Why Trump’s Fundraising Numbers Matter
Question: How does somebody who goes around telling everyone how rich he is raise money for his campaign?
Answer: He doesn’t.
Money is the lifeblood of politics. Most of us hate that fact, but it is true. Your average presidential campaign will burn through several hundred million dollars over the course of a campaign. Fundraising is a critical component of any successful presidential run and the ability to raise large amounts of money from not only the donor class but also from the grassroots has long been one of the key metrics of judging the health and probability of success – campaigns that raise the most money tend to be the ones who win. This has been true since the turn of the 21st century, where the candidate who raised the most money has gone on to win the general election. The last candidate to outraise his opponent and lose was Bob Dole in 1996.
Thus, when the New York Times and other news outlets reported Tuesday that the Trump campaign had a paltry $1.3 million cash-on-hand as of June, it sent shock waves through the media and the political establishment. It also spurred a #TrumpSoPoor hashtag that spent much of Tuesday trending on Twitter. The numbers appear even worse when compared to the Democrats, where Hillary Clinton is sitting on $42 million after raising $26 million in the same month Trump raised $3.1 million. Trump’s opinions on Super PACs are well known, which is why those linked to him have raised almost nothing while Hillary’s raised $12 million in the same time period.
To put things in perspective – Ben Carson’s campaign has $1.8 million cash-on-hand and he dropped out in March.
At the same time, fundraising for the Republican National Committee is lagging, as well. By this point in the campaign in 2012, the RNC and Romney together had raised over $76 million, and had over $60 million cash-on-hand. Trump and the RNC right now raised $13 million in the same time period, and the RNC has $20 million cash-on-hand.
Trump himself has proclaimed he’s one of the richest men in the country and he has access to “unlimited resources.” While he claims he can self-finance if necessary, his own FEC reports indicate that he doesn’t have sufficient liquid assets to make self-financing a viable alternative – at best he has between $65 and $175 million in ready cash according to his own financial disclosure forms. Even assuming the high end figure of $175, that’s still less than Mitt Romney spent on media alone in 2012. The low end number is less than Romney spent on fundraising.
The Trump campaign is also larded up with campaign debt – over $45 million, and all of it in the form of loans Trump made to the campaign. By loaning money to his campaign, he may eventually use whatever funds he raises to pay himself back. While he has claimed he will not pay himself back, he continues to make loans to his campaign rather than straight donations and he has made no move to convert the loans to donations, which would give GOP donors a bit more faith in his claims that he didn’t intend to pay himself back with donations they would be giving to fund the campaign, not reimburse Trump for his own costs.
What’s worse, the money he is raising is being wasted. Almost 20% of the $6.7 million in campaign expenditures made by the campaign in May didn’t go to things he needs to be doing to win, they went to Trump branded businesses, hotels and payments to his family members including reimbursement for their travel. It also appears that Trump is drawing a salary from the campaign – or at least claiming his salary as an in-kind donation to the campaign.
Trump supporters have been quick to scoff at the reports, as has Trump himself, and the spin has been coming fast and furious. He’s not running a traditional campaign, they say. He doesn’t need the money Romney needed for advertising because he gets it for free from the media covering everything he does, they argue. He can do a cheap web ad and watch it get replayed a million times on MSNBC as their anchors splutter with rage, they chortle. The old rules of politics don’t apply to him, they note, and with good reason. So if the rules don’t apply, why should anybody worry about things like fundraising? Fundraising is a metric that doesn’t always indicate success, and in this unconventional campaign, it’s less useful than ever before, according to Trump’s apologists. He beat all those other guys who raised more money, so why does this matter?
No matter what his supporters say, nobody can argue that campaigns don’t need money. Staff, polling, data, websites – even the coffee and donuts for volunteers – all costs money. Even assuming, for the sake of argument, that Trump doesn’t need to spend money on advertising at the same clip Romney did, he still needs something in the order of $200-$300 million for the ground game necessary to take on Clinton in 50 states. Even running a lean and mean campaign using the media for free advertising, he still has to raise and spend money. There’s no way around it.
What’s most troubling is that the issues he faces with fundraising demonstrate an inherent, unsolvable problem with Trump’s campaign.
How does someone who is rich enough to make Mitt Romney look middle-class ask somebody making minimum wage to donate to his campaign? How does he ask a family making $75k a year to pony up $500 or more to help him get elected? Think about it this way – if you’re walking down the street and see a guy dressed in a Brooks Brothers suit tapping on his iPhone with one hand while holding a McDonald’s cup in the other and asking for spare change, do you give him any?
Trump has gone out of his way to tell people he doesn’t need their money. So why would they give it? At the same time, he’s spent most of his campaign attacking his opponents who have outraised him considerably, saying they were bought by the special interests. If he were to start actively pursuing that money, he’d be rightfully branded a hypocrite and his “I can’t be bought” message would implode. So that money is off the table. Small donors – the kinds of donors who propelled the Barack Obama and Bernie Sanders campaigns – aren’t going to sacrifice their own money to give either to the hated RNC or to Trump himself, because how could he possibly need their money? Isn’t he rich?
That’s why Trump’s last ditch email campaign begging to raise $100k looked so pathetic. Trump has made it sound like he could find $100k just cleaning the seats on his jet. That kind of fundraising email is a standard ploy used by literally every campaign at the end of a filing deadline, and generally it’s effective. But with Trump, given his constant reminders about his wealth, that kind of standard fundraising tactic backfires every time he uses it. Whatever money he raised is immediately undermined by the message it sends, which contradicts his campaign message that he’s above fundraising and political dollar grabbing.
Trump has painted himself into a corner. By touting his wealth, he’s made it impossible to raise the kind of money he needs in order to stay competitive with the juggernaut fundraising machine that the Clintons have built. By not being able to raise the money he needs to be competitive, he’s forcing himself to self-finance, which he can’t afford to do, no matter how rich he claims to be. At this point, given his inability to raise money, it is exceedingly likely that Trump will accept federal matching funds, which will further undercut his messaging and let Hillary attack him for being a billionaire using taxpayer money to run his own campaign.
His lack of principles, bombastic rhetoric and constant flip-flopping aside, Trump’s fundraising problems represent the loudest warning signs so far during this campaign. Even were he to get his behavior under control and show some self-discipline, the inability to raise money stems from a structural problem at the heart of his campaign and that’s not anything he can solve.
Why do Trump’s poor fundraising numbers matter? Because there’s no way to fix them.
