Trump's Small-Dollar Donors Help Salve His Big Business Bruises

(Bloomberg) -- Jim Gilly has a recurring charge on his credit card: $100 a month for President Donald Trump’s 2020 re-election committee.

The 70-year-old small business owner from northeast Florida says he plans to keep making those monthly donations for the next four -- or eight -- years, even after a succession of corporate executives moved away from Trump in dramatic fashion after the president’s remarks last week appeared to confer legitimacy on white supremacists.

Donors like Gilly and those who given in even smaller increments -- often $5 or $10 at a time -- offer the president a kind of security blanket as he balances historically low approval ratings with small-donor fundraising that’s setting a record-breaking pace.

“The people who pulled out of the business council were mistaken to do so, and I think the Charlottesville story was a planned event that has been reported on in a very one-sided and inaccurate way, intended to discredit him,” said Gilly, whose company installs and services communications towers. “The forces lined up against him are substantial.”

Small-dollar donors -- those who give a total of less than $200 per year -- have provided 59 percent of the $26 million that Trump’s re-election campaign has raised so far in 2017. A good share of that total came via supporters’ purchases of Trump-themed merchandise. By comparison, former President Barack Obama raised 36 percent of the funds for his 2012 re-election effort in amounts of $200 or less.

Small donors have also fueled the Republican National Committee’s record haul, representing 60 percent of the $54.3 million given directly to the party to influence federal elections so far this year. That’s an increase from the first six months of 2015, when the GOP raised 48 percent of its $45.1 million kitty from small donors. (The Democratic National Committee raised 48 percent of its $33 million total from them over the same period.)

Controversies Help

The controversies that have engulfed Trump’s presidency since Election Day may help his fundraising among small donors, said Michael Beckel, research director at Issue One, which advocates for reducing the role of money in politics.

“Your most loyal supporters want to feel like they have skin in the game when they are needed,” Beckel said, noting that many of Trump’s most committed backers were drawn to him because he challenges political norms. Big, corporate donors and their lobbyists “are less willing to award controversial and unconventional behavior,” he added.

“If you’re a small dollar donor, an ideological donor, you want to show that you’ve got their back,” Beckel said.

“They don’t expect to be getting a favor,” said Michael Malbin, executive director of the Campaign Finance Institute, which studies political giving. “These are enthusiasts.”

Active First Year

That doesn’t mean Trump’s ignoring mega-donors. The New York Times reported the president dined last week at his golf course in New Jersey with New York hedge fund manager Robert Mercer, Kentucky coal mogul Joseph Craft, and Wisconsin billionaire roofing supply executive Diane Hendricks. Each of them has given more than $1 million to various committees supporting Trump’s political aims.

Most administrations put the brakes on fundraising and shift to governing during their first year in office. Since at least 2001, no presidential re-election campaign has ever raised money the year after an election. But Trump has never stopped tapping his small donors. Solicitations on his campaign website and through text messages have appeared on a steady basis since the election -- including a “Black Friday” sale on Trump merchandise in November.

Trump could use the resulting war chest in many different ways, including spending for a re-election bid in 2020, transfers to the RNC for favored candidates in the 2018 midterm elections, or contributions to boost a nonprofit that could promote his policy agenda.

“The unparalleled network of Republican support continues to be the key to our success,” Ronna Romney McDaniel, RNC chairwoman, said in a statement. “Our efforts to help President Trump and maintain our Republican majorities would not be possible without the generous support of Americans across the country.”

Rallies and Sales

Since taking office, Trump has held campaign-style rallies in Florida, Tennessee, Kentucky, Pennsylvania, Iowa, Ohio and West Virginia that double as fundraising events because they boost merchandising sales. Another is scheduled for Arizona this week.

Representatives from Ace Specialties Inc., a Louisiana business that fulfills all online orders for official Trump goods, are often stationed at the rallies, hawking Trump-branded items such as the iconic red “Make American Great Again” caps.

Company owner Christl Mahfouz said in June that her employees have shipped an estimated 1 million hats, 2.3 million yard signs, 2.3 million bumper stickers, 1.3 million rally signs, 500,000 T-shirts, and 500,000 buttons. A miniature “MAGA” Christmas tree ornament sold 17,500 units.

Some of the items now featured most prominently on the campaign store’s website include $25 “#BuildTheWall” T-shirts and $30 coffee mugs with messages that express joy in “waking up and remembering that Donald Trump is president.” Months after the election, the Trump online store still receives about 125,000 unique visitors per week.

Valuable Data

Each red cap, which Mahfouz said remains the top selling item, retails for $25. Mahfouz declined to discuss the manufacturing cost, but a competing apparel buyer estimated it at about $6. After shipping and handling costs, the difference goes to the campaign.

But Trump’s committee gets something else as well: a database of those who ordered. Campaigns covet data on small-dollar donors because they can be tapped multiple times during an election season. The hats, manufactured by a California company that previously supplied them to Trump’s golf courses, also provide a tangible connection between the president and his supporters.

Jay Gazzier, a financial adviser in Houston who sends $100 a month to the president’s re-election campaign, said he wishes Trump would focus exclusively on the “big agenda items” and “not sweat some of the smaller stuff that’s out there.”

He blamed what he called an unprepared Congress more than Trump for the lack of any major legislative accomplishments so far this year, and he said he’s trying to help the president prepare for what he expects will be a challenging re-election bid.

“He’ll either end up being one of the greatest presidents ever, or he will go down in flames,” said Gazzier. “As of right now, I think he will be one of the greatest presidents ever.”

To contact the reporters on this story: John McCormick in Chicago at jmccormick16@bloomberg.net, Bill Allison in Washington at ballison14@bloomberg.net.

To contact the editors responsible for this story: John Voskuhl at jvoskuhl@bloomberg.net, Ros Krasny