, Republican presidential hopefuls Scott Walker and Rick Perry have withdrawn from the race. Between them, the two veteran state executives (Walker in his second term as governor of Wisconsin; Perry was the longest-serving governor of Texas) had a combined $39 million in independent political groups supporting them at the end of the first half of the year, proving outside super-PACs and their seven-figure check writers can’t keep a campaign afloat….

Small donations are a rare forward-looking indicator for the health of a campaign. A candidate can go back to small donors multiple times until they reach the $2,700 limit. The higher the portion of donations already “maxed out,” the smaller the fundraising base for the next quarter….

2. Who has the most investors?

The number of donors has also become a barometer of grassroots support and enthusiasm.

For example, Republican Ben Carson raised more than $20 million during the third quarter, according to his campaign. As much as the bottom line, Team Carson wanted to brag about the numbers beneath his effort: 350,000 donors giving 600,000 donations. 

Similarly, on the Democratic side, Senator Bernie Sanders of Vermont—who has raised a reported $26 million in third quarter, surprisingly close to the $28 million that Hillary Clinton's campaign says she collected during the same period—says he's attracted support from more than 1 million donors since starting his campaign….

3. Who's hot—and not?

Republican candidate Carly Fiorina says she raised $6.8 million in the third quarter, up substantially from the $1.7 million she raised in the second quarter. The number, which appears to put her just ahead of Senator Marco Rubio of Florida, suggests that her much-admired performances in the two Republican presidential debates so far have helped boost more than just her poll numbers. 

On the flip side, Democrat Lincoln Chafee has already acknowledged his financial support will show momentum in near-negative territory. Other candidates, most notably Jeb Bush, will be battling expectations. After raising $11.4 million in just 14 days after his campaign launched in June, a lower number could fuel speculation that Bush is starting to fade under the withering fire of Donald Trump.

The Wall Street Journal has a similar article suggesting some key questions that are soon to be answered by the fundraising reports:

For some candidates who started their campaigns after the last fundraising deadline—like New Jersey Gov. Chris Christie—we have yet to see any details of their fundraising. This will be the first quarter where all candidates can be compared on an even playing field….

One report we’ll be eyeing particularly closely is that of former Florida Gov. Jeb Bush. Mr. Bush has not yet put out his fundraising figure—unlike the last quarter, where he splashed out his number far ahead of the deadline—but his aides have said he raised more than the $11 million he brought in during the second quarter. Still, if Mr. Bush doesn’t do substantially better than last time—when he only had two weeks after starting his campaign to raise money before the end of that quarter—it will signal struggles are afoot for the former governor, who has held dozens of fundraising events, including many attended by his presidential family members…

How are candidates spending their money? In the second quarter, most campaigns were still getting their bearings, meaning their filings didn’t yet show the full breadth of their expenses. Now well into 2015, we should get a better idea of which campaigns are spending their money conservatively, and which are burning right through their stockpiles.

And while the media perception and buzz that will come out of the fundraising reports are important in terms of how candidates are viewed, the real question answered by the fundraising numbers is: Does the candidate have the resources to compete? Consider what the $20 million raised by Carson allows him to do, as reported in The Hill:

His pockets fat, Ben Carson is moving to leverage his enormous third quarter fundraising haul to capitalize on his run of success atop the polls.

Early in the cycle, critics questioned whether Carson would be able to compete with more established politicians in fundraising and campaign organization. Carson and his team believe they’ve put those questions to rest….

The campaign is putting that money to work, hiring dozens of additional staffers and plotting big-money ad buys in key states, according to Carson’s communications director Doug Watts….

Furthermore, the campaign is looking at a longer strategy that extends to the so-called “SEC primary states,” the half-dozen or so Southern states that will hold their primaries in early and mid-March….

In August, Carson’s team was made up of about 50 staffers. They’ve hired dozens of new employees since then, including field workers and regional directors in the early-voting states, as well as researchers and communications and policy advisers working out of campaign headquarters in Alexandria, Va.

The campaign has swelled to about 80 paid staffers, with another phase of hiring set to begin next month and peak by the end of the year.

Money isn’t the sole measure of viability, and in the past two cycles underfunded candidates have managed to become competitive by performing well in the Iowa caucuses, won by former Arkansas Gov. Mike Huckabee in 2008 and former Pennsylvania Sen. Rick Santorum in 2012. But they managed to do so by being far and away the most appealing and acceptable candidates to social conservatives, whereas in 2016 there are plenty of candidates who can credibly compete for that same voting bloc, making it more difficult for those two or any other candidate to rely on them as a base of support.

The third-quarter fundraising reports are likely to prompt several candidates to at least consider dropping out, particularly if they are also polling toward the bottom of the field. It’s probably not a question of whether anybody will drop out, but who and when. The answer to the latter is probably “when the checking account balance hits zero,” while there are at least a half-dozen possibilities for the former.