Tips for Managing Campaign Finances
Your political campaign is a short-term, one-goal business. To make it successful, you must be smart about its finances. Part of being an elected official is to watch government spending and control a budget (even if this is not part of your platform). Start by setting an example with your own campaign.
- You may have a treasurer who manages the campaign money for you, though most local-office candidates manage their own funds.
- If you have a treasurer, ensure that you’re closely involved with finances. Insist on being sent reports. Read them. Follow every penny. You don’t want sloppy accounting during the campaign to be used against you.
It’s imperative that you keep your personal funds and campaign funds separate. Campaign spending is only for legitimate campaign expenses. The laws in your state or locality spell out exactly what is allowed and what is prohibited.
Track your campaign finances
Don’t ever be sloppy with campaign money. The campaign is a business, and you must track revenue and expenses just as diligently as any small-business owner. Further, you may be required to report your finances during the campaign. Being accurate and honest is vital.
- If you’re bad with money, appoint someone else to run the finances. Even when you’re good with money, having someone else check the income and expenses means one less thing for you to do.
- No, you don’t want to let anyone know that you’re bad with money. They’ll find out soon enough should the voters make a mistake and put you into office.
Create a spreadsheet to manage campaign finances
Like any business, your political campaign must monitor income and expenses. Items must be input with dates, names, and types of expenses. You need to know your cash on hand. You also need to have a budget that shows upcoming expenses, desired projections for income, and items you want if the funding comes through.
Yeah, it’s a lot of work.
Many candidates keep track of their campaign’s income and expenses in a spreadsheet. They also use the spreadsheet for budgeting. If you’re adept at Excel or Google Sheets, that’s about all you need.
Craft a simple general ledger in the spreadsheet. Track your expenses on one page, receipts on another, budget on a third. If the campaign finance laws require specific details, ensure that you add them as required.
- If you have a money management program you enjoy, you can use it for your campaign. However, if you don’t currently use such software, it makes no sense to learn new software in addition to all the other demands on your time.
- Using professional-level business software such as QuickBooks is a bit much for a local-office run, especially if you lack any paid employees.
- The election law may require that you enter the names and addresses of people who donate money. Further, you may have to track multiple donations to ensure that certain campaign contribution limits aren’t exceeded.
- It’s not necessary to surrender your campaign spreadsheet’s data to your opponents or the press. Only the required campaign finance reporting forms are available for public scrutiny. Even then, not every election falls under campaign finance reporting laws.
Over the course of your campaign, people throw money at you. Not in the manner you think, but if you do your fundraising job, your campaign will receive cash and checks. To best deal with this revenue, as well as to best handle expenses, open a bank account for your campaign.
Many banks and credit unions offer low-cost or free accounts, which is perfect for your campaign. Don’t open a business account, because fees are involved. What you seek is a free account that features checking and a debit card.
Name the account after your campaign. Ensure that this name appears on your checks and debit card. Doing so ads a level of professionalism. Supporters may prefer to write their donation checks to a committee as opposed to you personally.
- Do not co-mingle your campaign funds and private funds.
- Some vendors may take payments only by credit or debit card.
- Avoid getting a campaign credit card. You can manage your electronic payments with a debit card just as easily as with a credit card. The goal is to pay off your debts immediately. With a credit card, you may be tempted to let the payments roll over from month to month, which incurs fees.
- Yes, some donations will have your personal name on the check. This common mistake doesn’t imply that the money is yours to keep.
Money received for your campaign isn’t yours personally. Too many people who run for office seem to think they can do anything they want with campaign donations. Some of these people serve time in prison when they forget the difference.
Not every campaign contribution comes in the form of cash or checks. The in-kind contribution is a combined income and expense. It’s a donation of services or other items that would otherwise cost the campaign money.
As an example, a local bar hosts a campaign event and donates the meeting room and complimentary food and beverages. These items have a cost to your campaign, which the vendor waives. Your campaign credits itself the cost as a donation but also debits itself the same amount as an expense:
|Steve’s Bar, room & host||$580.00|
The election laws in your state or locality offer specifics on how to specify an in-kind donation in your campaign finance reports. In your campaign’s spreadsheet, add the in-kind amount as a donation and subtract it as an expense.
- It’s not always possible to get exact pricing on some in-kind donations. A fundraiser at a private home may have homemade goodies and snacks available. Whether to count them as an in-kind donation is a minor quibble. For large-ticket items, such as the donation of a billboard in town, specifying the in-kind donation/expense is a must.
- In-kind donations are a great way to get funding from supporters who may be reluctant to donate cash directly to your campaign. See the later section “Working through a rejection.”
Before you announce your campaign, set up online payments using one of the available funding sources. For example, you can use PayPal for your campaign.
Work through the setup instructions on the donation website. Specify that you’re running a political campaign; you are not a nonprofit. Supply the campaign information, such as your bank account for transfers.
Have your web designer configure the campaign website with a Donate button. Put the button in an obvious place. Better, put the Donate button all over the site. If someone wants to support you, don’t make finding that Donate button into a game of hide-the-thimble.
- Jot down in your campaign calendar a deadline for setting up online payments.
- For a small election — say, fewer than 200 voters — you can get by without online donations (or a website, for that matter).
- You can use the online payment source to pay vendors, but transfer the donation directly into your campaign bank account.
- If the online payment source collects a fee, you must count only the income received as a donation. For example, if someone donates $50.00 but you receive only $47.50, the latter value is the donation.
- The fee these online payment sources charge is one reason you might want to downplay online donations in your political campaign. If possible, try to collect the money directly as cash or a check.
Some first-time candidates are so excited to be in an election: They have money, and they’re cocky about their chances, so they decide to market themselves early: Eight weeks before election day, they blast out a mailer to all voters in the district. Take that, everyone else!
Well, everyone else is probably laughing. Such a huge marketing push may work when you open a dry-cleaning store, but for an election campaign, the closer you can deliver material to election day, the better.
After blowing all your money early, you have less to spend during the final, critical weeks of the campaign. This time is when the serious candidates are sending out their marketing material. The stuff you sent out weeks earlier? It’s already been recycled — probably into the new campaign fliers sent out by your opponents. Smart move.
Don’t misspend your campaign funds
When you file for office, you see a new type of junk mail appear. It consists of advertisements for campaign swag: hats, pins, bumper stickers, Frisbees, pencils, and all sorts of jolly, festive stuff that only a fool would buy.
If your campaign budget is overflowing with money, which it isn’t, consider buying some swag and sharing it with your supporters. They’ll love it! The effectiveness of such junk getting you into local office is dubious.
Campaign money is precious. Your priority in spending it is to connect with voters — specifically, chronic do-or-die voters. The best way to communicate with them is by direct mail, door-knocking, phoning, and other chores that don’t involve festive buttons or silly hats.
Seriously, no one has ever looked at a campaign hat and said, “Hey! Now I know who to vote for.”
Set your fundraising goal
An experienced campaign manager can spot you a reliable ballpark figure of what your campaign costs — specifically if you do everything right. Doing everything right means generating enough marketing material and mailers to make a lasting impression with the voters. It’s doubtful that any single campaign has ever achieved this goal.
If you don’t have a campaign manager, data is available for you to set funding goals.
The first place you should look are the financial reports from prior elections for the same office. If two years ago the school board trustees spent an average of $4,000 each on their campaigns, that’s your goal — or higher.
Turnout is the key to funding an election. Your marketing campaign must reach all the chronic voters and special interests you plan to target. Multiply the tally of chronic voters by $3 each to set a good funding goal. This rate means if your voter list shows 4,000 regular votes, $12,000 will run you a good campaign. If you want to reach more voters, you spend more money.
Don’t be discouraged! The key is not the amount of money you must raise, but rather how wisely you spend it. Some candidates raise a lot of money, but they fritter it away with bad timing or horribly designed material. Remember that elections are decided by who gets the most votes, not by who spends the most campaign money.
- Stay flexible in your campaign fundraising goal. Prioritize those items that reach the maximum number of voters in the most impactful way.
- Data disclosing spending from an election is a public record. You request this information from the same authority that runs the election for your district. If you’re fortunate, it’s free and available instantly online.
- Ensure that you have a solid voter list for your mailings.
- There’s no definitive answer for how much money you must raise, nor that you must outspend your opponent to win.