A great idea is priceless. A great campaign to share that idea, however, comes with a big price tag. Election campaigns cost money, making fundraisers integral to any successful political party. The profile of party fundraisers, the tools and technologies they use, and the regulations they must follow have changed over time, but the basic objective remains the same: to create and foster relationships with supporters while raising funds for the party.
Bagmen and business donations
Though unimaginable today, fundraising fell to federal party leaders until after the First World War. Removing fundraising from the purview of the party leaders helped to insulate them from fundraising-related scandals, while giving rise to a specialized group of fundraisers, commonly referred to as “bagmen.” For the Liberal and Conservative parties, these men – and it was always men – were prized for their close connections to top firms in Montreal and Toronto. With no regulations on party donations, a few well-connected bagmen could raise a significant portion of party funding.
In 1957, the Liberal Party raised most of its campaign funds from only 300 to 400 donations. These types of close relationships and the social occasions that fostered them, such as fundraising dinners, meant that few donations came from outside of the world of business. For example, in 1953, 50 percent of the national party income for both major parties came from industrial or commercial firms, 40 percent from executives, and only 10 percent from individuals. However, bagmen were not the norm for all federal parties. When the Co-operative Commonwealth Federation (CCF) was founded in 1932, it adopted a grassroots approach to fundraising, focusing on small donations from individual citizens. The practical difficulties of this approach in an age before raising money through systematic direct mail or phone campaigns meant the CCF was nearly always short on funds.
The 1970s brought major changes to party fundraising. Computerized direct-mailing lists and a generous tax credit for party donations meant that targeting small donations from individual citizens became a lucrative strategy for party fundraisers. While individuals quickly constituted about 40 percent of candidate financing, business contributions still played a critical role well into the early 2000s. During the 2000 election cycle, the Liberals raised approximately six of every ten dollars and the Progressive Conservatives half their funds from corporate contributors, while the NDP received one-third of their funding from trade unions.
Reforms to party financing regulations
In 2003, major reforms to federal party finance regulations placed significant caps on individual, corporate and union donations. A per-vote subsidy that served to offset the revenue loss created by these changes was also introduced. In 2006, corporate and union donations were banned altogether. By 2015, the per-vote subsidy had been phased out. As a result, party fundraisers of all political stripes now target small donations from individuals. In 2019, Canadians were permitted to donate up to $1,600 to each registered political party.
Fundraising tools such as direct mail, phone, and email campaigns targeting individual supporters show how party fundraisers today must know how to communicate effectively via a personalized message on a mass scale to potential supporters. Parties have made significant investments in data infrastructure to support fundraising. They use sophisticated online marketing tools, donor relationship databases, and increasingly predictive analytics to identify fund-raising prospects, target their appeals, and ensure that every prospect and donor has a positive experience and long-term relationship with the party they support. While the upfront costs are significant, the investment in digital tools yields clear financial benefits.
Today’s multi-disciplinary, digitally focused fundraisers
Top fundraisers are now trained professionals skilled in direct marketing, brand positioning, and digital marketing. Fundraising directors and their sizeable teams are skilled practitioners who deploy significant financial and staff resources to build and maintain relationships with donors across multiple fundraising channels. Today’s political fundraisers combine backgrounds in communication, marketing, and data analytics to design and execute programs that have to deliver $30 million to $40 million per election cycle. Fundraising year-round is necessary to ensure the party has resources to run its operations between elections and to fund its campaign come election time.
The director of fundraising is an essential part of a political party’s operations, though the stakes are higher during an election campaign. Therefore, planning for the fundraising components of the campaign begins months in advance. The party’s fundraising goals and available resources, such as lists of party members, voters and sympathisers, as well as potential private fundraising vendors, are key. Once these goals and resources are established, the focus turns to timing and the design and implementation of the outreach strategy.
The party’s database is a formidable resource for targeted fundraising efforts. In the lead-up to the election, fundraising through telemarketing, direct mail, and digital appeals increase in frequency. Additional fundraisers – either in-house or through fundraising contractors – are engaged and contact time is increased. Telemarketing typically continues intensely throughout the campaign, targeting both past donors as well as new prospects identified through voter outreach efforts. Direct mail fundraising pieces are planned and written in advance.
Timing is a major factor in terms of resources and strategy. As Election Day draws closer, fundraising efforts start to shift away from monthly donations towards one-time donations, which generally yield more money in the short term. Some 50 percent of the funds raised in an election cycle come in the 90 days leading up to Election Day. Therefore, it is critical that the pre-election and election fundraising plans ramp up all fundraising efforts, with an eye to ensuring high donors give the legal maximum for the year.
During the official campaign period, party fundraisers are regularly briefed on what messages are resonating and what feedback is coming from core supporters about the campaign. Fundraisers are also briefed on policy proposals and updates from the campaign as tools to better engage supporters. Like all members of the campaign team, fundraisers must act and adapt quickly in a dynamic political environment, so fundraising messages continue to reach the right people, at the right time, using the right communication medium. Some factors that build a successful election fundraising campaign are beyond a fundraiser’s control. A potential donor’s perception of a party’s likelihood of electoral success can affect the decision to donate. The more positive momentum a party can build, the easier it is for fundraisers to successfully meet or exceed fundraising goals.
Balancing money raised and money spent
All political parties, and indeed all fundraising organizations, face a common challenge: recruiting new donors at a reasonable cost. One of the ironies of fundraising is that it can be very expensive. A successful fundraiser is not simply a person who raises a lot of money, but someone who does so in a cost-effective way. These numbers matter. While the past couple of decades have seen the Conservative Party consistently raise more money than other federal parties, it has also spent the most money to do so. For example, the Conservatives raised $24.2 million from 104,000 donors in 2018 compared to the Liberals, who raised $15.9 million from 66,000 people. The Conservatives, however, spent $8.5 million to raise this amount, while the Liberals spent $3.4 million, cutting the actual fundraising gap between the two parties by more than half. This fine balance between money raised and spent motivates party fundraisers to refine and renew their fundraising techniques.
Finding new donors has changed dramatically. Whereas early fundraisers relied on leveraging personal relations, developments in technology and today’s donation limits have changed matters. Recruiting new donors at a reasonable cost has occurred mainly by exchanging lists with other organizations, or public outreach. The latter process, however, is generally quite costly, with organizations paying upwards of $150 for each new donor they acquire through telephone or direct mail prospecting. In the digital era, list exchanges are still part of new donor acquisition, but targeted online ads have increasingly become the norm. These ads encourage prospective supporters to sign an online action, or petition, so the party can then acquire their email address for fundraising appeals.
For the NDP, one solution to the new donor acquisition challenge comes with a modern twist on two old ideas: contests and dinner with the party leader. For years, direct mail fundraising firms have used contests (e.g. “Win a trip to Hawaii if you donate!”) to entice donors. And for as long as there has been political fundraising, political leaders have invited supporters to pay for dinner with them. These vary from large ticketed banquets to intimate dinners for high-dollar donors. The NDP twist, used in 2015 and 2019, was to ask supporters to chip in as little as a few dollars for a chance to win an exclusive experience with the leader. In 2015, one contest saw a young woman from Nova Scotia attend a Montreal Canadiens National Hockey League game with NDP leader Thomas Mulcair, while another had the two contest winners join subsequent party leader Jagmeet Singh on the campaign plane during the 2019 election campaign. These contests attracted thousands of new donors to the NDP’s campaign at a relatively low cost.
Capitalizing on momentum
Inevitably, a party’s momentum contributes significantly to its fundraising. So what do you do when the overwhelming view is that your party is lacking? This was the challenge faced by the NDP going into the 2019 election campaign. For the party’s digital fundraising team, a narrative around momentum was deployed in three phases over the campaign: the possibility of momentum, achieving momentum, and protecting momentum. Even when momentum is not immediately apparent for a party, the possibility is always there.
Thus, in the first half of the 2019 campaign, when NDP polling numbers showed relatively little movement, emails to supporters focussed on an “energy of possibility,” according to Oliver Paré, the NDP’s digital director for the 2019 election’s fundraising. As positive recognition for NDP leader Singh built over the campaign – particularly following the English-language leaders’ debate – the fundraising narrative changed accordingly, from possibility to momentum in action. For example, when Singh did an impromptu walkthrough at Toronto’s Ryerson University the day after the leaders’ debate, and was swarmed by student supporters, the digital fundraising team quickly sent out an email describing the event and asking for support.
This focus on fundraisers may leave the impression that money is the sole factor that wins elections. This is certainly not the case. While fundraising, securing bank loans and managing debt are critical parts of an election campaign, they are not determinative. Nonetheless, a party is unquestionably much worse off without a strong fundraising team that can create and foster relationships with supporters while raising funds for the party. After all, a great election campaign is never priceless.
This article is part of The Insider’s View Behind the Scenes of Election Campaigns special feature.