The 2020 Money Race: Trump Juggernaut, Big Mo, Grassroots Power

(Bloomberg) -- Pete Buttigieg and Elizabeth Warren surged, Joe Biden got in the game and one-time rising star Beto O’Rourke faltered during the second-quarter 2020 presidential money race.

The campaign finance filings showed that the five top-tier Democratic candidates are pulling away from the rest of the crowded field and revealed how far ahead President Donald Trump is in the hunt for contributions. As some two dozen Democratic candidates compete for donors, Trump has the luxury of focusing on the general election.

Here’s what the second-quarter Federal Election Commission filings released Monday show:

Trump Money Machine v. Democrats’ Millions

None of the candidates came close to matching the $108 million that President Donald Trump and the Republican National Committee said they raised in the second quarter. Through his campaign and the two joint fundraising committees, Trump Victory and Trump Make America Great Again, the president raised $68 million, according to their FEC reports. The RNC reports its numbers on Saturday. Combined, Trump’s committees and the RNC had $123.7 million in the bank at the end of June, they said.

Collectively, the top five Democratic candidates raised $96 million. Overall, the 22 campaigns brought in $131.6 million in the second quarter, topping Trump and the RNC. That figure includes millions given to candidates with little chance of winning the nomination. While it’s an impressive amount of money, most of it will be used to build infrastructure and buy advertising time in early primary states. Because Trump has unified the Republican Party behind him and doesn’t face a serious primary challenger, he can focus on the battleground states where the general election will be decided.

Warren and Buttigieg Show the Big Mo

South Bend, Indiana, Mayor Pete Buttigieg and Massachusetts Senator Elizabeth Warren more than tripled their first quarter hauls, a sign of strength going forward. A candidate can count on loyal supporters to donate in a campaign’s initial quarter. But broadening that base takes effort, and both Buttigieg and Warren have shown they can build momentum. Buttigieg, a relative unknown before running for president, raised the most of any candidate in the second quarter.

Biden made a strong start out of the gate, raising $22 million in his first 66 days as a candidate -- the largest opening quarterly haul for any campaign. That trailed only Buttigieg’s $24.9 million and topped Warren’s $19.2 million. But because Biden didn’t get into the race until April 25, he’s raised the least amount of cash year-to-date among the top candidates.

The leader in that category is Vermont Senator Bernie Sanders with $36.2 million overall. He started with one of the biggest bases -- the vast email list he built during his 2016 run -- but saw a slight drop in receipts in the second quarter to $18 million from $18.2 million.

Senator Kamala Harris of California also saw a dip from the first quarter -- she raised $11.8 million, down from $12 million -- but her two quarters are better than Biden’s single one. And her campaign said it raised $2 million after her appearance at the Democratic debate on June 27, when she challenged Biden over his record on school desegregation as a Delaware senator in the 1970s.

Small Can Be Big

Warren had the most support from small-dollar donors -- those that contributed $200 or less, with $12.8 million, or 67% of the total raised in the second quarter. Sanders was second, followed by Buttigieg, Biden and Harris among campaigns that raised more than $10 million.

Warren and Sanders are relying exclusively on small-dollar donors, shunning closed-door fundraising events and donors who can write the maximum $2,800 checks. The big advantage of grassroots donors is that they can give over and over again throughout the course of a campaign. One downside is that campaigns need to attract a lot of them if they’re to be competitive.

Another drawback is that there is no guarantee a grassroots donor will continue to give. Texas Congressman Beto O’Rourke raised just $1.6 million from small-dollar donors in the second quarter after raising $5.5 million from them in the initial 18 days of his campaign. In between, the emergence of Buttigieg, the resurgence of Warren, and O’Rourke’s own shaky performance on the trail and in debates have dented donor enthusiasm for him.

All the candidates do some grassroots fundraising. Even former Maryland Congressman John Delaney, a multimillionaire who’s loaned his campaign $24 million, is appealing to donors to give as little as a dollar: Among the qualifications for appearing in the second set of debates scheduled for July 30 and 31 in Detroit, candidates must show 65,000 unique donors, with at least 200 in 20 states. That number increases to 130,000 in September.

Those unable to cross those thresholds might face a tough decision: Whether to remain in the race with little hope of the kind of breakout moment a debate can provide or close up shop early. Representative Eric Swalwell of California has already bowed out, becoming, on July 8, the first 2020 Democratic presidential candidate to quit the race.

Who’s Ahead, for Burning Through Cash

Sanders had the highest “burn rate” of any Democratic candidate in the second quarter, spending $13.9 million, or 77% of the $18 million he raised, the filings showed. He was followed by Harris with 62% and Warren with 55%. Candidates are building infrastructure in states with early primary contests, adding more personnel and spending on digital advertising to get their messages and their fundraising pitches out.

The spending is critical: campaigns need to identify potential supporters and donors, appeal to them with everything from detailed policy positions to slogans that can fit on a bumper sticker, and create ground operations. Campaigns will continue to add staff and open state and local field offices throughout the year. By spending bigger earlier, a candidate can lock up talented staff, build a more cohesive organization and get a leg up on the competition.

The Trump campaign’s burn rate was 40%.

Save Now to Spend Later

Cash-on-hand figures are an early indication of how campaigns are managing the balancing act of building organizations in early voting states while stockpiling enough money to compete when it’s time for voters to go to the polls.

Sanders has put aside $27.3 million as of June 30, the most cash on hand of any candidate, built up in part by the $10.1 million he transferred from his Senate campaign. Buttigieg was second with $22.7 million, followed by Warren and Harris, who like Sanders transferred leftover money from their Senate campaigns. Biden’s $10.9 million in the bank puts him in fifth place.

Trump’s campaign enjoys a massive cash advantage: it said the candidate’s committees and the RNC will report a combined $123.7 million in the bank on Saturday when the GOP files its report with the FEC.

As important as it is for candidates to spend money now, it’s also essential that they save some for contingencies. Without a big bank balance, campaigns that hit rough patches can quickly go under. A poor result in an early primary or a barrage of negative coverage can put a dent in fundraising. Campaigns with a cash cushion can ride out the storm, while those without one sometimes have to fire staff and cancel ad buys, producing more bad headlines.

Texas Star Seems to Be Fading

O’Rourke appeared to be a rising star in the race earlier this year, gracing the cover of Vanity Fair in March and pulling in $6.1 million in donations in a single day.

But his fundraising plummeted to $3.6 million during the entire second quarter, and his poll numbers sagged.

His campaign issued a press release Monday night showing that O’Rourke also had slow initial fund-raising quarters during his 2018 U.S. Senate race and insisted he can recover, noting he has met the 130,000 unique donor requirement for the September debates set by the Democratic National Committee.

“I won’t sugarcoat it: we have work to do, but we have the resources we need to execute our strategy,” Campaign Manager Jen O’Malley Dillon said in the release.

Unlike the top 2020 Democratic presidential contenders, O’Rourke waited until Monday’s filing deadline to disclose his figures -- fueling speculation that the numbers wouldn’t be good for a top-tier contender. They weren’t.

--With assistance from Paula Dwyer.

To contact the reporters on this story: Bill Allison in Washington DC at ballison14@bloomberg.net;Mark Niquette in Columbus at mniquette@bloomberg.net

To contact the editors responsible for this story: Sara Forden at sforden@bloomberg.net, John Harney

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