Tuesday, November 17, 2015

Campaigns Fueled by Varied Funding Burn Rates

Campaign fundraisers face a balancing act when it comes to "burn rate"--the proportion of cash intake to cash outlay in the same time period. Too high and they risk coming up short later; too low and they fail to invest enough for future success. Here are a few benchmarks from current presidential campaigns courtesy of a recent article by The Atlantic magazine. Ben Carson's fundraising raked in an impressive $20.8 million in the third quarter, but he spent 69% of it on efforts to raise more money, relying heavily on traditional direct mail and telemarketing, which have the advantage of growing grassroots support but the disadvantage of being more expensive than digital channels. Democratic front runner Hillary Clinton had an even higher 86% burn rate, but she spent mainly on media buys, payroll and online advertising--outlay aimed at campaign infrastructure and future viability. In contrast to both Carson and Clinton, socialist Bernie Sanders is frugal, with a burn rate under 45%. He spent mainly on digital consulting and advertising, relying on ActBlue, an online platform for donations to liberal causes, for fundraising. ActBlue is a tool that gets donors by "gamifying" giving at low cost (less than 4% commission). Unfortunately for Carson and other GOP candidates like Ted Cruz, who also has a high burn rate per the article, there isn't a Republican equivalent for online donations. For more, especially about Carson's strategy, read http://www.theatlantic.com/politics/archive/2015/10/where-is-ben-carsons-money-going/410839/

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