How to Read, Understand and Use Political Giving Records in Prospect Research
The huge sums of money raised by political campaigns in recent years have made elections fascinating. During the 2008 election cycle, then-Democratic nominee Senator Barack Obama raised an unbelievable amount of money for his campaign — more than $750,000 in two years while foregoing public financing of his campaign. In the 2012 election cycle, both President Barack Obama and Governor Mitt Romney decided to forego public financing of their campaigns to eventually each raise more than $1 billion.
This is remarkable considering the campaigns raised these amounts during a down economy, when most donations came in increments of $200 or less. While there were some multimillion dollar donations to the infamous Super PACs on both sides, these large donations generated headlines precisely because they were uncommon. In comparison, only a few nonprofits — mostly higher-education institutions — have run $1 billion plus fundraising campaigns. And those campaigns usually span five to 10 years while relying on numerous $1 million plus gifts.
The details of such political giving data constitute a large, free source of information that can lead to new prospects. Prospect researchers can use the campaign finance data as an important tool to evaluate a prospect’s giving capacity as well as learn more about the prospect’s background.
Why Political Giving Data?
Why is political fundraising data so valuable to prospect researchers? There is a wealth of information available in these political fundraising numbers to researchers, and it is all free and searchable on the Federal Election Commission’s (FEC) website. This information also is accessible via other sources, including WealthEngine and OpenSecrets.org. While there may be some overlap, state campaign finance sites can offer additional campaign contribution data. Links to state sites can be found at the Campaign Finance Information Center.
It is worth noting that the 2008 and 2012 campaigns amassed support from large numbers of people, including many who had never been involved in political giving. The Obama campaign, especially, touted its ability to bring in new donors. Thus, a large set of fresh data quickly became available to researchers, opening doorways to new prospects.
What Can Be Found?
Every federal political campaign must report basic information about its donors to the FEC. To the best of its ability, each campaign must report the identity of its donors, how much each has given, where each donor lives, plus each donor’s current employer and occupation (see Figure 1). If an individual makes a cumulative donation of $250 or more to any single political campaign, the FEC discloses the information in its online database. This empowers prospect researchers with names and locations — even just a state — to potentially find a person’s giving history, their address and certain employment information, which can lead to further discoveries. For example, the employment information listed on the FEC can lead researchers to a longer biography with educational information and business contact information, including an email. All of this information could be listed on the website of the prospect’s employer. It is especially helpful that this FEC data is free, as many research shops are on ever-tightening budgets.
Extrapolating Giving Capacity
With the advent of this publicly accessible political giving data out in the public sphere ripe for the picking, some prospect researchers are now examining how to best extrapolate an individual’s charitable giving capacity from that person’s political giving.
When considering political contributions as an indicator of giving capacity, it is important to understand the various campaign finance limits on individuals that exist (see Figure 2). While the size of charitable contributions are generally used to indicate giving capacity, where larger gifts indicate more capacity, even a $1,000 contribution by an individual to a candidate is significant because political giving is capped by federal limit. Note, some resources do show data going back as far as 1994 and include much larger pre-campaign finance reform contributions. In fact, political contributions of any size that are publicly disclosed ($250 or more) can indicate wealth and conceivably place the person in the top 6 percent of the U.S. population by wealth. As affirmation of this point, wealth screening and fundraising analytics company DonorSearch considers political giving the fourth best marker for philanthropic potential.
In an October 2012 article in the Chronicle of Philanthropy, “Political Giving Can Signal Big Potential for Charitable Donations,” Raymond Flandez describes how a prospect researcher for an upstate New York university began to use political giving data after the 2008 election to identify new prospects. The researcher created a rule of thumb to use: An individual has the charitable giving capacity of 100 times the amount they gave to a single campaign in a single election year. Accordingly, a $5,000 political donation to the Obama campaign in 2008 could indicate a potential to give $500,000 to charity.
Flandez went on to say, “Marianne Pelletier, a senior consultant in business intelligence at Cornell University who directed its prospect research team, used another yardstick. She looked for people who gave to both parties (’someone who likely owns a business and is playing both sides’) or those who donated a total of at least $40,000 to political campaigns over the years.”
As researchers continue to think of new ways to use political giving information, I would also suggest examining not just the dollar amounts of any single donation, or even total giving across a set time frame, but also considering the number of political gifts made in an election cycle by an individual. The Bipartisan Campaign Finance Reform Act (BCRA) of 2002 (aka the McCainFeingold Act) set the current limits on political giving. However, this law has been repeatedly challenged at the U.S. Supreme Court, perhaps most famously through the Citizen’s United (2010) case and the more recent McCutcheon v. FEC (2014) (see Figure 3). BCRA placed aggregate limits on how much a single individual could give to all federal campaigns. While that limit was in place, by doing the math, a political donor could only contribute to a maximum of some combination of eight candidates, two political parties and 14 PACs. McCutcheon struck down those aggregate limits on free speech grounds. And for the few Americans who donate at this level, their behavior gives prospect researchers a means to more easily identify them through the number of donations rather than the actual amounts. There are sites where one can search by zip code or county and see all the political donors in an area, making it easy to find donors in an organization’s area who have made multiple contributions. This could potentially flag ultra-high net worth (UHNW) individuals, separating them from the top 6 percent mentioned above.
Learning a Prospect’s Interests
Depending on the quantity and size of political gifts attached to any individual prospect, a researcher can surmise the prospect’s political leanings and thereby infer what causes a prospect may be willing to support. For instance, someone who gives significantly to the NRA PAC (NRA Political Victory Fund) might respond to causes concerning personal rights issues, or a person who donates a lot to ACLU’s PAC might be supportive of other First Amendment organizations. Another way to find prospects that have similar interests to a specific nonprofit is to use OpenSecrets.org search function for PACs by industry. For instance, a researcher at a healthcare nonprofit can drill down on specific health care PACs to see who is giving how much to those particular PACs and what the PACs are supporting.
With the loosening of campaign finance regulations after Citizen’s United (2010) and the rise of social welfare groups, wealthy people can more easily participate in advocacy through large political donations. Social welfare groups, also known as 501(c)4s, can participate in elections as long as those political activities constitute less than 50 percent of their spending. And, the newly-minted Silicon Valley billionaires, such as Facebook founder Mark Zuckerberg, are experimenting with innovative philanthropic models that could blur the lines between political advocacy to influence public policy and charitable causes that have a policy component, such as education reform. In fact, I would argue that a person’s political giving is just an extension of their charitable giving and vice versa. Both are designed to create social change in the world.
However, researchers should use caution when relying on political fundraising information. There are many reasons why people give to a political campaign — perhaps the candidate is a friend, the donor supports the candidate’s stance on a particular issue or the individual is seeking access — and not all of these reasons represent valid prospecting opportunities. With that said, historical political support can reveal how a prospect’s values or business needs have shifted over time.
Political giving data from the 2008 and 2012 elections is a gold mine of information for prospect researchers. New giving data with the same information is being added to the FEC on a monthly and quarterly basis depending upon the campaign for the 2016 election cycle. Therefore, researchers should check the FEC on a periodic basis for additional information. It has provided researchers a free source of information on a new set of prospects. In the end, using political giving as a means to predict charitable giving potential is not an exact science, but it can help generate leads especially for organizations working with limited resources for prospect researchers.
Daniel Greeley was the prospect researcher at the Land Trust Alliance, a land conservation organization of more than 1,200 land trust members. He previously worked in political fundraising, helping to raise a half million dollars for the 2010 Joe Fernandez Rhode Island Attorney General campaign and more than $3 million for the 2008 Betsy Markey congressional campaign.