Bush campaigns in Las Vegas, Nev., September 17, 2015. (Ethan Miller/Getty)

And other insights from third-quarter fundraising reports

To win the GOP primary and, more important, the general election, a candidate must be able to play to both grassroots supporters and the major donors. Since the dawn of the era of Internet campaigns, beginning in the 2000 election, no candidate in either party who was not, at this point in the election cycle, in the top two in grassroots fundraising has won the nomination, nor has any candidate outside the top three in major-donor funding.


Candidates who cannot win the support of major donors ultimately lack the qualities to be competitive in a general election. Influential votes and voices matter, and not just for their money. This is why candidates such as Bernie Sanders are extremely unlikely to be president, no matter how much money they raise.

Conversely, candidates whom big donors love but who do not excite the base can sometimes be lifted by the establishment to the nomination but have no hope in the general election. This why candidates such as Rudy Giuliani, despite his enormous major-donor fundraising totals, went absolutely nowhere in the GOP primaries. Ultimately, it is candidates who — e.g., Obama and George W. Bush — excite the grassroots and do well with major donors who win.

Ultimately, it is candidates who excite the grassroots and do well with major donors who win.

This perspective is instructive when analyzing the candidates’ latest quarterly financial reports in the 2016 GOP presidential primary. I have compared the cumulative fundraising data from the election to date with the data through the same quarter of the 2012, 2008, 2004, and 2000 election cycles to see what we can learn about which candidates are likely to do well and which candidates are almost certain to fail. From examining the data, several striking patterns emerge, and if fundraising history is any guide to the present, all of the following assertions will prove true.


‐Jeb Bush has almost no chance of being the GOP nominee, owing to a near-complete lack of support from the GOP’s rank-and-file donors.


‐John Kasich, Chris Christie, Rand Paul, Mike Huckabee, Bobby Jindal, Rick Santorum, Lindsey Graham, and George Pataki also have almost no chance of being the GOP nominee, much less of winning the general election. That doesn’t mean it is impossible that one could do well in Iowa or New Hampshire. Nor does it mean that they should drop out, or that they are bad candidates, or that they might not have a significant effect through their presence on the nominating process. But from their early fundraising, it is clear that they will not have the grassroots support, money, or organization to win the general election, especially against what is still a very deep field.

‐Contrary to media narratives, Ted Cruz looks to be in the strongest position to win the nomination, given the fundraising data. The one major wild card in that analysis is Donald Trump, currently by far the leader in GOP polling. His support base overlaps in some ways with Cruz’s. He hasn’t fundraised actively, so it is difficult to draw firm conclusions, but it seems likely that he would be a very strong in both major-donor and grassroots fundraising. He looks like the favorite, but the party establishment, as well as a significant number of conservative activists, are set against him. He’s a unique candidate with unique positioning, and therefore he is uniquely challenging to quantify using traditional measurements.


‐Carly Fiorina and Marco Rubio could still win the nomination. But compared with past successful nominees, they have substantial fundraising and strategic weaknesses right now. In Rubio’s case, those weaknesses have been under-recognized. Ben Carson cannot be entirely excluded but rates as very, very unlikely to be the nominee, given historical patterns.


‐There has been a small-donor revolution in GOP fundraising in 2016.

Below are the small-donor (under $200) donations by election cycle, through the third quarter of each year preceding the election.

2016: $61.3 million

2012: $16.7 million

2008: 28.4 million

2004: $9 million

2000: $13.9 million

Note that this fundraising boom effectively excludes Donald Trump, the leader in the polls, who would almost certainly be at or near the top of small-donor fundraising if he had been fundraising actively. Were that the case, the GOP’s small-donor dollars would probably be about triple the highest previous total ever raised.

#share#


Some Data on Historical Ratios of Small-Dollar to Large-Dollar Money

Examining data from the previous four election cycles is one of the best ways to understand the importance of campaign finance. Below is a list of the ratios of major-donor money ($2,000–$2,700) to small-donor money (less than $200) for both parties’ nominees for the past four election cycles. The data are imperfect because my primary source (the nonpartisan Campaign Finance Institute) has tracked donation amounts slightly differently in different election cycles. I have rounded the ratios below, reflecting this imperfection in the data.

Below are the ratios between big-donor (more than $2,000) and small-donor (less than $2,000) amounts raised for candidates, 2000–2016, through the third quarter of the year preceding the general election:

2016

Clinton 3:1, Sanders 1:33

Carson 1:11.5, Cruz 1:1.6, Bush 15:1, Rubio 1.7:1, Fiorina 1:2.5, Trump 1:6.5

2012

Romney 7:1

Obama 1:3

2008

McCain 1.7:1

Obama 1.3:1

2004

Bush 6.2:1

Kerry 5.4:1

2000

Bush 12:1

Gore 6:1

A few points stand out. First, ratios of big- to small-donor money have fallen. The importance of small-donor money has grown. Even the famously plutocratic Romney raised a higher percentage of his money from small donors than did George W. Bush in 2000. Obama’s ratio of small-donor to big-donor money in 2012 was 18 times higher than Gore’s in 2000.

Second, Jeb Bush cannot win. I don’t say this because I dislike Jeb. (On the contrary, I think he has virtues as both a candidate and a person.) But the numbers don’t lie. It’s not just that his ratio of big-donor to small-dollar donations is vastly out of sync with the rest of the GOP and Democratic fields today. (Even Romney’s ratio of small-donor to big-donor dollars was more than twice Jeb’s.) Jeb’s big-donor to small-donor ratio is 15:1. No candidate has ever won the nomination with such a heavy reliance on big donors, even at a time when big-donor money made up a much larger percentage of total fundraising. For the rest of the GOP field, the ratio of big-donor to small-donor money is 1:1.6. Furthermore, Jeb ranks just third in total fundraising. For reasons I examine below, that seems unlikely to improve.

RELATED: Jeb’s Malign Influence


Jeb devotees examining this data might want to point to the year 2000, when George W. Bush at this point in the campaign had an approximately 12:1 ratio of large- to small-donor money. But using just this ratio (which Jeb exceeds) masks some important points. First, George W. Bush had locked up the big donors at this point in 2000. He had 80 percent of major-donor dollars, making him the clear choice of the GOP’s donor class. Jeb gets just 35 percent of big-donor dollars. The donor class is split.

Second, with 19 percent of the small-dollar total, George W. Bush essentially was tied for first among a divided field of small-dollar donors. In contrast, Jeb has just 2.3 percent of small-dollar contributions in the GOP field, ranking ninth.

RELATED: The Establishment Thinks the Unthinkable: Trump Could Win the Nomination

And George W. Bush’s solid but unspectacular showing among small donors looks dramatically different when mid-dollar donations, $200 to $999, are considered. Amounts less than $1,000 come typically from slightly more-prosperous grassroots donors. George W. Bush crushed the competition in this category, taking 64 percent of the mid-dollar money in the GOP field (and raising more of it than Gore and Bradley, combined, managed on the Democratic side).

By contrast, Jeb takes only 7 percent of that total in the GOP field today and ranks sixth. Even Romney in 2012 was a competitive second in the small- and medium-grassroots donor categories to Ron Paul, who had famously fanatical small donors. Romney achieved this while, like George W. Bush, winning an overwhelming victory among large donors.

RELATED: When Cruz Makes His Move, Watch Out

The contrast between Jeb in 2016 and George W. in 2000 could not be more dramatic. George W. Bush won by dominating among large donors, being right in the top tier with the smallest, most-grassroots donors, and dominating again among the GOP’s mid-dollar donors. That is what a strong, winning candidate looks like.

Meanwhile, Jeb, while relying on big-donor fundraising from his friends and family, takes just 35 percent of a fragmented major-donor pool. His performance with small donors is abysmal, ranking with that of fringe candidates, at a time when small-donor money has become ever more valuable. And his performance with mid-dollar donors is scarcely better, in contrast to his brother’s domination of this sector.

#related#Jeb raised only three times as much from small donors as did Lawrence Lessig, the semi-obscure Harvard professor, running as a Democrat, who was too fringey to be invited to a debate that featured Lincoln Chaffee, who had only 29 itemized donors through the third quarter of 2011. And Jeb’s total amount, $4.2 million, raised from donations under $2,000 is just $1 million more than the total fundraising of Lindsey Graham, who is polling at 0 percent. Jeb’s supporters are maxed out, and he has no grassroots support to grow new ones.


But what about the super PAC? Jeb supporters might counter. Yes, that money would certainly be helpful for Jeb, but it has severe legal limits as to its usage — and he’s already spent millions of it on TV in early-primary states, with little to show for it. The super-PAC money just further emphasizes his reliance on wealthy donors.

And it won’t get him over the top. Meg Whitman spent more than $178 million (far more than is in Jeb’s super PAC) to take just 40.9 percent of the vote in the governor’s race in one state, California, during the 2010 election. She ran just a point ahead of California GOP lieutenant-gubernatorial candidate Abel Maldonado, who spent less than $2 million on his entire campaign. As conservatives always say to campaign finance “reformers”: You cannot buy elections. The GOP establishment needs to take this to heart and realize that in Jeb, it has a lost cause.