EXCERPT - Money Signal:  How Fundraising Matters in American Politics

Written by Danielle M. Thomsen

It seems increasingly untenable to say that money doesn’t matter in politics.  Money is one of the most widely used signals of viability, strength, and support. Several key actors and spectators—candidates, donors, journalists. and party leaders—turn to money as a focal point.

Candidates today start raising money earlier and earlier in the cycle. They strive to post strong early totals to convey the correct impression about their campaign, and those who fall short are more likely to drop out. Donors steer their money to candidates with a strong track record of fundraising. Journalists increasingly reference dollars to indicate electability in their coverage of races. Party leaders reward better fundraisers with institutional and policy rewards in office.

Approaching dollars in this way changes how we understand the value of money. Most studies have examined the impact of money on votes at the ballot box or votes in office. This book suggests that the power of money is different. Money serves as a focal point long before the election and well after the votes have been cast. Congressional elections are low-information contexts. Candidates and officeholders who raise large sums of money are seen as viable and worthy of attention, which results in a feedback loop where they are deemed more formidable to other candidates, more appealing to donors seeking to give their money efficaciously, more competitive to journalists who cover frontrunners, and more electable to party leaders whose goal is to win majorities.

A key part of this story is that we have to look beyond the ballot to capture the meaning of money. Early money is critical because it serves as a first impression and molds expectations about what is likely to follow. Fundraising ability is the main heuristic used to judge candidates and officeholders, and raising money is a top priority for those who want to win or retain power.

This book does not delve into the many attributes for which money serves as a proxy, nor does it attempt to tease out which attribute is most central. Rather, the goal is to provide a new vantage point into why and how money matters and offer a new perspective into why candidates and officeholders dial for more and more dollars with each election cycle.

The analyses in this book provide the most comprehensive study of money, and of early money in particular, across more than four decades of elections. This historical lens is vital because the political and electoral landscape has changed in profound ways during this period. For one, the time horizon of congressional elections has shifted, with more of the important action now happening earlier in the campaign cycle. Primary elections have become increasingly relevant in the selection of officeholders as more lawmakers are selected from safe partisan districts. Scholars and practitioners have given more attention to primaries in recent years, because for many lawmakers, their most serious competition would happen well before November.

In addition, technological innovations have transformed the nature of campaign finance reporting. FEC reports have been publicly available for decades, but with the rise of the internet, transparency is now coupled with accessibility. Anyone and everyone can access detailed fundraising and spending data in seconds. The days of paper filings and handwritten reports are long gone. The correct fundraising impression matters because those who want to follow the money are able to, and they can do so more easily today than ever before. In an era where “big data” reigns, campaign dollars are measurable and comparable across candidates. These changes provide an important backdrop for why money has become an increasingly salient metric.

The intense focus on money raises a number of concerns for American democracy.

First, an elite donor class structures the selection of our representatives by steering resources and momentum to some candidates over others. Candidates and officeholders respond to growing fundraising demands by raising more money, and they spend a lot of time talking with donors. A host of studies have shown that donors are unrepresentative of the public in many ways: they are older, wealthier, whiter, better educated, and more ideologically extreme than nondonors (e.g., Bafumi and Herron 2010; Barber 2016; Bonica 2014; Bonica and Grumbach 2023; Grumbach and Sahn 2020; Hill and Huber 2017; Pew 2018). Worse yet, more and more money comes from a sliver of very rich megadonors (Bonica et al. 2013; Page and Gilens 2020). It is unsurprising that economic inequality has been fueled by government policies (Hacker and Pierson 2010a,b).

Second, fundraising is a central reason why so many candidates do not run and why our institutions are unrepresentative of the public. Carnes (2018) finds that the high price tag of running for office keeps working-class individuals out of politics, and Bonica (2020) shows that lawyers’ early money advantage explains why they are so much more likely to be elected. For those in office, the constant need to fundraise—from nearly anywhere and anyone—has negative consequences for representation. Canes-Wrone and Miller (2022) find that lawmakers who receive more out-of- district contributions are more responsive to the national donor base. Unlike Mayhew’s (1974a) reelection seekers, fundraising outside of the district is a key aspect of representation in the current money-driven era.

Finally, we should be critical of the emphasis on money because of its implications for perceptions of democratic legitimacy. Majorities of Democrats and Republicans say that donors have more influence in politics (Lessig 2011; Pew 2018; Primo and Milyo 2020). Unsurprisingly, donors have a more optimistic view of legislator responsiveness: 37 percent ofAmericans say that their representative would help them with a problem if they contacted them, compared to 53 percent of those who donated money and 63 percent of donors who gave more than $250 (Pew 2018).

The widespread acceptance of and belief in donor influence undermines basic principles of democratic government. Campaign finance reform may come with its own set of unintended consequences, but most Americans believe it would be a step in the right direction. The unseemly amount of money in politics may be the straw that breaks the camel’s back. It is increasingly hard to ignore the hundreds of millions of dollars that flood into the most high-stakes elections each cycle. In Georgia’s 2022 Senate race alone, the two major-party candidates raised a quarter of a billion dollars combined (OpenSecrets 2023b).

While the Supreme Court has long been resistant to reform, there is widespread dissatisfaction

with the status quo. Members of Congress hate fundraising; political candidates hate fundraising; and the public is overwhelmingly supportive of spending limits for candidates, organizations, and political parties. The forces for resistance are well known, but optimists can point to other ingredients that might precipitate change. Leaning out from money would be better for candidates and lawmakers, for the policymaking process, and most importantly, for American democracy.

---