Running for Office: How to write a finance plan

To: Interested Parties

From: NextDems

Re: Writing a finance plan

Date: December 16, 2016

The most important part of writing a finance plan is to determine where you are starting from and where you need to go– this will help you determine the best way to get there. Once you fully assess what resources you can obtain relatively easily and what resources you’ll need to win your campaign, you can start thinking about how to get from Point A to Point Z. This memo will break down that process in addition to explaining other best practices and obstacles you might encounter while raising money for your campaign.

For the purposes of this memo, we will assume you have begun this process before officially launching your campaign. Completing the first steps before an official launch will allow you to use the campaign’s time most efficiently. There will also be tasks to complete after Election Day has passed. So, this memo will be broken out into pre-campaign, campaign, and post-campaign sections.

Pre-campaign:

Assessing your initial resources

Block out 3–4 hours for yourself, and if possible have someone sit with you during this process. It is easy to get distracted, and having someone to keep you on task will be helpful and will make the process more enjoyable. If this person has the ability to go on to become your finance director once you launch your campaign, that’s all the better.

1. Take out your phone, your computer, and a physical Rolodex if one exists. List out every single person you have ever emailed, spoken to, or formed any kind of meaningful connection with. If you have spoken to them for more than a few minutes or exchanged more than one or two emails with them, it is advisable that you put them on this list.
2. Once the list is assembled, go through each name individually and assign a dollar value to their name: how much money do you think you could convince them to donate to your campaign? Whatever number you are thinking of, it is advisable that you double it.
3. You should have a list now of names and dollar amounts next to them. Add the numbers up and you have a final number of how much seed money you think you can raise off the bat for your campaign. Keep this document (we recommend an excel file), as you will load it into your CRM after launching your campaign (more on that later). This excel file should have a person’s name, address, phone number, your connection to them (the campaign should determine a code to assign people based on how you know them), the dollar amount you’ve assigned them, and a notes section for anything else.
4. Does your state or municipality offer federal funding? In some areas, like Connecticut or Seattle, there is a vibrant public finance system that will offer you matching funds if you meet certain criteria. It may or may not be worth it to accept public funding, if it exists, depending on the rules for your particular race.

Determining what resources you’ll need

1. Look online at the FEC or your state’s campaign finance website to determine how much successful candidates have raised for this type of campaign in past years. Is that number more or less than the number you came up with earlier in this exercise?
2. What did previously successful candidates spend money on? Their expenses will be in their finance reports. Did they spend much money on staff? TV? Mail? Did they do anything on digital? This process will help you determine how you will need to allocate your own resources. IMPORTANT: Do not take their campaign strategies as gospel. But looking at past efforts, both successful and unsuccessful, can help you plan for the future.
3. What does your district look like? Are there a bunch of retirement homes? It’s likely that the best way to reach those voters will be through mail. Are there many Millennials in the area? Digital ads are a tactic to keep in mind. Working out the best way to reach your voters before actually launching your campaign is a useful way to think about what you’ll need to spend money on.

From plan to action

Now it’s time to move from planning to action — starting your campaign and marching toward victory.

Picking a CRM

Now that you’ve launched your campaign, it’s time to make sure you have a tool to help you keep your data in one secure place. If you’re running a small enough campaign, an excel file might be enough. However, the majority of candidates should plan on using a CRM like NGPVAN to organize their data. Using this tool, a finance director can upload their excel file to the CRM and sort the data by category (like a code you’ve created based on how the candidate knows a certain contact), how much money you’ve determined you’ll ask them for, or some other metric. You can also print these names neatly so that the candidate can physically interact with them while making calls (some candidates may want to go paperless, but others will insist on having a physical document in front of them).

Blocking out a path to bridge the divide between your initial resources and the resources you’ll need to win

If your campaign is like the vast majority of campaigns, it will need to determine a way to gain resources beyond its seed money. That is where political considerations come into play. Your finance director and campaign manager (if you have money to afford two staffers) should be working hand-in-hand to make sure the money you are raising is politically safe (i.e. you aren’t raising money from donors with a history of felonies or pro-life groups while working with pro-choice activists).

1. Barring radical ideological changes between the candidate and their circle of contacts, the seed money in your initial plan should be relatively easy to raise. In most cases, candidates who cannot raise this seed money fail because of a lack of effort. Allocating the necessary time to explain why you are running, how you are going to win, and why you want your personal contacts to be invested in your success is crucial.
2. Once the campaign has raised its seed money, it’s time to look at other sources of revenue. In most cases, that will be money from historic donors and ideologically motivated groups (i.e. PACs).
3. Historic donors: Look at the contribution lists of Democratic candidates from your district in the past. This will be available on the same website you used previously to look at the expenditures of successful candidates. With FEC and state laws in mind (it is illegal to simply print a candidate’s contributor list and start calling them), see if you can find common names among the candidates’ lists. Are any of them names that are on your personal list? Oftentimes, you may not realize that your acquaintances might be historic donors already, and you can use this information to determine how much money to ask them for (depending on your relationship with them, they might give more to you than the generic candidate). See if you recognize any large donors (usually those who’ve given at least half the legal maximum amount allowed), and be sure to add them to your excel file. As you add to names to your excel file, be sure to add how you got this name in the notes section.
4. Ideologically motivated groups: If you are running for state or local office, this list will likely be exclusive to unions and groups like EMILY’s List. Democratic candidates in the past might not have taken full advantage of all these groups have to offer, so don’t rely on the donor lists of Democrats in the past to determine who to reach out to. Talk to the local party committee to see what groups they have worked with in the past, form a list of unions in your general area (go beyond your district if you are running locally), and talk to activists in your area (many of whom will be members of the local party committee) to determine if any groups particular to a certain identity are involved in your district’s political circle (i.e. EMILY’s List for female candidates, Victory Fund for LGBT candidates, etc.). Additionally, if you happen to belong to a union, make that point clear in your first meeting with any union.
5. These ideologically motivated groups will give the campaign a questionnaire to be filled out before endorsing you. It is important that the campaign block out time for the candidate to go over these questionnaires with the finance director if it is a larger race, or the campaign manager if it’s a smaller race.
6. Assume that you will win the endorsement of each ideologically motivated group you list (unless there is an obvious barrier, such as EMILY’s List only giving to female candidates and you are male). You can safely assume that each group will donate ½ of the maximum limit to your campaign (some will give more and some will give less), and add that amount to your initial seed total. With luck and hard work, you should be able to hit this number. Is it more or less than the total amount you’ve determined you need to win? If less, you have more work to do. If more, the campaign should start thinking of innovate ways to spend that money (for example, previous candidates have not been successful in their candidacies, but they’ve also not spent money on digital radio).
7. Call time

A campaign must budget at least 10–20 hours a week to make finance calls; this is called “call time”. The candidate and finance director (or manager if it’s a small race) will be involved in daily call time, and the campaign’s calendar must reflect this so you can plan everything else around it. In a well-run campaign, call time is sacred above all else. Raising money is simple, but it’s not easy — it requires a substantial time commitment. 90% of the time that a candidate loses, it is either because of external factors they couldn’t control, or because they didn’t make the time to raise the money.

Making the ask

1. Your campaign is off to a great start, with plenty of people feeling energized. Now, it’s time to take advantage of that energy. When people ask you what they can do to help your campaign, the first ask should be for money. It is likely that you have begun your campaign several months before Election Day, and so it is too early to start asking people to knock on doors.
2. When crafting an ask, you should keep local, state, and national political considerations in mind. You should also have different asks for different people. For instance, asking a former teacher of yours for money is going to be different than asking a labor union for a maximum contribution.
3. For the purposes of this memo, let’s assume you need to write an ask for a cold call. This person has donated to Democrats in the past, but has never heard from you personally.
4. There are three main parts to an ask: Who are you? Why are you running? How are you going to win?
5. When asking for money, the most important thing a candidate can do is be silent after making the ask. After asking for a dollar amount, the person who speaks next loses. Meaning, if you keep silent for a long enough time, the person you’re speaking with will likely feel awkward and at least offer to donate a lesser amount than what you asked. Do not give this person an “out” by trying to spare their feelings.

Re-solicits

You convinced someone to give to your campaign — hooray! Make a note of their contribution in your CRM, but don’t put them aside for good. The most likely people to donate to your campaign are people who’ve donated before. Rely on re-solicit calls particularly around finance reporting deadlines (end-of-quarter emails and calls are a traditional practice donors expect), and deadlines around your budget (when you need to make a media buy, take a poll, etc.). If you call a donor with an ask that you need a bit more money in order to commission a poll or because you need to raise a certain amount of money before you can start advertising, the donor will see why their money is needed immediately and be more willing to give.

Reporting

Laws vary greatly depending on where you are running, but every candidate running for political office must make some type of public disclosure about the money they raise and what they spend it on. If you are running for federal office, reporting is quarterly and you can access all relevant materials on the FEC website. If you are running for state or local office, check the local board of elections website and ask people who have run for this office previously about what they did. Every single contribution and expenditure should be reported, including in-kind contributions (i.e. a friend buys snacks for a meet-and-greet they are hosting at their house, or if someone with a specific skill like graphic design decides to design something for you for free). In-kind contributions are included as part of a donor’s total contribution, so keep that in mind as well (i.e. a person might have donated $500 to your campaign and in-kinded another $100, where the legal limit is $500 total; they have now given more than the legal amount).

Post-campaign — Closing your report or leaving it open

The campaign is over — hooray! Did you lose? You should pay off any debts you might have and then close your account with the FEC or state finance agency. Did you win? You’ll want to keep the account open for re-election, or perhaps change it from a principal campaign committee to a leadership PAC if you want to use it as a vehicle to raise and spend money on behalf of other Democrats. Regardless of what you decide to do, be sure to check with the FEC/state agency to make sure that everything you are doing is within the law. If necessary, you can often rely on the advice of a donor who happens to be a lawyer, or a lawyer for the state party to provide guidance.