How to Raise the Money You Need to Win Your Election By Joe Garecht www.localvictory.com Class Guide #1: The Fundamentals of Successful Campaign Fundraising
Welcome to our class How to Raise the Money You Need to Win Your Election. I am so glad that you will be joining me for the next six weeks to learn the secrets of successful political fundraising. As you probably already know, my name is Joe Garecht and I am the founder of Local Victory. Over the years, I have worked with dozens of political campaigns to help them win. I have raised millions of dollars for campaigns both on staff and as a consultant, and have experience fundraising on the local, state, and federal levels. During this class, I am going to be sharing with you everything I know about finding, communicating with, and asking donors to contribute to your campaign through a wide variety of tactics. The strategies that we will be talking about during this class apply to every campaign, no matter how small or large. They also apply regardless of party affiliation they work for major party candidates, third party candidates, independent candidates, and everything in between. While we will be talking primarily from an American campaign perspective, most of the strategies we will be discussing apply to international campaigns as well. I have had the pleasure of working with numerous international candidates where we won using the very strategies we will be discussing during this course. Remember, if you have any questions about what you are learning, please feel free to e-mail me at any time at joe@localvictory.com and I would be happy to answer. Each week on Tuesday, you ll be receiving a class guide (just like this one) as well as an MP3 podcast. You have lifetime access to the materials. This week, we re going to be talking all about the basics of successful political fundraising. If you re a political pro who has been through dozens of campaigns, some of this information might seem a little bit basic that s ok. Review it and see if you can glean any new ideas for your campaign(s). Starting next week, we ll be going through more advanced strategies for each aspect of campaign fundraising, from finding donors to raising money online (and everything in between). Before we begin the material, here s a reminder: This class is not intended as legal advice. Political campaigns, and particularly political fundraising, are highly regulated by national, state, and local laws, court and administrative rulings. Before starting your campaign, check with your local political party and both your state and local boards of election to determine which laws and rules are applicable to your campaign. Whenever possible, seek out the advice of a local attorney who works with political candidates and who knows the pitfalls involved in running for office in your jurisdiction. Remember, you have the right to run for office, and the responsibility to follow the law. Never, ever break the law in attempt to gain an advantage in your election. It s not worth it, and not worthy of the high honor of holding elected office. 2016 by Joe Garecht. All rights reserved. 2
This class not legal advice, and though it contains state-of-the art information and knowledge on winning campaigns from a recognized expert in the field, neither this class, nor any class, book or program, can guarantee that you will win your political election. Let s Start from the Beginning: How Do You Feel about Fundraising? Fundraising... few candidates like to do it, because few candidates take the time to really understand what fundraising is all about, learn the concepts, and apply them in real life. Fundraising is like sales everyone wishes they were good at it, but feel like they re not. As with sales, most people think I m either great at fundraising or I ll awful at it and nothing will change that. They try and make a few calls, feel awkward, and declare to themselves that they aren t great fundraisers, and then spend time looking around for someone to do the calls for them some magic fundraiser, consultant, or money guy who will make all of their problems with raising cash go away. If this describes you, or your candidate, then you may be surprised to learn that very few candidates or politicians heck, very few people in general are naturally good at fundraising (or sales!) Most of the politicians you see who raise millions of dollars each cycle started out right where you are now assuming that they weren t good at fundraising and nothing they could do could change that. What separates successful fundraisers from the non-successful masses isn t innate talent, it is curiosity, study, and practice that s right, successful fundraisers aren t born, they are made. Candidates that raise lots of money do so because they took the time to learn how to fundraise. Almost anyone can follow in their footsteps, because almost anyone can learn how to be a successful fundraiser. But be warned getting good takes time and practice lots of it! Candidates, campaign staffers, supporters and consultants who want to become successful fundraisers need to spend time in the trenches learning how to set up fundraising programs and make asks. Then, they have to fight through the awkwardness of the first few (or dozen, or hundred) tries. It won t feel natural, it will feel scripted, embarrassing, silly and strange. But those political animals who get through their fear, learn the science of fundraising, and practice it over and over again will get to a place where they feel comfortable with fundraising, and are truly proficient in their craft. Fundraising Isn t a Dirty Word! The first concept aspiring fundraisers, candidates, and finance committee members need to learn is this: fundraising isn t a dirty word. Sure, there have been lots of people throughout political history who have misused political fundraising. There have been bribes, illicit payments, misuse of funds, quid pro quo donations, and all sorts of improprieties. Add to these the fact that we have all seen candidates and elected officials who were so wrapped up in raising money that they forgot what they were sent to city 2016 by Joe Garecht. All rights reserved. 3
hall or the capitol to do, and it is easy to see why political fundraising draws so much resentment and criticism. That being said, to all of those who think that all fundraising is a dirty business I say: how can it be? Think about this for a minute I mean, really think about it. The most important decisions of our day are decided in the political sphere. Each day, parties, politicians, interest groups and communities duke it out in state houses and town halls around the country fighting for what they believe it. And that is exactly the way it should be I know, I know it is very fashionable these days to talk about how un-civilized political discourse has gotten, and to decry that people who are elected don t just get along. But wait a minute! Do you really want people to go along and get along when they are deciding the future of our nation, our state, our city, our world? Whether you are a progressive or a conservative, don t you want there to be a battle over the size and role of government? Or do you think we should just agree to disagree and come up with a lukewarm compromise? What about civil rights? Abortion? Education policy? Health care? No matter which side of each of these debates you come down on, aren t they important to argue about? Aren t they big enough, don t they impact enough lives to warrant our passion and emotion? Sure, if you re talking about whether or not to put a four-way stop sign at the corner of Main and Elm Streets, take it easy and come up with a compromise. But how to go about stopping the influence of drugs in our schools? I say, get passionate and work it out in the arena through a battle of ideas. So what does all of this have to do with fundraising? Well, if we can agree that the biggest questions of our day are decided in the political arena, and that these questions are so big and so important that they should be argued about, the next step is to realize that effectively arguing your position takes money. When two candidates are running against each other, they are presenting two different and competing visions for the future in front of the electorate. They spend months, or even years, campaigning for the job, hashing out the issues in front of a public audience, trying to get their messages across. These efforts take money and lots of it. The vast majority of candidates can t self-fund, so they need to raise money in order to argue for what they believe in. Fundraising isn t an inherently dirty business, despite the presence of a few bad actors. Instead, fundraising is the lifeblood of our national debate on the future of our country. If you re running for office and you think raising money is bad, think of it this way: Your ideas are important, aren t they? Why are you running for office? What do you want to accomplish? Are the issues you are raising important? Are they vitally important to your children s future? To your nation s future? Unless you can self-fund, you will not be able to get your message, issues, and vision out without fundraising. If the issues and vision you are discussing are this important, isn t it worth fundraising to get your message out? You re not fundraising for 2016 by Joe Garecht. All rights reserved. 4
yourself you re fundraising to win the election and make a better future for your children and your country. Fundraising needn t be a dirty word! Now that we ve gotten that out of the way, let s go over 6 key principles that are important to understand if you want to run a successful fundraising program for your campaign: Principle #1: Plans Matter Most campaign organizations get started on a wing and a prayer the candidate and her friends and supporters pull the campaign together and will the organization into existence, raising whatever is needed to start the campaign through personal connections, and maybe an event or two. The campaign gets off the ground, and low and behold, the fundraising activities continue, without much of a plan. As the campaign grows, some plans get sketched out (usually revolving around when to hold events or send out letters) but they are done piecemeal and often without much thought to a comprehensive strategy. Then, in the heat of battle, everyone will run around raising money however they can to meet campaign finance deadlines and ad buy budgets, crashing into a heap the day after Election Day, promising never to raise money again. The process outlined above is a mistake, yet it s the way most first-time candidates handle fundraising. Having a good plan matters for your fundraising efforts. A plan guides your efforts, makes sure everyone is on the same page, defines which activities you will carry out and which you will avoid, and provides a reference point in the heat of battle, allowing you to look at the overall strategy in the midst of daily activities and issues. A good fundraising plan: 1. is written down. Fundraising plans that exist only in the mind of the finance director or candidate are apt to fail. 2. is constantly evolving. Don t write a plan and expect it to last for the next two decades, or even for the entire ten months of your campaign. You will need to take your fundraising plan out and look at it and tinker with it on a regular basis. Things change so should your plan. 3. clearly defines goals and deadlines. A plan that simply says We will send out direct mail pieces twice this campaign cycle is a recipe for failure. Far better to say, We will send out a direct mail piece the third week of February and the third week of September this year. The finance director will be responsible for writing the copy and developing the lists, and our print shop will handle design, printing, and mailing. Does your campaign have a written fundraising plan? When was the last time you looked at or updated it? 2016 by Joe Garecht. All rights reserved. 5
Principle #2: Fundraising Is Everyone s Responsibility Because fundraising is so important to the success of your campaign, it needs to be made clear to your entire team that fundraising is everyone s responsibility. Yes, you should have a finance director or fundraising team that spends 100% of their time fundraising (or, in smaller campaigns without a fundraising staff, a campaign manager who spends a significant portion of his/her time raising money), but everyone should have assisting with fundraising as part of their job description. For your field staff, this means that they should be willing and able to help with setting up local fundraising events and with putting the campaign in touch with potential donors that they meet on the campaign trail. It also means that your field staff should constantly be on the lookout for fundraising opportunities in the course of their daily responsibilities. Likewise, everyone on your finance committee and all of your advisors should be expected to help fundraise. This means making personal asks, selling tickets to events, and providing contacts for your fundraising mailing list. Yes, some advisors may be primarily responsible for fundraising (such as your finance or event committees) and some will not take a leading role with fundraising (focusing more on strategy, media, labor outreach, etc.) but everyone on your team should understand that they are expected to help with fundraising by introducing the candidate to anyone they know or meet that has the potential to donate. Because you are expecting your everyone involved with the campaign to help with fundraising, and because these folks may not have a fundraising or sales background, it is imperative that you offer fundraising training to your staff, advisors, finance committee and other key personnel. My suggestion is that you hold training sessions to teach your non-fundraising team members how to help with fundraising, how to introduce the finance staff to potential donors they meet, how to know if someone would be a good donor for the campaign, etc. Does everyone at your campaign understand that fundraising is part of their job description? Does everyone on your board help with fundraising? Principle #3: The Candidate Must be the Fundraiser in Chief No matter the size of your campaign or your fundraising goals, the candidate must be the fundraiser-in-chief in your campaign. The candidate must be making the biggest asks, must be working the phones, must be doing the meetings that will lead to major donor contributions to your campaign. Fundraising is everyone s responsibility, but no one more so than the candidate. In any campaign, the candidate should be spending 25-50% of his or her time fundraising. During the start-up phase of the campaign, when money is the most difficult to come by and the grassroots efforts haven t really started, the candidate should be spending 50-75% of his or her time fundraising. 2016 by Joe Garecht. All rights reserved. 6
If you want to know the health of a campaign during its start-up phase, take a look at the candidate s daily schedule. If the vast majority of his time is not blocked out for fundraising calls, meetings, and events, the campaign is in trouble. When I see a candidate who spends the majority of his time early in the campaign going to political meetings, holding non-fundraising rallies, and on the phone in strategy calls, I know that the campaign is headed for trouble. The candidate any candidate must be the fundraiser-in-chief for his or her own campaign. Principle #4: The Best Fundraising Efforts are Scalable Cultivating prospects and making asks takes time. If you only have one fundraising person on your staff, there s a limit to the number of new prospects he or she can contact or the number of asks he or she can make on a weekly basis. Similarly, holding events, raising money online and sending out mail takes time. No matter how many fundraising folks you have on your staff, there will never be enough time or resources for them to reach out to every person or PAC in your community for financial support. This is doubly true for the candidate as he or she makes fundraising calls and holds fundraising meetings there s never, ever enough hours in the day! Getting your advisors, volunteers and entire staff involved in your fundraising certainly helps, but it is still not enough. You ll still need more help to raise the money you need to win. That s why the best fundraising efforts are scalable meaning they are designed in such a way that you are able to recreate them over and over again while getting others to do your fundraising for you. For example, one county political party I know puts a special focus on getting finance committee members and other friends of the party organization to host fundraising events on the party s behalf. This party committee has only one full time fundraising staff member, who could never coordinate more than a couple of small fundraising events per year, given her additional work load. So, she put together a how to hold a fundraising event for our campaign guide, along with a set of pre-packaged materials like plug-n-play event invitations, an evite template, and guidelines for putting together an event host committee. The county organization uses this kit to help it scale its fundraising efforts, and last year held over two dozen small fundraising events around its region that raised 25% of the local party s overall budget for the year. Another example of a scalable fundraising effort is an affinity group. Many campaigns have found great success putting together Young Friends of or Doctors for or other types of affinity groups for their campaign that go out and hold events and raise money on a volunteer basis, which allows the campaign to spend time on other fundraising efforts while the affinity group multiplies its efforts by working in parallel on different fundraising projects. How scalable are your fundraising efforts? Have you built affinity groups? Are you making it easy for other people to fundraise on your behalf? 2016 by Joe Garecht. All rights reserved. 7
Principle #5: Relationships = Success One very important principle that every campaign needs to understand is that building strong relationships = fundraising success. Fundraising is all about relationships. Sure, you can buy a direct mail list and send out a fundraising appeal and make money, but the real money comes on the back end, as you develop relationships with those donors who responded to your initial prospecting letter. Ditto for personal asks, major fundraising events, online fundraising the real money is in the relationship. Your candidate, fundraising staff, and your finance committee should all be in the relationshipbuilding business. That s why the fundraising funnel that we ll talk about below is so important. The goal of your fundraising efforts should be to identify people who might want to donate to your campaign if they knew more about it, and then to develop a relationship with them through cultivation activities. It is only after the relationship is built that an ask should be made making an ask before there is a relationship might lead to a gift, but it will be far smaller than one that is made after the relationship is established. One a relationship is established and a gift is made, the campaign will need to work hard at stewarding the donor to maintain the relationship in order to receive follow up gifts as the election cycle progresses. Stewardship is doubly important for ongoing political committees and PACs that are seeking annual donations from key supporters. Donors want to feel like a part of your team. When they do, they will be inclined to give again and again. Build relationships with your donors, and turn them into friends for life (or at least for this entire campaign cycle). Principle #6: People Won t Give Unless You Ask Them To! You d be surprised how many candidates and political campaigns think that once they announce their candidacy, the money will just come pouring in. The truth is, it never does. The only way to raise money is to go out and ask for it. Also, bear in mind that asking for money does not mean saying, I hope you will support my campaign. Fundraising is always a question, not a statement. Will you support my campaign? is better, but not quite there. Will you contribute $1,000? is a real fundraising ask. We ll talk more about how to make a strong ask in Week #3 of this class. And remember your campaign has to be the one making the ask. Don t rely on your local political party to raise the money for you. Your fundraising success is in your own hands. If the party comes through with money or help, great it s icing on the cake. However, you can t rely on receiving that help. Make sure that your campaign takes responsibility for its own success. Remember, if you lose, you ll be out of business, but the party will still have its job count on your own team to make sure your fundraising is successful. 2016 by Joe Garecht. All rights reserved. 8
The Political Fundraising Funnel One of the biggest mistakes first time political candidates make is thinking that once they declare their desire to run for office, they can just pick up the phone and call the usual suspects to ask them for money. Likewise, many candidates think that after someone makes a donation, they can deposit the check into the campaign checking account, and then never talk to the donor again, at least until the campaign needs another donation. Seasoned political candidates know the truth: that cold calls rarely work, and that donors expect communication with the campaign both before and after making a donation. Much as with any type of fundraising, political campaigns need to draw donors through a fundraising funnel in order to maximize the amount the campaign raises. What Is a Fundraising Funnel? A fundraising funnel is simply a process for finding new donors for your campaign and building a relationship with them so that they want to give to your campaign. The political fundraising funnel has four steps: Step #1: Prospecting Prospecting is the process of finding people who are likely to want to donate to your campaign and making contact with them for the first time. Despite what you might think, this process normally does not involve simply picking up the phone and dialing through a list of political donors who you have never met before. Instead, it starts with people the candidate already knows people the candidate has worked with, is related to, is friends with, or knows socially. This list of prospects extends out from the candidate s personal connection to his or her spouse s connections, as well as new relationships built through the Finance Committee. The campaign should also have plans in place to constantly bring new prospects into the candidate s orbit. This means finding ways to make warm introductions to new potential donors so that the candidate can build a relationship with them. Step #2: Cultivation Cultivation is the process of communicating with your prospects and building a relationship with them. This is the step of the fundraising funnel where most campaigns fail they want to move straight from meeting a new prospective donor to asking him or her for money. Cultivation must always come before the ask. 2016 by Joe Garecht. All rights reserved. 9
If you want people to make a donation to your campaign, you need to make sure they feel like part of your team. This is particularly true if you want them to make a large donation or to give on a recurring basis. The way you make people feel like part of your team is by talking to them, inviting them to events, sending them your campaign s e-newsletter, and getting them involved. Of course, unlike many other types of fundraising, when it comes to political fundraising you are dealing with a very condensed schedule the money needs to be raised (and spent) before Election Day to have any impact. Thus, while every donor should be cultivated before being asked, this cultivation process shouldn t take forever. Instead, your goal should be to move new prospects to the point where they are ready for an ask in just 1-2 months. Step #3: Asking As we said above, people won t give to your campaign unless they are asked. Once you have cultivated a prospect, he or she is ready for the ask. In order to be effective, the candidate (or some other appropriate surrogate) needs to sit down with the donor in person or on the phone to ask them for a campaign donation. Donors can also be asked online, through direct mail, or through fundraising events, but for firsttime larger donations to the campaign, the best way to ask is in-person or on the phone. Step #4: Stewardship Once a donor makes a donation to your campaign, your work is not done. The final step in the political fundraising funnel is stewardship this is the process of continuing the relationship and communication with the donor after they have made a donation. Why do you want to continue to grow the relationship? For two reasons: first, you want the donor to make another donation before Election Day if they have not already maxed-out (or to give again next campaign cycle during your re-election campaign). Second, you want the donor to make referrals by introducing the campaign to other prospects who might want to make a donation. Your current donors can be very valuable assets to the campaign going forward, if you steward them correctly. Remember: Relationships Must Come First The four-step political fundraising funnel is a must for every political campaign, no matter how small or large. As you can see from the outline above, one of the key rules for using the funnel successfully is to understand that relationships must come first, before you ask for a donation. 2016 by Joe Garecht. All rights reserved. 10
Instead of picking up the phone to ask for donations from cold prospects, try to get a warm introduction, then spend time getting to know the donor before you make the ask. Likewise, once a donor gives to your campaign, thank them, stay in touch with them, and continue to make them feel like part of your team before you ask for another donation. How to Set Your Overall Fundraising Goal Most candidates go into a campaign saying, I d like to raise $10,000, or We re going to raise $50,000,000, but they have no idea why they are setting those amounts, other than that these amounts sound about right. This is the wrong way to set your campaign s fundraising goal. I always tell candidates: start by writing your campaign plan and figuring out what you need to do to win the election. Then, develop a budget based on your plan what are your minimum, middle, and maximum budgets in order to carry out the strategy you detailed in your plan? Finally, write your fundraising plan based on your budget the budget should become your fundraising goal it s what you need to raise in order to carry out your plan and win your election. The plan and the budget have to come first. The Political Fundraising Pyramid Modern political campaigns use a variety of fundraising tactics to meet their goals. Those tactics form the remainder of this section. Before delving into how to plan and implement each of these individual fundraising tactics, however, it is important to understand how each tactic fits into the overall fundraising plan. The best way to visualize this is through The Political Fundraising Pyramid, a concept developed by Local Victory: (See next page ) 2016 by Joe Garecht. All rights reserved. 11
Direct Mail / Internet / Telemarketing Less $ per Donor / More Donors Events Major Donor Groups Affinity Groups Personal Solicitation More $ per Donor / Fewer Donors This diagram represents all of the various tactics that most campaigns will use to raise money. At the bottom is personal solicitation, which raises a comparatively larger portion of an average campaign budget than any other tactic. (Personal solicitation involves the candidate and other surrogates doing calls and meetings to ask for large donations to the campaign). Then comes major donor and affinity groups (including the finance committee), which raise less than personal solicitation, but more than the remaining tactics. Then comes events, then direct mail, the Internet, minor donor groups and grassroots fundraising. Also note that those tactics at the top of the pyramid, like grassroots and Internet fundraising, raise money from lots of donors, but in very small chunks. As you progress down the pyramid, the number of donors per tactic gets small, while the average donation gets higher, until you get to personal solicitation, which results in high average contributions from a relatively small number of donors. 2016 by Joe Garecht. All rights reserved. 12
Some of these tactics may be puzzling at this point, but we ll be talking about each of these fundraising strategies during the 6 weeks of this class. Once you have finished the class, come back and look at this diagram again and you will have a better understanding of how all the pieces fit together in the Political Fundraising Pyramid. My hope is that after reading the above information and listening to this week s podcast, you ll have a firm foundation for the rest of this course, and that you ll understand the basic concepts that underlie all successful political fundraising. Beginning next week, we ll be looking at specific strategies and tactics and learning how to use them to raise money for your campaign. I know that many people going through these materials are thinking about running for office next year (or some year in the future). Before we wrap up today s module, I want to present some ideas for those people who are getting ready to run for office, but who aren t yet in the middle of a heated campaign. Political Pre-Fundraising: What to Do While You re Getting Ready to Run If you re thinking about running for office (or advising someone who is), you may be tempted to simply wait for the start of campaign season before diving into your fundraising activities. That would be a mistake. Raising money will directly impact your ability to spread your message and win your campaign. There are lots of things you can be doing, prior to the launch of your campaign, to put yourself in a better position to successfully raise the money you need to win. In my experience, you should launch your fundraising efforts as early as possible, and your prefundraising efforts even before that. Here are three ways you can put your campaign in a better position to win by laying the groundwork for an effective fundraising effort: #1 Develop Your List Once you decide to run for office, one of the first things you should do is put together your fundraising list. This is a list of everyone the candidate will call or meet with in the early days of the campaign to ask for donations. My suggestion to candidates is that they put this list together as early in the cycle as possible. For first time candidates, this list should include everyone on your holiday card list, as well as everyone in your Rolodex that you have spoken to at least once over the past two or three years. The list can include family, friends, business associates and colleagues, neighbors, vendors, clients, professional acquaintances everyone and anyone who might be interested in your campaign. 2016 by Joe Garecht. All rights reserved. 13
The list should include not only the name of each person, but also his or her phone number as well as a target ask amount the amount you plan to ask the person to donate to your campaign. Develop this list early, so you will be able to use it in the first few days after you announce your candidacy to raise the money you need to get your campaign started on the right foot. #2 Start the Conversation Once you have developed your list, it is important to start having conversations with as many people on the list as possible. Of course, since you are not yet a candidate, these conversations will not be asks. Instead, you should be reaching out to the people on your list to do one of two things: Re-establish Connections: For those on your list that you have not talked to in a while, now is the time to call them (or get together for lunch) to say hello and get re-connected. Lay the Groundwork: For those on your list that you do speak to regularly, now is the time to let them know you are thinking about running for office. Use this opportunity to get their thoughts on your possible candidacy as well as to discuss some of the reasons you are planning to throw your hat into the ring. Also, during the lead up to your official campaign launch, you can make a list of people you would like to get to know for fundraising purposes, and reach out to them to try to set up meetings or calls. Far too many candidates wait until they officially announce before calling the largest political donors in their area. By then, it s often too late. Try to make a connection now, before you become a candidate. #3 Practice Making Asks The planning phase is also a great time to practice making fundraising asks for your campaign. Most first time candidates get a little nervous about making asks. If you ve never sat across the table from someone and asked them for $5,000, you might not feel comfortable doing so. Use the months before you launch your campaign to practice asking for donations. Work with your spouse or a close friend or supporters to practice making asks (both in person and on the phone) so that when the time comes to make real asks, you are comfortable and ready to go. Don t waste the months before your campaign launch by simply working on issues papers or daydreaming about Election Night. Take the time now to prepare for fundraising success so that your campaign will have the money it needs to win. 2016 by Joe Garecht. All rights reserved. 14