High Net Worth Households Drive 2018 Out-of-State Political Fundraising
Midterm elections are 6 days away, and Democrats and Republicans have combined to raise more than $2 billion for candidates running for Congress². With the record breaking fundraising, Windfall set off to answer two key questions:
(1) Where is the money coming from?
(2) Which states are the largest benefactors?
Specifically, we wanted to determine if (and how much) high net worth households are reaching across state lines to influence other Congressional elections. High net worth (“HNW”) is defined as households that have more than $1 million in wealth.
For our analysis, Windfall filtered for individual contributions³ directly to candidates, we do not consider donations from PACs and other committees. We also removed contributions from organizations, since individuals make up 99.5% of the funding. Lastly, contributions to joint committees are excluded as these benefit multiple candidates often in different states.
Overall, we can see that the majority of contributions are still generated in-state for races:
While this is useful, we also wanted to understand a bit more about how this broke down by the House or Senate.
As displayed on the left, Senate races have a larger percentage of out-of-state donors. This logically makes sense since there are fewer seats, and thus a larger impact. That being said, the House still has a strong out-of-state fundraising presence.
The next question: who is receiving the money?
Depending on the race, it appears that challengers or open seats tend to fundraise from out-of-state donors less than their incumbent counterparts. With better brand recognition, incumbents are frequently in the news and can generate national support.
We also wanted to understand the breakdown by political party. Interestingly, independents have a higher out-of-state donor count but a lower proportion of out-of-state funds contributed. Much of this can be attributed to Bernie Sanders’ supporters, who often contribute smaller dollar amounts from many more individuals. The map at the top of this article illustrates this impact as a percentage of the overall funds contributed to Vermont.
For our purposes moving forward, we excluded independents and focused on Republicans and Democrats.
Affluent Households Exerting Influence
With the tumultuous political environment, we were trying to understand the type of individual that contributed to out-of-state candidates. Elected officials represent their constituency, which generally speaks to their state, district, etc.
As a reminder: Windfall defines high net worth households as those with a net worth greater than $1 million. We found the influence of high net worth donors on out-of-state races to be quite staggering:
High net worth households certainly would have the capacity to give; however, they also have the ability to influence politicians for regulatory changes, tax policy, and other major legislation. It appears that the high net worth households make up a disproportionate amount of their overall out-of-state fundraising.
According to FiveThirtyEight, there are many close Senate and House races. We’ve outlined the top 5 states in each chamber of Congress and their overall out-of-state fundraising and how much has come from high net worth households:
As seen from the tables above, the importance of fundraising and generating support across state lines may have a large impact on certain key races. We’ll see the impact of this fundraising next week.
We started by asking two questions for this post: (1) Where is the money coming from? (2) Which states are the largest benefactors?
From our analysis, it seems like incumbents and key battleground states have generated national interest, as supported by out-of-state donors playing a critical part of candidates’ fundraising strategy. Moreover, high net worth households are more likely to give to these candidates and represent a disproportionate amount of their out-of-state contributions.
As political fundraising continues to grow and impact the state of elections, Windfall will conduct follow up analyses utilizing our core data asset and joining it with publicly available filings. Keep following us on Windfall’s Medium publication to get notified of additional posts.
Windfall helps you identify, understand, and engage the affluent. We provide you with precise net worth data on affluent US households, allowing you to make informed data-driven decisions.
For more information about Windfall please visit our website: http://www.windfalldata.com.
¹Source: FEC. Donations are aggregated by in-state vs out-of-state contributions by comparing the candidate’s office state vs the state of the contribution.
²Source: The Washington Post: Democratic candidates for Congress have raised a record-shattering $1 billion this election.
³Source: FEC, data as October 31, 2018. Our analysis filters for candidates running for election in 2018, and contributions made after January 1, 2017. We exclude donations with missing information, e.g. no state. Items with a ‘memo code’ are excluded as these contributions have been redesignated or otherwise are not to be included in aggregate totals.