"What the Pundits Missed: The Real Value of Kerry's Endorsement of Obama"

DHinMI, front paged on Kos:

A few days ago, during the weekly news roundup on NPR's Diane Rehm Show, Rehm asked her guests what they thought of John Kerry's endorsement of Barack Obama. The panelists—Tony Blankly, David Corn and John Harwood—were a fairly sharp bunch (even though Blankly is a rightwing tool). Their assessment? Didn't mean much. Kerry was old news. Sure, he had a fundraising list to give Obama, but everyone knows who those donors are, and Obama would already have reached out to them.

Man, did they miss the point.

Sure, most of the big donors are known to the fundraising experts Obama has on staff, and to the regional fundraisers on Obama's finance committee. But what they don't necessarily have, and what the Kerry "list" may provide is the detailed contact information that makes a cold call far more effective, or helps people figure out how best to appeal to the prospective donors. The Kerry database—if he makes it fully available to Obama—is a treasure that even the Clinton machine would envy. Kerry raised more money in direct donations than Bill Clinton ever did, so the number of contacts is huge. But with that data will come invaluable background: policy interests of the donors, their business background, the name of their spouse and their personal assistants/gatekeepers, where they spend their summers, who they did fundraisers with in the past, cell phone numbers, direct personal emails addresses and all kinds of other information.

But lets get past that. Those are details that make a fundraiser or campaign operative salivate, but we'll forgive the journalists for not understanding the micro-mechanics. But what they really missed is related to a much bigger trend in American political campaigns in recent years, especially on the Democratic side: the rise of the internet and the growing importance of small donors.

In 2000, only 17% of the money donated to Democratic and Republican candidates was in amounts of less than $200. But through May 2004—essentially the primary season—over a third of the record amounts given to the presidential candidates came in small donations. This trend has accelerated, with small donors—who typically engage later in a campaign, and don't contribute as large a share of the total take early in a campaign cycle—already reaching 2004 total percentages as early as the second quarter of last year:

From April through June, donors who gave $200 or less accounted for 26 percent of the contributions the candidates collected from individuals. Compared to the first three months of this 2008 election cycle, small donors increased their giving to the candidates 84 percent and just about doubled their share of the money raised from individuals. In January through March, donors contributing $200 or less accounted for 14 percent of individual money. The Republican field of candidates has been slightly more reliant on smaller donors than the Democrats, although the GOP has raised fewer dollars from them.

One of the best things about small donors is that their contributions are almost pure net gain:

But nothing has succeeded for Kerry like the Internet. Kerry has raised $57 million through online donations, or nearly one-third of his total. Bush, by comparison, has raised a mere $9 million online. The beauty of these contributions, says Kerry Internet fund-raising director Josh Ross, who took a leave from his job as a vice-president at Silicon Valley company USWeb, is that the donations are "low-effort and high-margin." The cost of raising $1 via the Net is about 3 cents, vs. 15 cents for a telemarketing call or a piece of direct mail. And five-course dinners that attract high-rollers who can give up to $2,000 apiece can eat up 25 cents of every $1 raised.

Here's the key to the value of Kerry's databases: federal campaigns must provide the Federal Elections Commission the name, address, occupation and employer of donors who give more than $200. It's illegal to use information pulled directly from the FEC website for fundraising solicitations. However, there are entities that compile and enhance the FEC data and provide access to the data for a fee, and since it's not technically the FEC, it's legal to use this compiled and enhanced data for fundraising purposes. But donors under $200 don't show up in any of the standard databases, and nobody has a central list of the small donors to Kerry's campaign...except, of course, John Kerry. And on Thursday, Kerry emailed his list explaining his endorsement of Obama, and asking them to contribute to Obama's campaign.

Kerry's email also demonstrates the third reason why the Kerry endorsement is a huge boost to Obama. Kerry was really the first Democrat nominated for President during the political maturation of the internet )(PDF). Organizing online, direct communications from a candidate to your email inbox, online fundraising, social networking...none of these things were common prior to the 2004 campaign, and John Kerry became the nominee in time to assemble a massive email and online donor list, currently the best held by anyone in the Democratic party. Now he can communicate very inexpensively with millions of people, and that email information is supplemented with other personal information like addresses and donor history. Not only can he raise money, he can deliver messages directly to known voters at a minuscule cost.

Kerry's endorsement shouldn't be overestimated. There are few endorsements that swing lots of votes. In fact, the endorsements of executives—governors and mayors—are often more valuable than legislators, even U.S. Senators, because executives usually have larger staffs of operatives and better GOTV networks. People seldom vote for someone simply because someone else they like or support says to. But Kerry is the most recent Democratic nominee, and while many Democrats thought he ran a less than inspiring and aggressive campaign, he's generally well-liked and well-respected, and there's little negative that comes from his endorsement. But the real value isn't the intangible value of John Kerry saying he likes Barack Obama and you should too.

The value is that it will raise lots of money for Obama, with little cost, and provide him a means of inexpensively delivering his campaign message to voters known to be committed Democrats highly likely to vote in their state's primaries.

Barack Obama