Thursday, April 3, 2014

Full Disclosure of Political Giving

Even though I’m no lawyer (I don’t even play one on TV), I wanted to delve into yesterday’s ruling by the U.S. Supreme Court in McCutcheon v. Federal Election Commission. Personal politics aside (don’t get me started…), I think the decision, at least to my somewhat simplistic understanding of it, might be a net positive for prospect research. I’m not so sure it’s a great thing for democracy, but I’m looking for a silver lining here.  

According to an opinion piece by Stanford law professor Nathaniel Persily in today’s New York Times (sorry if this is behind a pay wall), the Supreme Court’s ruling “struck down as a violation of the First Amendment the aggregate limit of $123,200 that an individual could divide up among candidates and parties.” Persily’s thinking seems to be that if you set aside whether giving that much money is good or not, at the very least it will now be disclosed. He puts it much more elegantly:  “Any court decision tackling [the problem of undisclosed gifts] (even unintentionally) should be welcomed, if it levels the playing field between those who exercise power openly and must face the voters and those who can never be held accountable.”  My take is that people who might give large gifts secretly to Super PACS thanks to the Citizen’s United case might now give large gifts directly to candidates  and be required to disclose those gifts. Because of legal limits, publicly available political giving has always seemed to skew on the low side, making it difficult to estimate the donor’s wealth. The folks at DonorSearch have found that political giving, especially in the $10,000-$15,000 range, correlates well with the capacity to make very large gifts. It will be interesting to see how the disclosure will work and if it will give prospect researchers a more accurate gauge of donor wealth. Please chime in if you have insights to share.

Mitch Roberson, President, APRA MidSouth


  1. My initial thoughts were along the same lines (probably a sign that I've been in prospect research A LONG time). Similarly, the changes might also uncover serious political interests in prospects that was unknown before, due to giving solely to Super PAC's. If Prospect X is very politically active with a certain party's candidates (especially a large number of candidates in one party), this gives us additional information on who s/he is and his/her interests/passions. Also, from a pragmatic standpoint, if Prospect X is assigned to Solicitor Y, who has strong opinions against Prospect X's political persuasions, it may be time to change the assignment.

  2. Given how few political donors ever hit the aggregate limits, I think the effect of McCutcheon might be more limited than people think. I will also note that the ability to give to anonymously creates a powerful incentive not to give to candidates or parties (which require disclosure) and this incentive is not going away.

    Regardless of the impact on political donors, I think the impact on prospect research is likely to be somewhat minimal. In nearly 8 years in the business, I have literally never identified a new prospect from a political donation. I also cannot think of time when a prospect's political giving was more than a "nice to have" piece of data when rating them. There certainly is a place for this information in our work - the research is pretty clear on the subject. But other forms of data will remain more important.

    Regardless, a slight increase in the disclosure of political donations would allow research professionals to know "just a little bit more" about their prospects. The bad news is that the practical utility of knowing "just a little bit more" decreases with every slight improvement in access to data. And the distinction between need to know and nice to know gets lost.

    In reality, the most important indicators of wealth are income, real estate, and company ownership. Of those three, company ownership is the most important since research also shows that most wealthy people in the US are business owners who have a very significant percentage of their wealth tied up in their business (until they sell it of course).

    Ultimately, I remain convinced that honing one's skills on researching and analyzing the "big 3" variables will yield the largest improvements in our collective ability to rate prospects and support the needs of our fundraiser clients.