Learning from Obama’s Financial Steamroller: How to Raise Money Online

Part Five of a six-part series

Obama’s platform may have envisioned a grand reform of the political system, but the primary change he brought to political fundraising was to do more of it than anyone in history:

3 million donors made a total of 6.5 million donations online adding up to more than $500 million. Of those 6.5 million donations, 6 million were in increments of $100 or less. The average online donation was $80, and the average Obama donor gave more than once…Obama also raised millions from traditional campaign bundlers — rich, well-connected fundraisers — but the bulk of the more than $600 million that Obama raised throughout the campaign was through the Internet, aides said. (Some of those bundlers, of course, also arranged for donations to be made online, so there is some overlap.)

“Obama Raised Half a Billion Online,” Jose Antonio Vargas, Washington Post, 11/20/2008

That last line is key: “online” doesn’t necessarily mean “small.” In fact, early in the primary season Obama had already assembled a network of big-money bundlers, fundraisers who tapped social and business connections to solicit large checks from other wealthy people. Obama’s big donor program accelerated as the general election approached, and regardless how many millions of small donations arrived over the internet, the bulk of the cash he raised in the end — some 75% — came from people who gave $200 or more over the course of the campaign.

Let’s tease two different ideas out of these numbers. First, it helps a campaign immensely if most individual donations, even the big ones, come in online rather than as paper checks. Money collected via credit cards is available instantly, allowing a candidate to take immediate advantage of an overnight surge in income. Plus, online donation details automatically end up in a database, simplifying accounting and reporting — a serious concern in a campaign environment in which the press and bloggers pour over a candidate’s FEC filings online.

By contrast, physical checks present an immense logistical burden, since each one has to be processed individually whether it’s collected at a fundraising dinner or arrives in the mail. Had Obama’s financial tsunami come in on paper, the process of opening, logging and depositing it would have overwhelmed just about any political staff in the pre-internet era. The time delay might have been equally fatal, as Gary Hart found out after winning the New Hampshire primary in 1984, when a surge of donations arrived too late to help in the next round of elections.

Another point: many (most?) Obama donors who gave more than $200 did so over the course of months rather than all at once. They tended to part with relatively small amounts repeatedly, which in turn is why a small-donor list is such a valuable resource — it’s the gift that keeps on giving, quite literally. Unlike traditional big donors who often reach their quota for a given candidate with a single check, small donors can contribute repeatedly, providing a financial consistency that’s priceless in a years-long campaign.

This dynamic was already apparent on the Democratic side of the presidential race by September of 2007: Hillary Clinton’s strategy of wrangling big money from traditional Democratic sources was beginning to max out, but Obama was able to return to his much larger list of grassroots donors again and again. By 2008 and the general election, his enormous pool of donors and volunteers provided Obama with a tremendous advantage over John McCain, with results decisive both financially and at the polls.

Of course, Obama’s supporters didn’t give that money all on their own — they were the target of a series of emails and other contacts stretching over the course of a year or more.

Cultivating the Grassroots

As we’ve already seen, the Obama campaign turned volunteer mobilization into a science, and it’s no surprise that they took equally great care in managing donors. The main tool they used to solicit money? Email — it’s not hip, it’s not sexy, but it absolutely worked. Of course, every communications tool from direct mail to Facebook no doubt played a role, but the campaign’s fundraising workhorse was a combination of email and a website — some two-thirds of the money they raised online was directly attributable to an email solicitation.

While anyone can send out a message asking for money, it takes a professional operation to manage virtual relationships with millions of people over a period lasting many months without burning them out in the process. Any activist database experiences “churn” as old members drop off and new ones join, but mismanagement can turn churn into flight. The Obama solutions: analytics, technical skill, experience and tactics.

You WILL be Tested on This

Just about everything in the Obama campaign’s mass emails was subject to testing and refinement, from sender’s names to subject lines, topics, text, imagery and link placement. Campaign staff would frequently break their supporter list (or a sample of the list) into several randomized groups, whose members would then receive different emails based on the message or feature being tested. Or, staff analysts might segment the list demographically, breaking down responses to particular messages based on supporters’ age, location, donation history or other characteristics.

Once they had results in hand (messages opened, actions taken, donations made) and cross-referenced with the list demographics, the team could apply this information to the next round of emails…which in turn yielded more testing data which yielded more messages which yielded more testing data and so on.

Multiply this process by 18-plus months of list-management, and you can get an idea of the volume of measurement involved in the email component of a presidential campaign. In fact, the long Democratic primary season turned out to be a boon for the Obama online analytics team, since it gave them the opportunity to slice and dice their data in every state across the country, providing a solid foundation for the Fall general election turnout operation.

The Skills that Pay the Bills

To write those fundraising and motivational messages, the Obama campaign built up a cadre of skilled experts. Former speechwriters had a particular edge, since they’d had practice at capturing another person’s voice, but just about everyone involved improved from the constant practice — it turns out that if you write mass emails 20 hours a day, you get good at it.

Because of the importance of this specialized skill, most individual messages came from the national office rather than from state organizers, regardless of who appeared to send them. The campaign’s email staff steadily expanded as the campaign progressed — according to Joe Rospars, new writers paid for themselves within a matter of weeks by boosting donations. What did they learn that made them so valuable?

Basic Principles Behind Obama’s Email Fundraising Success

The Obama campaign’s email strategy, and like so much else the campaign did online, built on the experience of previous political campaigns and nonprofit advocacy groups, relying on incremental improvements over past practice.

• A key idea: the three Ms of political email are messaging, mobilization and money.
• Emails should perpetuate core messages of the campaign.
• Emails must also do no harm — list managers must take great care not to alienate people on the list.
• Email activism is really relationship-management, since people’s propensity to vote, volunteer and donate is based on the feelings they have toward a candidate or cause.
• The more personal, informal and direct a message is, the better — usually.
• Targeting helps get the most out of a list — in Obama’s case, supporters might receive messages with different content based on their state or congressional district, their interests, their demographics or their past pattern of actions on behalf of the campaign.
• The campaign tried to develop relationships between the people “sending” the email and the people opening the email. A given message could have many apparent senders, with list members receiving emails “from” a campaign staff member they might actually have a chance to meet, for instance a regional volunteer coordinator.
• The email initiation sequence was critical to starting the process, with new list members receiving a pre-set series of messages after they signed up. The sequence steadily “scaled the ask,” encouraging newbies to step deeper and deeper into the Obama waters — first they might show up to phone-bank, and a few weeks later they found themselves devoting 30 hours per week to managing a volunteer team.
• Besides scaling the ask, Obama fundraisers also “tailored the ask,” for instance soliciting different amounts based on a person’s donation history — a $10 donor might be asked to donate $20 the next time around, but someone who’d donated $150 was safe to hit up for $200.
• The campaign also “varied the ask” — as we’ve discussed, not every communication from the candidate or his surrogates begged for money. Some delivered talking points, others provided strategy or context, while many were straightforwardly inspirational. Obama did not treat his supporters as ATMs!
• When possible, staff mapped out email narrative arcs in advance. For best effect, each message had to stand alone but also be a part of the stream.
• The emphasis on narrative arcs didn’t preclude seizing on emotion and the moment, however. Sarah Palin’s Republican National Committee speech provides a great example, since by mocking community organizers she had functionally lashed out at everyone on the Obama list who’d embraced the campaign’s organizing model. Obama staff quickly sent out a message that gave them something to do about it, and they responded: Palin’s speech was followed by the biggest day of political fundraising ever — for Obama.
• Once again, content integration was key:
  

  Including compelling and heart-tugging videos in emails and on donation landing pages gave visitors an added push to take that next step and donate. One notable example was an email and video appeal from Ted Kennedy following his endorsement of Obama. The campaign used this message and video to make the most of an emotion-filled moment, given Senator Kennedy’s illness and his historic endorsement.

  “What Worked for Obama Can Work for YOUR Organization,” Andrea Wood, M+R Strategic Services, January 2009

• The Obama campaign also understand the importance of the “value proposition of fundraising.” They were careful to portray donations as doing more than just providing abstract support for the campaign — they made it very clear where money was going, and they often raised funds for a particular stated task such as running TV ads or supporting grassroots organizing in a given state.
• Despite the best targeting, different emails activated different people at different times. No one message had to connect with every supporter or every voter — if you miss ’em this week, you might get ’em next week.

How Much is Too Much?

One billion individual emails arrived in supporters’ inboxes over the course of the Obama campaign. Why didn’t the recipients flee his list in droves? Besides all the list-nurturing methods described above, Obama could also rely on the fact that his supporters understood WHY they were getting so many messages:

…If your list members perceive a specific situation or campaign to be urgent, you can bend the rules by sending far more fundraising appeals than your list members would normally tolerate.

For example, in the 60 days leading up to Election Day, the Obama campaign sent over 80 email messages to my email inbox. On October 30th, alone, I received a total of six messages from the campaign. That’s an average of more than one email a day. Yet I did not unsubscribe because I understood why they were messaging me so heavily.

“What Worked for Obama Can Work for YOUR Organization,” Andrea Wood, M+R Strategic Services, January 2009

Again, testing is vital, and smart campaigns watch the rate at which supporters drop off very closely — unsubscribers are voting with their feet, or in this case with their fingers.

Viral Fundraising

A final aspect of the Obama fundraising machine was its peer-to-peer component, the personal fundraising campaigns individual volunteers launched through their MyBarackObama accounts, alongside all of their other online outreach.

Supporter-driven distributed financial outreach raised a few tens of millions of dollars directly, but perhaps more important is that it helped mine individual fundraisers’ social connections for new Obama donors, who would then find themselves on the main Obama list and subject to all of the encouragement described above. And of course, it provided yet another channel for priceless supporter enthusiasm and energy which would likely have gone to waste in the pre-internet era of political organizing.

The Decisive Edge

As for the end result of all of that enthusiasm, we already know the story: online fundraising allowed Barack Obama to opt out of the public campaign financing system and outspend John McCain by hundreds of millions of dollars in the general election. Online donations also helped pay for an internet-driven organizing machine that put millions of Obama supporters to work on their own streets in the days before the vote. Swamped by an ocean of money and an army of activists, Republicans were exiled from the White House and cast into the limbo of defeat.

But what about next time? Let’s look at last at how the Obama lessons apply to other political campaigns now and in the future.

In This Series:

• Learning from Obama: Lessons for Online Communicators in 2009 and Beyond
• Learning from Obama’s Campaign Structure: How to Organize for Success
• Learning from Obama’s Online Outreach: How to Find and Build Support on the Internet
• Learning from Obama’s Volunteer Army: How to Put People to Work on Your Behalf
• Learning from Obama’s Financial Steamroller: How to Raise Money Online
• Learning from Obama: How to Move Forward
• Learning from the Obama Campaign: Essential Reading

– cpd