IE 11 is not supported. For an optimal experience visit our site on another browser.

Fund-raising success puts Obama in tough spot

A cluster of cramped cubicles, tucked away in a rear corner of Senator Barack Obama’s campaign headquarters here, serves as the heart of a fund-raising machine that has reshaped the calculus of the 2008 election.
/ Source: The New York Times

A cluster of cramped cubicles, tucked away in a rear corner of Senator Barack Obama’s campaign headquarters here, serves as the heart of a fund-raising machine that has reshaped the calculus of the 2008 election.

Mr. Obama’s finance director, Julianna Smoot, who has helped him raise more than $150 million so far, does not even have her own office. A Ping-Pong table is the gathering spot for Friday lunches for her team.

The setting, which has the feel of an Internet start-up, is emblematic of how Mr. Obama, of Illinois, has been able to raise so much money. On Wednesday, the Obama campaign will report to the Federal Election Commission that it collected $36 million in January — $4 million more than campaign officials had previously estimated — an unprecedented feat for a single month in American politics that was powered overwhelmingly by small online donations. That dwarfed the $13.5 million in January that Senator Hillary Rodham Clinton of New York is expected to report Wednesday and the $12 million Senator John McCain’s campaign said he brought in for the month.

Mr. Obama’s startling success, however, has also now put him on the spot, tempting him to back away from indications he gave last year that he would agree to accept public financing in the general election if the Republican nominee did the same. The hesitation has given Mr. McCain, the presumptive Republican nominee whose advisers concede he would most likely fall far short of Mr. Obama’s fund-raising for the general election, fodder for a series of attacks.

“This type of backpedaling and waffling isn’t what inspired millions of people to invest in Senator Obama’s candidacy,” said Jill Hazelbaker, a spokeswoman for Mr. McCain.

Under rules of public financing, a candidate has access to $85 million from a taxpayer-financed fund for the general election, a substantial amount to spend for the roughly two months after this year’s conventions. But this election cycle has shattered fund-raising and spending records and upended expectations.

The details of Mr. Obama’s January fund-raising illustrate just how much his campaign has been able to chart a new path for the presidential race. He brought in $28 million online, with 90 percent of those transactions coming from people who donated $100 or less, and 40 percent from donors who gave $25 or less, suggesting that these contributors could be tapped for more. (Donors are limited to giving $2,300 per candidate during the primary season.) More than 200,000 of the campaign’s nearly 300,000 donors in January were first-time givers to Mr. Obama.

The campaign’s success over the Internet has freed Mr. Obama from having to take valuable time off the trail for fund-raising events for major donors — just $4 million in January came from traditional fund-raisers.

“We know we don’t have to get him in front of as many major donors now,” Ms. Smoot said.

Mr. Obama has done just a few traditional fund-raising events in January and none in February, in contrast to the Clinton campaign, which has been keeping up a steady diet of fund-raisers with either Mrs. Clinton or her husband, former President Bill Clinton.

Mrs. Clinton’s operation has also been pushing to improve its efforts online, with her campaign saying Tuesday that it brought in $15 million over the Internet in February, with donations jumping after news broke that she had lent $5 million to her campaign.

Mr. Obama’s January surge surprised even members of his finance team. When Meaghan Burdick, who works on Mr. Obama’s online fund-raising efforts with Joe Rospars, the campaign’s director of new media, drew up a set of projections in December, she came up with three possibilities for January in the event Mr. Obama won Iowa, finished second or finished third, with a victory expected to draw $10 million to $15 million over the Internet.

At the center of the Obama campaign’s online effort is an e-mail list, which now numbers in the millions but started out with fewer than 50,000, culled mostly from Mr. Obama’s Senate run.

That list grew as Mr. Obama’s many rallies drew thousands of people, where attendees gave their e-mail addresses to the campaign, as well as other initiatives to draw more people into the campaign’s orbit.

But tapping small-money donors can be a balancing act. Campaign officials say they believe they have gotten better at calibrating efforts at making sales pitches for cash while also trying to encourage people to participate in other ways. As a result, a recent e-mail message asked supporters to write letters to superdelegates making their case for Mr. Obama.

The campaign’s online donors have also come to form the backbone of its vaunted grass-roots operation across the country, with information about new donors quickly transmitted to organizers on the ground to enlist for phone banks and other volunteer efforts.

“We want to make sure that the experience people have with us is not solely around money,” said David Plouffe, Mr. Obama’s campaign manager.

After Mr. Obama’s victory in Iowa, the campaign collected $2.8 million online. But it was the two days after Mr. Obama’s stunning loss to Mrs. Clinton in New Hampshire that campaign officials point to as when they began to realize they were in for an extraordinary month.

On the evening of the primary, Mr. Obama’s finance staff settled in to watch the results from their cubicles. When the television networks called the race for Mrs. Clinton, their spirits sagged. But Ms. Burdick was staring at her laptop, watching a graph showing how much money was coming into the Obama campaign over the Internet. Within minutes, it was shooting upward.

“This is crazy,” Ms. Burdick said, calling over to two of her colleagues sitting near her.

Within three hours, the campaign had cleared $500,000. In the morning, when Ms. Burdick checked again, the campaign had raised $750,000. Over the course of two days, Mr. Obama collected $4.4 million online.

The campaign sent out an e-mail message from Mr. Obama to donors the morning after the New Hampshire defeat.

“I know you just made a donation, but we are about to enter the most decisive period of the campaign,” he said, signing his name at the end, “Thank you, Barack.”

In Birmingham, Ala., Matthew Lane, 38, logged into his e-mail and received that message. Although he earns less than $20,000 a year as a storyteller in public libraries and as a freelance writer, he decided to give $25 on top of a few small contributions he had made dating to March 2007.

“The campaign has been so incredibly grass-roots, it does sort of feel like you are making a difference,” Mr. Lane said, “even in giving in small increments like that.”

And this month, after the Feb. 5 primaries, Mr. Lane decided to tack on another $25 donation.