Campaign Finance Lessons from the 2008 Campaign, So Far

As the country heads into the end game of the 2008 presidential primaries, and gets ready for an extended general election campaign, this is a good time to take stock of campaign finance lessons already learned from the 2008 election.

1. Senator Barack Obama Has Made an Extraordinary Breakthrough in Small Donor Internet Fundraising, But it's the Exception, Not the Rule; Larger Donations and Bundlers Continue to Play the Major Role in Funding the 2008 Presidential Primaries.

One of the most interesting developments in the financing of the 2008 presidential primaries has been the extraordinary success of Senator Barack Obama (D-IL) in raising small donations on the Internet.

As of March 31, 2008, Senator Obama had raised an unprecedented $101 million in small individual contributions of $200 or less, which represents 45 percent of his $225 million in total individual contributions raised for the primaries, according to the Campaign Finance Institute (CFI).

Furthermore, according to an article in The New York Times (May 19, 2008), Obama has received contributions from more that 1.5 million individual donors.

Successful small donor Internet fundraising provides a candidate with broad-based funding at virtually no cost to the candidate -- with almost no use of the candidate's time and without the danger of influence-buying that accompanies larger contributions and the bundlers who raise them.

The Obama Internet fundraising phenomenon, however, has been the exception not the rule in the 2008 presidential primary races, even though a few other candidates have had some success in fundraising on the Internet.

Overall, large donor fundraising continued to play the major role in financing the 2008 presidential primaries.

As of March 31, 2008, all presidential candidates combined had raised 51 percent, or $366 million, of their total individual contributions for the primaries in larger individual contributions of $1,000 or more. This included raising 30 percent, or $215 million, of their total individual contributions in maxed-out contributions of $2,300, according to CFI.

The presumptive Republican nominee, Senator John McCain (R-AZ), for example, raised 63 percent, or $45 million, of his total individual contributions for the primaries in larger donations of $1,000 or more, as of March 31, 2008, according to CFI.

The other Democratic candidate still in the race, Senator Hillary Clinton (D-NY), raised 55 percent, or $82 million, of her total individual contributions for the primaries in larger donations of $1,000 or more during the same period.

Even Senator Obama had raised 37 percent, or $83 million, of his total individual contributions for the primaries in larger donations of $1,000 or more, as of March 31, 2008.

And for the year 2007, when he was raising the funds critical to his ability to compete as a serious presidential candidate in 2008, Senator Obama raised 54 percent, or $52 million, of his total individual contributions for the primaries in larger donations of $1,000 or more, according to CFI.

Bundlers, furthermore, have played a key role in raising the larger donations for 2008 presidential candidates in both parties.

2. Internet Fundraising, If Combined With Multiple Public Matching Funds Could Make Small Donors the Principal Source of Private Funds in Future Presidential Primaries.

The Obama breakthrough in Internet small donor fundraising, if combined with a major innovation contained in legislation pending in Congress to repair the presidential public financing system, would open the door to Internet small donors becoming the principal source of private funding for future presidential primary candidates.

"Revitalizing the presidential funding system is essential to protecting the integrity and credibility of the presidency and the interests of citizens in fair government decisions," according to Democracy 21 President Fred Wertheimer. "The successful track record of the presidential public financing system for most of its thirty-four year existence provides powerful evidence for why the system should be repaired," Wertheimer said.