The strategic calculations of political campaigns logically begin with the rules of play. In the case of presidential nomination campaigns, those rules are set by national parties, state legislatures, Congress, and the Supreme Court. These four noncoordinated rule-making bodies have produced a complex and evolving strategic environment characterized in recent election cycles by many primary contests, ever-changing regulations for selecting delegates, and an increasingly front-loaded event calendar. An important and relatively stable part of this strategic environment has been the congressionally and judicially mandated set of rules governing nomination campaign finance.

These finance rules have been in place since 1976 and fully implemented in four election cycles, starting in 1980. They limit the amount of money individuals can give to candidates and the amount candidates can spend nationally and in each state. They also provide matching funds for individual contributions, which enhances the ability of candidates to raise large sums from many small donations. This legal framework thus creates a regulatory structure within which the strategic calculations of nomination campaigns must be made. It also creates the environment in which individual decisions to contribute are taken. In doing so, it strongly influences the interactions between the campaigns and those individuals who may wish to participate. This chapter explores the impact of these rules on presidential nomination finance.

The regulation of contributions: FECA

In 1971 Congress passed the Federal Election Campaign Act (FECA), which provided for the disclosure of contributions and expenditures in the quest for national office.

Most donors of serious money to presidential nomination candidates come from an established pool of habitual givers, not from a body of mostly first-time contributors assembled on an ad hoc basis by different candidates each election cycle. As we saw in the preceding chapter, the size of the pool has generally grown election by election since the inception of the FECA rules. Yet even though there is defection from and especially recruitment to this pool, at any point in time the great majority of those who give serious money have contributed before and will do so again, though not necessarily in every election. In 1988, for example, 83% reported that they had contributed previously to a presidential candidate; 95% said they had previously made a political contribution of some kind.

This should not be surprising, since those who are motivated to contribute in one election will probably be motivated to do so the next time. All potential contributors must weigh the opportunity costs of making a cash contribution against an array of political, social, or material benefits that such a contribution might produce. Those who decided in the past that the benefits of contributing outweighed the costs are more likely to make a similar decision in the future than those who decided not to contribute in the past, or those who simply never considered doing so. Thus those who have a propensity to contribute in one election will probably have a propensity to do so next time.

Furthermore, such people are given every opportunity to act on their propensities and remain in the pool.

We have shown that there exists a relatively constant pool of campaign contributors with a heterogeneous set of motives that are approached by candidates either through personal networks or through mail and telemarketing. Although campaigns often seek to expand the pool of contributors by attracting new members, two of the most basic decisions by campaign strategists are which segments of the existing pool to target and how to target them. Individual contributors must then decide whether or not to respond to a solicitation by a campaign. In addition, when campaigns employ personal networking, they must develop a strategy to identify which of their contributors will be asked to solicit others to give. Those asked to solicit must in turn decide whether or not to invest the time, energy, and social capital to do so.

Our panel study of 1988 and 1992 contributors enables us to examine these series of decisions by campaigns, contributors, and potential solicitors. The 1988 data consisted entirely of people who were asked to give and who gave, so we cannot compare them to those members of the pool who were not asked or who were asked but chose not to give in 1988. Thus, using the 1988 data alone we cannot examine campaign decisions about whom to solicit, or contributor decisions about whether to contribute. The 1992 survey asked the 1988 contributors whether they were asked to give in 1992, whether they gave, whether they were asked to solicit others to give, and whether they did solicit. The panel study therefore allows us to examine the decision calculus of candidates and potential contributors, which cross-sectional studies cannot do.

Robert Farmer, a major fundraiser for both Michael Dukakis and Bill Clinton, offered this blunt assessment of Paul Tsongas's decision to quit the 1992 presidential race: “People don't lose campaigns. They run out of money and can't get their planes in the air. That's the reality” (Congressional Quarterly Weekly Report, 1992). Although Tsongas himself may have had several reasons for dropping out, he highlighted finance as one of them: “If you have no resources to fight back with, you are defenseless in this business. … Michael Dukakis had the most money and could take out Dick Gephardt and everybody else, and Bill Clinton basically did the same thing” (“MacNeil/Lehrer Newshour” 1992).

There can be little doubt that money is important: in seven of the eight major-party presidential nomination contests that took place since the current financial rules of engagement went into effect in 1980, the eventual winner had the largest amount of cash in the bank on January 1 when the process started in earnest. Caution, of course, is warranted in assuming a causal connection here. Those who have the most cash reserves at the start of the process (or who eventually raise the most money) do so for a reason, and the political resources that enable candidates to win the nomination may also be those resources that enable them to raise large amounts of money and raise them early. Attractive, viable candidates tend to receive more money as well as more votes.

It is also wrong to assume that just because a candidate raises a lot of money he or she will do well.

The 1988 survey was conducted by the authors. We drew a random sample of contributions to each of the eleven major presidential nomination candidates in the 1988 election. These candidates were: Babbitt, Bush, Dole, du Pont, Dukakis, Gephardt, Gore, Jackson, Kemp, Robertson, and Simon. The sample was drawn from the lists of contributors that candidates filed with the Federal Election Commission (FEC), and was based on pre-July 1988 contributions that aggregated to over $200 to a single candidate.

We received completed surveys from 1,246 respondents, representing a response rate of 37%. Our estimate of response rate was a conservative one. We did eliminate known invalid addresses (of contributors who had moved without forwarding addresses, or whose forwarding addresses had expired, or whose addresses were incorrectly recorded by the campaign committees to begin with), together with deceased or hospitalized contributors. However, we are confident that the 37% is a lower bound for the response rate because we certainly have not identified all of the inappropriate addresses or deceased or ill respondents.

Although this is not a high response rate, it is not unusual for this type of survey or sample. Two preceding surveys of contributors, one of 1972 presidential contributors and another of 1978 House contributors, produced response rates of approximately 50%. (See Brown, Hedges, and Powell, 1980a, for the 1972 survey and Powell, 1989, for the 1978 survey.) However, responses to all types of surveys (mail, telephone, and in-person) have dropped sharply in recent years, and our results reflect that. Guth and Greene (1991), surveying a similar population, were able to get a 40% response rate with five mailings and an elimination of institutional addresses.

1988 SURVEY ITEMS USED IN ANALYSIS

Issue and ideological items

Agree–disagree items:

• Reducing the budget deficit should be the next president's top priority.

• The next president should raise taxes to help balance the budget.

• Free trade is important, even if it results in the loss of U.S. jobs.

• This country would be better off if it returned to the gold standard.

• The government should provide a program of health insurance for those not currently insured.

• Mandatory death penalty for murder should be the law.

• Defense spending should be reduced.

• We should have mandatory prayer in the public schools.

• The government should not regulate what adults read, even if that includes pornography.

• Child care is the parents' responsibility; government should not be involved.

• Students or teachers should not be required to pledge allegiance to the flag.

• Businesses should have the right to test any employee for drug use whenever they choose.

• The government should prohibit abortion.

Seven- point issue and ideological scales

All serious presidential nomination campaigns must carefully assess the resources available to them that can be used to build a financial base. Although each candidate has a unique set of resources, there are five major types that were important in both 1988 and 1992, and will probably remain so in the future. These consist of having a strong home-state constituency; possessing strong ties to national party activists; exercising positions of congressional leadership or having access to the national legislative agenda; sharing ethnic, religious, or other types of social identities with major groups of potential donors; and being well-placed on the ideological spectrum. Each of these resources enables a candidate to tap into the pool of contributors and mobilize an important segment of it. Thus some candidates can take advantage of the opportunities provided by current or former political office, others build on organizational and individual relationships they have developed over the years, and still others exploit common ties of ideology and social identity with their contributors.

The presidential candidate resembles the interest-group entrepreneur of Robert Salisbury's (1969) formulation: he or she must assemble a set of “benefits” that will attract enough contributors to fund the campaign. These solidary, purposive, and material motives activate different sets of contributors and are more or less useful to different types of candidates. Like an interest-group entrepreneur, the candidate must build an organization to distribute these benefits and to attract members (contributors).

In the previous chapter, we demonstrated that there is a connection between the benefits that contributors seek and the methods that candidates use to solicit them.

The campaign finance process unfolds as an interaction of two sets of decisions, one by the campaigns, and the other by potential contributors. Campaigns must assess their resources and identify their most likely financial constituencies. They must then determine the best methods to approach these constituencies, considering carefully the likely motives of those whom they hope will contribute to their candidates, and the benefits that their resources allow them to offer to those potential contributors. Potential contributors must decide whether to contribute to a candidate and how much to give. More than a third of contributors are asked to give to more than one candidate, and these contributors must make separate but possibly related decisions about giving to each candidate who asked them.

Campaigns that build personal-solicitation networks must also decide which of their contributors they will ask to solicit on behalf of others. Campaigns with relatively broad pyramids rely on fewer solicitors, but ask that they each raise proportionately more money. Campaigns with relatively deep pyramids rely on more solicitors, who must therefore raise proportionately less money. Those who are asked to solicit must decide whether to spend the social, political, and occasionally economic capital to become more involved in the campaign. They presumably assess the likely benefits of active participation, and may consider the probability that the candidate will win.

The decisions by campaigns are constrained by two sets of factors: the legal regulatory structure, and the need to solicit largely from the existing pool of contributors. The rules limit the maximum size of the contribution, therefore creating the need to solicit at a minimum tens of thousands of potential donors.

The pool of serious money contributors is a resource to be mobilized, not a force that presses itself on presidential hopefuls. People do not give to candidates spontaneously, but because they are asked to give. Successful candidates must therefore develop strategies to determine who has the greatest potential to contribute money to the campaign, and how to tap such people.

Campaigns make decisions about how to try to collect money by estimating how to get the greatest return for the least commitment of resources (e.g., money, candidate time, staff time). Ultimately the composition of each candidate's financial constituency is a function of the candidate's resources and the campaign's decisions about how to take advantage of them. These decisions result in the specific choices of whom to approach and how to approach them.

There are two basic methods of raising money in presidential campaigns. Candidates can hire direct mail or telemarketing firms to solicit citizens whose names appear on various lists. Candidates can also attempt to build networks of solicitors who ask their friends and business associates to contribute money. Many candidates use both approaches, but in 1988 each candidate used one of these techniques far more than the other.

There are differences among candidates in the optimal ways to raise money because potential contributors respond to different candidate characteristics in deciding whether or not to make a contribution. Successful impersonal solicitations are likely to involve strong emotional appeals by candidates who represent the ideological wings of their party.