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The Democratic Strategist

Political Strategy for a Permanent Democratic Majority

Do We Have a 527 Problem?

In 2004, Democrats relied on 527 organizations to provide a lot of the artillery fire in the race for the White House. The Kerry campaign essentially outsourced its field operation in states like Pennsylvania, Ohio, and Florida to America Coming Together. The Media Fund — run by Harold Ickes — spent $57,694,580 on ads in 17 battleground states, and others like MoveOn.org spent additional tens of millions of dollars on advertising elsewhere. All told, 527s raised and spent more than $500 million in the election cycle, according to the Center for Responsive Politics.
Everyone fully expected that trend to continue this year. In the fall of 2007, operatives announced plans to organize a Fund for America, which would raise money to support independent organizations in 2008. The group told reporters that it planned to pull in more than $100 million from wealthy Democrats and distribute those donations to a slew of organizations targeting Republicans. To date, their efforts have fallen far short, and the Fund is believed to have raised just $3 million during the first quarter of 2008. This week, David Brock told The Politico that he plans to begin raising money for his group — Progressive Media USA — independently, with the hopes of sponsoring a $40 million media blitz against John McCain over the summer.
Dylan Loewe — who used to be the executive director of a 527 called Ballotgroundwonders why 527s are struggling to raise money this year and offers a few possibilities. He asks if the mega-donors feel marginalized or unnecessary in the face of the fundraising juggernauts assembled by the Obama and Clinton campaigns, or whether they worry about the legality of the 527s in the face of the record fine that the FEC used to penalize ACT for its activities in 2004, or if they simply support Hillary Clinton and question whether they want to help Obama get elected.
Each of those things might be true for some, but I’d suggest a different theory altogether.
After spending hundreds of millions of dollars in 2004 only to come up short, the biggest donors in the Democratic party stepped back to reconsider their efforts. At the same time a political operative named Rob Stein began to make the rounds among influential Democratic circles with a PowerPoint presentation detailing the rise of the “Right Wing Message Matrix.” He convinced many of the party’s most important contributors that the tactical bets on winning elections were not contributing to the long-term health of the progressive movement. Instead he asked them to make strategic investments in infrastructure like think tanks and grassroots organizations, and the result was The Democracy Alliance. (Matt Bai outlines this story in detail in his book, The Argument.)
Now we can discuss the health and long-term prospects of The Democracy Alliance all we want. At some point, people with a stake in progressive politics probably should evaluate its success or lack thereof. But to me, it seems that there is a real possibility that donors with the ability to make million dollar contributions are going to have a different set of priorities in the fall (especially without the visceral presence of Bush on the ballot). Which means we might have to consider a different independent organization strategy for future elections.
Anyone think that small donors might be convinced to give to an amorphous organization run by Harold Ickes?

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