Campaign Fundraising: Cash on Hand vs. Money Raised
Why cash on hand matters for campaign fundraising.
Campaign fundraising is on everyones mind. A candidate calls a frequent donor and asks for help. The donor asks the candidate, “What is your cash on hand?” The candidate answers, “I have raised a total of $350,000 dollars.” “Great,” the donor responds, “but what is your cash on hand?” “$35,000” says the candidate. “Umm. Let me get back to you,” the donor replies and hangs up. Ouch.
A better answer to the donor would have been, “I have $35,000 on hand. I just got through a tough primary and am calling my primary donors to give again, that is why I am calling you. I have a good chance at winning and am out-raising the incumbent. I expect to raise even more than $350,000 from my primary donors. Can you write me a check for $2,500?”
One of the biggest mistakes candidates make in campaign fundraising is focusing on their total raised instead of cash on hand. You can’t spend what you don’t have.
As they get to the end of a filing period, many political campaigns will tell folks how much money they have raised for their entire campaign. Missing from this campaign fundraising conversation is what they have raised for the quarter and what their cash on hand is. Focusing on the total raised is bad news and is really a mindset problem. The problem with this is that it really doesn’t matter how much a campaign has raised in total if their burn rate is high and they have already spent a ton of money without a lot to show for it.
What matters most for campaign fundraising and budgeting is the amount a campaign has in the bank and how many resources they will have for the home stretch of the campaign. That is why many folks in the know, such as donors, PACs, and smart reporters, will care more about cash on hand and what a campaign has raised in the last quarter than the total raised.
The following are a few quick tips to make sure you are accurately measuring your fundraising:
Don’t drive by only looking in the rear view
It’s important to avoid falling into the trap of reflecting on the total amount you’ve raised. This type of reflection can be trap that will be hard to get out of, because it may lead you to think that you are doing well, when in reality you are behind and have few resources to spend when it matters most.
Total raised in a primary shows potential
Sure, the total that you raised in a primary is a helpful benchmark to demonstrate the potential for what can you can raise for the general. Looking at other campaigns assets, such as the number of small dollars that you raised online, can also be helpful benchmarks. But once you’ve won the primary, you still have a great deal of work to do to get that money back in the door. Many donors will be watching to see what your campaign raises in the quarter after the primary and how much you keep in the bank.
A total fundraising amount that includes primary spending is overvalued. Once you have spent it, that money is gone and it will take hard work to rebuild your cash on hand.
What you spend matters too
How well you budget for your campaign really matters. This means working to keep a low burn rate and avoiding overspending on things like staff, t-shirts, yard signs etc. In order to be successful, it’s important to have a real campaign budget and stick to it by comparing actual spending to what you’ve budgeted on a weekly and monthly basis.
Make your calls
For campaign fundraising, nothing takes the place of call time. Online and events can help, but it is a much lower percentage of your campaign fundraising than call time. Make your calls and block out the time. Use this time effectively and get the money you need by doing the hard campaign fundraising work. Campaign fundraising is a marathon, not a sprint, and you can’t do it all in one day. Yes, it sucks, but please go make your calls.
Bottom line: A laser focus on cash on hand will help you win.
Have questions on how to better focus your campaign fundraising? Want to chat about cash on hand vs. money raised? Drop us a note.