"Obama’s Camp Sees Big Value in Small Donors"

NY Times:

Senator Barack Obama was the guest of honor at a dinner at the luxurious Mark Hopkins Hotel in San Francisco this spring with a few hundred lawyers, executives and investors. The guests drank a boutique beer with Mr. Obama’s face on the label and contributed more than $1 million in $2,300 checks to support his bid for the Democratic presidential nomination.

Just moments before he arrived, Mr. Obama had said goodbye to a less exclusive crowd of 10,000 that had gathered to hear him speak across the bay in Oakland. They paid nothing to hear him, but spent $40,000 on Obama T-shirts, baseball caps, buttons and other knickknacks. And the Obama campaign registered each of the purchasers as one of the record 258,000 contributors it signed up in the first six months of the year.

Since he got into the race, Mr. Obama has hopscotched from big-ticket to big-crowd events across the country, trying to turn the early excitement about his candidacy into campaign cash and a national political organization.

Like other candidates, he has worked hard to cultivate a network of bundlers, who can solicit the checks from individual donors for the legal maximum of $2,300 that are the mainstay of any major campaign. But to capitalize on his celebrity, Mr. Obama’s campaign has also employed novel tactics — like counting sales of $5 speech tickets or $4.50 Obama key chains as individual contributions — to pump up his numbers and transform grass-roots enthusiasm into more useful forms of support. No other campaign is known to have listed paraphernalia sales as donations.

The combination has enabled Mr. Obama to raise more money for his primary campaign in the first six months of the year — $58.4 million — than any other candidate in either party. Just as important, his campaign advisers say, he has built a unique roster of small donors who may give again or volunteer as the race continues, and which enables them to portray his campaign as powered by a vast army of regular people across the country.

Mr. Obama’s early lead in fund-raising is by no means a guarantee of success when the voting starts next year.

But his campaign’s ability to harness the energy of its early supporters and outpace even the well-established fund-raising machine that Mrs. Clinton brought to the race seems to have settled any question of whether Mr. Obama of Illinois, after only two years in the Senate, could hold his own in a field of candidates with more national experience and exposure.

Of the $33 million Mr. Obama raised in the second quarter, about a third consisted of donations of less than $200 — more than the $10 million raised in $2,300 checks from big donors. Mrs. Clinton, in contrast, raised $2.3 million in donations of less than $200. Contributions of $2,300 made up $12.3 million — or more than half — of the $21.5 million that she raised for the primary during the second quarter. Both candidates now have about the same amount of cash to spend on the primary.

Mr. Obama’s roster of 258,000 donors has exceeded the national mailing list that Mrs. Clinton accumulated through her two Senate races and Bill Clinton’s two runs for the White House. None of the other primary candidates in either party has claimed more than 100,000 individual donors.

In some ways, Mr. Obama’s donor base differed from those of his rivals. An analysis of his Federal Election Commission filing using census data by ZIP code found that in the 3,210 ZIP codes with the largest proportion of black residents — at least 25 percent — Mr. Obama led the other candidates for both parties in money raised in the first half of the year. He received $5.2 million from those ZIP codes in the first half of the year, while Mrs. Clinton received about $3 million.

While polls suggest that Mr. Obama at this early stage is running particularly strong among well-educated and affluent people, the analysis found that the contributions he was required to report to the Federal Election Commission — those of at least $200 — came from areas with an average household income of $102,000 a year. That was roughly in the middle range for all the leading candidates in both parties, somewhat more affluent than those of former Senator John Edwards’s and somewhat less affluent than Mrs. Clinton’s.

David Plouffe, Mr. Obama’s campaign manager, said the campaign saw multiple advantages in events like the $25-a-ticket rally that attracted 3,500 to hear Mr. Obama speak on June 29 in Minneapolis. It raised about $87,500, but Minnesota is also one of the enlarged cluster of states expected to hold their primary elections on Feb. 5. Although all the candidates will have plenty of staff members on salary in the first states of Iowa and New Hampshire, Mr. Plouffe said, Minnesota is a state where the campaign will have to depend much more heavily on volunteers.

“Obviously we raised a good amount of money, and for a lot of these people it won’t be the last time they give,” he said. “And it is also going to be the foundation of an organization.”

As for the Obama merchandise, sold mainly through the campaign’s Web site, Mr. Plouffe said it had brought it several hundred thousand dollars. “It has been a real source of revenue for us,” he said. “And obviously you still get people wearing your hats and displaying your bumper stickers.”

Tickets and merchandise sales have added at least tens of thousands of names to Mr. Obama’s donor rolls. Mr. Obama also attracted crowds of 20,000 in Austin, Tex., and Atlanta and 10,000 in Cleveland and Los Angeles, with similarly brisk sales in Obama gear at each of them.

In 16 other cities, his campaign says, it has sold tickets for $5 to $35 for events that attracted a total of 42,500 people — about 15 percent of his roster of contributors. And the campaign sent each ticket or T-shirt buyer an e-mail message inviting him to forward a solicitation to each name in his e-mail address book, capitalizing on contributors’ social ties instead of paying for e-mail lists.

What is more, even while building his database of small donors, Mr. Obama has relied on a relatively conventional network of big donors for a majority of his money. Even with his public emphasis on small donors, Mr. Obama raised about $29 million — about half his total fund-raising for the first six months of the year — from donors who gave more than $1,500.

One of his campaign’s first recruits around the start of the year was Julianna Smoot, his finance director, who oversaw record-breaking fund-raising for the Democratic Senatorial Campaign Committee in 2006 and Senator John Edwards’s strong early fund-raising for the 2004 campaign. One of the highest-paid employees on Mr. Obama’s campaign payroll, she earned about $34,000 a quarter, according to his filings.

Ms. Smoot brought extensive connections to veteran Democratic fund-raisers around the country, and by the second quarter the Obama campaign had enlisted 134 so-called bundlers adept at collecting $2,300 checks from wealthy friends and associates, according to a list disclosed on the campaign’s Web site.

Mr. Obama has also collected large sums from the employees of a relatively small number of companies. One big employer of Mr. Obama’s donors was the investment bank UBS, whose top executive in the United States, Robert Wolf, is a prominent Obama fund-raiser. UBS employees gave Mr. Obama about $195,000 in the first six months of the year.

“I think he is a machine,” James Torrey, a New York investment fund manager who is another Obama bundler, said of Mr. Wolf. “He just walks into the trading room and glared and they all grab for their checkbooks.” (Mr. Wolf said that he did not press anyone but that his close relationship with Mr. Obama may have made it easier for UBS employees to contribute.)

Still, several of Mr. Obama’s fundraisers, who gathered in Chicago on Monday to celebrate their success, said the image of Mr. Obama’s army of small contributors had quickly become an advantage in asking for big checks as well.

“People want to be part of a cause,” said John Roos, a Silicon Valley lawyer who helped organize the event at the Mark Hopkins Hotel. “We all feel that we are part of something much bigger than any individual, and Barack makes us feel that way.”