Getting Started in Campaign Finance
Testing the Waters
Before a candidate starts raising and spending money on their campaign, they should know if running for office is viable.
I realize I may have got a jump start on the campaign finance discussion last week. Though it was the first post on campaign finance, I jumped right into talking about committees and expenditures and talking about data in aggregate. That’s fine for someone close to the material like me. Most people aren’t as close to the material and lack a frame of reference for the narratives derived from fundraising and expenditure data. I’d like to reach a broader audience than campaign finance nerds, and make a more meaningful impact than dazzling people with meaningless numbers.
To provide context for a discussion about campaign finance, we should start with a candidate for US federal office. A candidate is someone that wants to win an election to serve in the United States House of Representatives, Senate, or serve as President of the United States. Typically a person that wants to run in an election campaigns for that position by identifying or developing a platform of aspirations and initiatives that appeal to a broad set of voters. The candidate campaigns on their platform by finding out where the voters are and appealing to their interests. The candidate needs to raise money to spend on the materials appealing to the voters, so the candidate needs to solicit donors. Voters and donors may be the same set of people, or different sets of people. On Election Day the voters vote and a winner is declared by tallying the votes for each candidate. In most districts, a candidate wins when they have the most votes. Some districts have different rules, for example a candidate may have to win by obtaining a majority of votes (>50.0%). The office of the President of the United States is decided by the famous electoral college.
Between the time a person decides they want to win an election and Election Day, that person has to generate enough money through campaign donations or contributions to pay for their expenditures. Though we won’t go into detail now, expenditures come in two varieties: operating expenditures and independent expenditures. A candidate may hire people to campaign with them. They may advertise their platform in a newspaper, on tv, or on the internet. They may pay people to make those ads. Between staff, advertising, administrative fees, travel, and many other expenses, a federal election campaign can be a costly endeavor. Maybe a candidate has second thoughts when they come to this realization.
Maybe the potential candidate wants to test the waters. Testing the Waters is an optional phase for a candidate in the election cycle. Testing the waters is a phase where a candidate explores the feasibility of becoming a candidate [Congressional Candidates and Committees Campaign Guide, October 2021, pg. 1]. Two super easy ways to evaluate feasibility are:
Set up a web site with polling functionality. Take out an ad in the local paper, or link to the poll on social media. Leave a leaflet in local restaurants with your site and poll. See the results. Designing a poll is not a trivial thing, and you should hire a professional polling consultant if you want actionable results. See if the voters respond to you and your message. See if you can get some percentage of the social media likes and shares as the incumbent or other competition. This should be relatively affordable in 2023.
Get an outside perspective. Speak with a consultant or coach about the qualities exhibited by candidates seeking such an office. US federal offices are prestigious positions with a huge amount of influence over every citizen’s life. The character traits, skills, and politicking required to succeed are identifiable and people can be coached on improving those qualities. Does a candidate have what it takes to run an aggressive campaign before getting to office? Maybe, maybe not. Better to find out early before sinking a ton of money into a doomed campaign.
A candidate starts campaigning as soon as they raise $5,000 and do any of the following:
Make or authorize statements that refer to themselves as candidates (“Smith in 2024” or “Smith for Senate”);
Use general public political advertising to publicize their intention to campaign;
Inform the media (either directly or through an advisor) that they will announce their candidacy on a certain date;
Raise more money than what is reasonably needed to test the waters or amass funds (seed money) to be used after candidacy is established;
Conduct activities over a protracted period of time or shortly before the election; or
Take action to qualify for the ballot.
Testing the waters is testing the waters for a reason. The $5,000 limit on raised funds is a very low limit for federal office. The intent is to quickly and easily test the viability of a campaign and then declare yourself a candidate or not.
Once the testing the waters period ends, a candidate must
register with the FEC as a candidate (FEC Form 2 Statement of Candidacy).
designate and register a principal campaign committee.
begin filing reports. The first report includes all fundraising and expenditures incurred while testing the waters.
Here is how we get to the discussion on committees. A committee is a campaign vehicle for a candidate. This why it is natural to discuss spending by committee when looking at each candidate. That candidate spends on their campaign through their committee.
Next time I will cover the FEC Form 2 Statement of Candidacy, committee structure, and starting a campaign.
In the mean time, have you seen any interesting political advertisements lately? I’m always looking for some good ones. For subscribers only, if you see any political advertisements you think someone should know about, screenshot them and send them to keysreport@substack.com.