Being wealthy helps a presidential run in almost every way. Candidates can donate infinite amounts of money to their own campaigns, which they can use to hire field staff in key states, pay for expert polling and advice, and even buy TV ads at cheaper rates than their competitors who rely on super PACs.
One thing it does not usually help with: attracting grassroots donors. And that’s a problem when getting on the debate stage requires those grassroots donations.
Vivek Ramaswamy’s presidential campaign says it has enough donors to reach the GOP presidential debate stage in August. Doug Burgum’s campaign does not. Both campaigns this week, however, turned to fundraising methods that are either gimmicky or unorthodox in an effort to lure in more grassroots cash.
The two self-funders ― Burgum is a tech executive who became North Dakota’s governor and Ramaswamy is a 37-year-old biotech entrepreneur ― are promising rewards in return for donations.
Ramaswamy is offering to give donors a cut of his fundraising. Burgum is promising $20 gift cards to the first 50,000 people who contribute at least $1 to his campaign. Both programs underscore the mad scramble among Republicans of seemingly limitless resources to make it to the debate in Milwaukee and on future stages.
“They both feel like pyramid schemes to me,” said Mike Nellis, who runs a digital fundraising and marketing agency catering to Democrats. “If you’re trying to build a campaign that’s going to get enough votes to beat Donald Trump in the primary, you’re not going to do that with this sort of transactionalism.”
Jay Sticka, another digital fundraiser for Democrats, distinguished between the two programs, both launched this week: Ramaswamy’s he called “innovative … it takes what’s happening already with bundlers and brings a grassroots element into it,” while Burgum’s, on its face, is more problematic.
“I think they’re borne out of two relatively desperate campaigns,” Sticka said. “And when you’re desperate, you’re willing to do things that are far outside the norm.”
While Ramaswamy has been quietly and consistently, it seems, building a grassroots following, the same can’t be said yet of North Dakota Gov. Doug Burgum. Burgum, who made a fortune selling his software company to Microsoft in 2001 and is already spending heavily on campaign advertising, entered the presidential race in June with far less time to build a donor base for the debates. Not making the first debate stage would spell a quick end to his presidential dreams — or give him a chance to generate a viral moment propelling him into contention against the likes of former President Donald Trump and Florida Gov. Ron DeSantis.
He won’t know if he doesn’t get there — and to get there, he wants to give you money.
In text messages to supporters throughout the week, Burgum is promising a return-on-investment for a tiny donation. “All you have to do is donate $1, & we’ll send you a $20 gift card to help ease the burden of Bidenflation,” one reads. (Inflation is at its lowest levels in more than two years.) The campaign is also offering to enter donors for a chance to win a trip to the debate, “A NEW AMERICAN FLAG!” or $1,900 toward a Benelli shotgun.
It’s not uncommon to see campaigns giving away swag, one of the more ethically dubious but still legal ways they attract eyeballs and dollars to their candidates. They also prey on less tech savvy donors with emails that read like collections notices or personal notes saying the candidates themselves are trying to reach you.
But experts told HuffPost that essentially offering to reimburse donors is outside the realm of normalcy at best and potentially illegal at worst. Burgum’s campaign did not respond to multiple requests for comment from HuffPost. As of Wednesday afternoon, Burgum was still texting out offers for a $20 gift card, which have seemingly not attracted 50,000 people.
“If you’re trying to build a campaign that’s going to get enough votes to beat Donald Trump in the primary, you’re not going to do that with this sort of transactionalism.”
– Mike Nellis, head of digital fundraising and marketing agency
Larry Nobel, a former member of the Federal Elections Commission, told HuffPost that what both candidates are doing is “novel” and can likely be accomplished within the scope of the law.
Burgum’s plan, however, is “more questionable,” Nobel said, because it raises the specter of illegal “straw donors,” or people who make campaign contributions under someone else’s name. The campaign might fall into that trap if it doesn’t track its contributions correctly or record them as donations at all. “At the very least, they should have to report this in a way that makes the whole scheme clear. Even then, I think it raises potential legal issues.”
Another campaign finance watchdog that didn’t want to go on the record yet, pending further investigation into the two campaigns, said Burgum’s idea “does not appear to violate the law but raises concerns that he is effectively gaming the system by using his personal contributions to his campaign to incentivize people to contribute in order to qualify for debates.”
Rich guys have shown time and time again that money can get you close to the White House, but it won’t actually make you president.
In 2020, former New York Mayor Mike Bloomberg, a billionaire, spent an eye-popping $500 million on a blip of a Democratic presidential campaign only to win the delegates of … America Samoa and no other state or territory. There was also gingham tie-wearing investor Tom Steyer, who similarly spent almost $350 million for the Democratic nomination only to win … nothing. John Delaney, a former Maryland congressman and another wealthy business guy, spent more than $11 million of his own money in that contest. (Delaney similarly resorted to gimmicks to goose his grassroots fundraising, promising to donate $2 to charity for every donation he received.)
Ramaswamy, who’s worth an estimated half a billion dollars, this week launched “Vivek’s Kitchen Cabinet,” which promises supporters a 10% cut of the funds they raise for the campaign using an affiliate link.
Ramaswamy already has 65,000 unique donors, and he didn’t launch this program to get on the debate stage, said Tricia McLaughlin, a senior campaign adviser. The Republican National Committee requires candidates to have at least 40,000 unique donors, including 200 from each of 20 states, as a threshold designed to weed out rich people from essentially buying themselves a spot on stage.
As a first-time candidate, McLaughlin said, Ramaswamy looked at how campaigns fundraise using outside consultants and thought, “Why are people making an ungodly amount of money off of this? He was pretty disgusted thinking about it and thought that if these people are able to do it, then everybody should be able to do it.”
To some, however, the scheme smacks of multilevel marketing (MLM) — a type of predatory business venture that targets mostly women with promises of financial freedom in exchange for hawking leggings and beauty products to their Facebook networks while driving them deep into debt. But unlike an actual MLM, Ramaswamy requires nothing of his grassroots fundraisers upfront besides a background check.
His team strongly refutes the characterization of his program as a pyramid scheme.
“Some people have said this is multilevel marketing. That’s not true. It’s a flat 10% commission,” McLaughlin said.
Over the course of several months, Ramaswamy has gone from last-place long shot to a long shot trailing only Trump, DeSantis and former Vice President Mike Pence in polls of the GOP primary field. Unlike Trump, who was notoriously reluctant to pump his campaign full of his own money until the 2016 general election, Ramaswamy kicked off his bid with a $10 million loan. He hasn’t yet said how much he’s willing to spend on his campaign but is traveling all over the country in a custom coach bus.
The same watchdog that sounded alarm bells about Burgum’s campaign said that Ramaswamy’s seemed to follow the letter of the law: “It’s not uncommon for fundraising consultants to be compensated with a cut of the contributions they bundle for campaigns, and this program appears to fall into the same category.”