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CampaignGuide

Articles to help you with your political campaign

CampaignGuide - Articles to help you with your political campaign, by CompleteCampagins.com
 

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Budgeting Your Campaign the Right Way: Building a Business to Go Out of Business

Marty Stone

3/19/2007


This article originally appeared in Winning Campaigns Magazine.

The budget is the least glamorous, yet most important part of any campaign.  We hear constantly about who’s raised how much but we rarely hear about fundraising’s mirror image – who’s spent how much on what? 

How many times have we seen candidates with fat war chests lose unexpectedly? Sure, the candidate with the most money wins most of the time, but not every time. 

Most of the time when an under funded candidate pulls off an upset, it is not only because that underdog had a better message but also because that candidate spent his or her money more wisely.  As my campaign manager wife says, “It’s not what you raise, it’s what you spend.” 

The good news is that budgeting is not difficult – it just takes a little time and attention.  And once you have a solid budget on paper, you will discover what I call the wonders of budgeting.  You will have a living roadmap to victory.  Late at night, when your stomach’s churning about the election, your budget can be your security blanket.  And of course, having a budget will prevent you (and your candidate) from the temptation of frivolous purchases.

 

The keys to successful budgeting are setting the right goals, careful monitoring, paying the right prices and knowing a few tricks of the trade. 

Setting your budget goal is pretty simple, but it is amazing how many campaigns get this wrong.  If you are running in a tight race, your goal should always be to budget to zero.  How embarrassing is it when a campaign loses by 1 percent and has $100,000 in the bank?  You do not want to go in debt if you can help it, but you certainly do not want to lose with money left over that could have made the difference.  If the goal of your campaign is to win, the goal of your budget should be to get to zero dollars in the bank by the end of the election. 

The exceptions to the budget to zero rule comes when you are in a race you will easily win and you want to save some money for the next campaign.  Then, you may want to keep some money in the bank.  Or, if you’re slightly behind in a very tight race and are not afraid of debt, you may want to dip into the red.  However, I can tell you from personal experience – retiring debt can be difficult even if you win. 

I hate to push a product (other than my own), but you will never meet your budget goal (getting to zero) without using Microsoft Excel or something like it.  And I don’t just mean filling in the little spreadsheet boxes.  When I lecture at campaign schools, 80 percent of my students say they can use Excel.  When I ask if they use the formulas to add up columns and rows, I get blank stares from too many of them. A budget is a living document – if you change one number, everything must change with it.  And you will make so many changes that doing the math with a calculator yourself is impractical.  The manager must learn to use Excel formulas and should be updating and changing the spreadsheet daily to keep the budget on track. 

What should your budget actually look like?  For starters, you should include spending categories on the vertical axis and months on the horizontal axis.  As you get closer to Election Day, you will want to do a weekly and then a daily budget.  Your spending should be divided into two main categories – persuasion and non-persuasion.  In the persuasion section you should include such voter contact expenses as TV, mail, phones, press research, field, and polling.  Your non-persuasion section should be sub-divided into administrative overhead and fundraising.  As a general rule, you should spend 65-70% of your money on persuasion.  (Note:  the percentage of your budget spent on overhead will be greatly determined by the length of the campaign.) 

Some budget guidelines: 

•          Voter communication (60%-70%)
•          Field (5%-15%)
•          Fundraising (5%-10%)
•          Administration (5%-10%)
•          Research and polling (5%-10%)
•          Earned Media (1%-3%) 

As the manager manipulates the budget data, he or she should plan not just what will be bought but when it should be purchased.  Planning the timing of expenses is critical to managing cash flow in a campaign.  For instance, you are not accurately budgeting unless you plan both the total cost of the mailer as well as the date you will have to pay for printing, which may be different than when you pay for postage.  The manger must also work carefully with the finance staff to ensure that money coming out is replenished with money coming in. 

You cannot sit down to begin your budget until you know what things cost.  And you must be honest with yourself about prices – do your research and do not guess. Include even the smallest expenses.  “Miscellaneous” should not be your biggest category.  There are many sources for most campaign products from TV ads to yard signs – shop around and use your consultants.  Be a tough and informed negotiator and ask a lot of people how much they pay, but do not always buy the cheapest items.  Uncoated paper yard signs in a rainy climate are cheap but a waste of money.  So are autocalls that cost less then 5 cents but don’t calibrate for local phone company voicemail.  You want to be inexpensive but not cheap. Remember – you’re spending to make a good impression on the voters – don’t blow it.
In addition to being frugal, there are a few other ways to stretch your campaign dollars that can help you make your budget more effective.  For starters, replace money with time when you can.  For example, ask volunteers to do your mailers – don’t pay for a mail house.  Also, rent instead of buying when you can.  A campaign owning things like a Xerox machine or computers does it no good the day after the election. One campaign I know of paid $5 for their tee-shirts, sold half of them to supporters for $10 each, and gave the rest away to student volunteers.  Don’t be afraid to be financially creative – use credit cards and CDs just like you would in your personal finances, but remember there is an end date.  Make sure you include a category for expenses that can be paid after the election and realize that you will get tons of late money if you are appearing victorious or even close.  If your fundraisers have been accurate about when funds are going to come in and they say you will get money late, then spend early on persuasion that is planned rather than spending sloppy at the end. 

If you really want to be like Sun Tzu, then once you have mastered your budget you should attempt to write down what you think your opponent’s budget will be.  In many races, and particularly against incumbents when you know their past spending habits, you can accurately guess how and when they will spend. This information is on their FEC reports.  If you are running against a challenger, then look at who their consultants are – even the good ones lapse into spending patters that you can figure out.  If you know that your opponent is a big purchaser of silly chatchkies then you know that their campaign dollars are not going to go as far and that their fundraising totals really do not reflect how much voter contact they will be doing. 

I still look at old budgets from winning campaigns I have worked on and I truly get transported back in time to those races – you can feel the flow of the campaign just by looking at the budget.  Want to win your race? Create a budget, check it daily, negotiate for the best services and products and spend down to zero!

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