The Democratic National Committee has a money problem. And that could hurt its nominee’s chances of beating President Donald Trump in 2020.
In
the first four months of 2019, the party spent more than it raised and
added $3 million in new debt. In the same period, its Republican
counterpart was stockpiling cash.
Democratic donors overall have
been generous, pouring three times as much into their party’s
presidential and congressional campaigns in the first quarter of the
year than Republicans gave to their national office-seekers. But the DNC
isn’t benefiting from the same donor enthusiasm, putting at risk its
ability to help the nominee take on Trump, donors said.
Whoever wins the party’s nomination will rely heavily on the
DNC in the general election for organizing, identifying voters and
getting them to the polls. That will ultimately cost hundreds of
millions of dollars by election day, but the party needs to spend early
to prepare, which is why it’s been borrowing money. It’s also sending
out fundraising appeals under the presidential candidates’ names,
something it’s never done before.
"It’s trouble, it’s going to affect us," said Allan Berliant,
a Cincinnati-based Democratic bundler, who says the party needs to open
offices and get boots on the ground around the country. "All of that
starts with fundraising," he said.
Party officials and fundraisers
blamed the deficiency on several factors, and chief among them is
competition from the 23 Democrats who are running for president and
vacuuming up contributors’ cash. Giving to the party isn’t as compelling
as supporting the presidential hopefuls, said John Morgan, an
Orlando-based trial attorney and Democratic fundraiser.
“Do you want to fix up the barn or do you want to bet on the horses?” he said.
But
major donors also pointed to the perception of some contributors that
the national party is disorganized -- a hangover from the 2016 election.
The growing schism between the old-guard establishment and the younger,
activist wing could be discouraging donors, too, they said.
Fundraising Compared
By the end of April, the DNC
had collected
contributions of more than $24.4 million, but had spent $28.4 million,
according to the latest disclosures. It had $7.6 million cash on hand,
$1 million less than in January. It posted $6.2 million in debt,
including bank loans and unpaid invoices to vendors, Federal Election
Commission records show.
That compared with the
Republican National Committee, which thanks in part to Trump’s non-stop fundraising since winning the White House
had $34.7 million in the bank and no debt. It raised nearly $62 million so far this year, two-and-a-half times the DNC’s haul.
‘Fundraising Machine’
Democratic
rainmakers said contributions should pick up as the crowded field of
presidential hopefuls thins. "We will have the largest and most
enthusiastic fundraising machine that the Democrats have ever seen,"
said Chris Korge, a longtime Democratic bundler who took over the
party’s fundraising operation in May. The Miami-based attorney and
investor said he’s educating donors on how the party is investing its
funds, and said money won’t be a problem, even if Republicans outraise
it.
Democratic donors elsewhere have been generous. From January
through March, 16 presidential candidates collectively raised $77
million, or $3 million more than Trump’s committees and the Republican
National Committee combined.
That follows the 2018 midterms in which
Democratic committees of every type spent $525 million more than
Republicans, according to the Center for Responsive Politics.
The national party has been overshadowed by other Democratic
organizations on a number of fronts. The Democratic Congressional
Campaign Committee, which supports House candidates, says it has to
protect the House majority that Democrats won in 2018. Its Senate
counterpart, the Democratic Senatorial Campaign Committee, is aiming to
end Republican Majority Leader Mitch McConnell’s tenure.
Messages Resonate
Both messages resonate with donors, bundlers say. The DCCC has raised more than $40 million this year, besting the DNC’s totals each month. The DSCC has raised $18 million.
The
DNC is also competing with super PACs, which can accept unlimited
amounts from companies, unions and individuals but can’t coordinate with
candidates. Priorities USA, the main super PAC for supporting the
party’s presidential nominees, counts among its donors some of the
biggest Democratic givers, including billionaire investor George Soros
and hedge-fund operators S. Donald Sussman and James H. Simons.
"There’s a lot of competition for dollars right now," said
Jamie Ansorge, a member of the DNC’s finance committee who focuses on
young professionals in the New York City area.
Splitting Contributions
For
the first time, the party is sending fundraising pitches from its
presidential candidates to its vast donor list -- and splitting the
contributions evenly. Campaigns get another set of donors to pitch to,
and the party gets to cash in on the crowded field. For example, the
party has emailed solicitations for former Texas congressman Beto
O’Rourke, New Jersey Senator Cory Booker, South Bend, Indiana Mayor Pete
Buttigieg and California Senator Kamala Harris.
“The Democratic
nominee for president will need a strong Democratic Party,” O’Rourke’s
email said. Booker cited the financial advantage Trump and the GOP have
in the early going, and the need to keep up.
The DNC isn’t sharing
in the money bonanza in part because of the perception that it hasn’t
recovered from 2016’s self-inflicted blows, fundraisers said. Emails
hacked by the Russians and published by WikiLeaks showed
that it was working to help Hillary Clinton defeat Bernie Sanders for
the nomination even though it was publicly pledging neutrality. That led
to the resignation of DNC chairwoman, Debbie Wasserman Schultz, on the eve of the Democratic Convention in Philadelphia.
“Debbie
Wasserman Schultz really destroyed a lot of confidence in the DNC for a
lot of people and for a lot of different reasons,” said Morgan, the
Orlando-based fundraiser. Her favoring of Clinton and mismanagement of
the party continues to give donors pause, he said.
When she stepped down, Wasserman Schultz cited the successes
of her tenure, including aiding Obama’s reelection in 2012,
strengthening partnerships with state parties and conducting the 2016
primary in a statement. Wasserman Schultz didn’t respond to a request
for comment.
Some potential contributors would rather not support a
party they perceive as dominated by establishment figures and their
more moderate approach to issues, said one bundler who who has held
fundraisers for the party, but asked not to be named because he’s not
authorized to speak publicly on its behalf.
To compete in 2020,
the
DNC has acquired 100 million cellphone numbers during the midterms,
allowing the party to make contact with voters via text message.
This
summer, it will train about 1,000 college juniors who will be ready to
hit the ground running next year and is stressing those tactics with
donors.
Tom Perez, who took over as chairman in 2017, in a recent
email solicitation highlighted the effort to train college students and
warned it might be scaled back if its fundraising goal wasn’t met.