Small Donors' Clout in Doubt

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Big Bucks from "Bundlers"

The large donation figures don't include contributions on behalf of political action committees (PAC), which represent corporations, trade associations, and other groups. But with many of the candidates refusing to accept it this season, PAC money has become less important. About 1% of the money raised in the third quarter by Clinton, Giuliani, and McCain came from PACs, according to the Center for Responsive Politics. Romney, Obama, and Edwards do not have PAC contributions, according to the CRP.

In lieu of relying heavily on PAC funds, the candidates rely on large donors known as "bundlers" (BusinessWeek, 2/12/07) who are capable of mobilizing wealthy friends and acquaintances.

Obama, for example, is supported by entertainment mogul David Geffen, who according to press reports raised more than $1 million from entertainers, producers, and studio executives who attended a dinner at his home. Clinton has her "Hillraisers," a title given to people who raise at least $100,000 for her campaign. Among them are movie director Steven Spielberg, Governor Jon Corzine (D-N.J.), and Cablevision (CVC) CEO James Dolan, according to Clinton's Web site. Giuliani has coalitions headed by big donors including Lawyers for Rudy. "A lot of the campaigns have done a terrific job of putting together finance committees that have done a great job raising money from their buddies," says Stuart Rothenberg, a political analyst and editor of The Rothenberg Political Report, a nonpartisan newsletter that handicaps elections. "Sure, there is this growing pool of small-dollar folks, but there seems to be a large number of large donor pools.…There has been exaggerated attention to the little guy as opposed to the big-dollar guys."

And the same tools that help the Average Jane make a donation also make giving easy for larger donors. All the major candidates have pages on social networks (BusinessWeek.com, 12/13/07) where supporters can follow links to donation pages and encourage others to give. Candidates such as Paul have donation widgets that users can embed on their personal profile pages within social networks. Obama, like other candidates, has a page on his Web site (BusinessWeek.com, 6/18/07) linking to thousands of niche social networks supporting his Presidential run. Each group has a meter on its page showing how much money it has raised. Clinton's Hillraisers are given a code that is embedded in electronic solicitations to ensure donations are matched to the corresponding fundraisers. "The campaigns are embracing the idea that there are influencers out there, and if you can identify the people that are important nodes in their social network and convert them, you have the possibility of appealing to their network," says Lee Rainie, director of the Pew Internet & American Life Project.

Small donors like Cadenhead are undeterred in making political contributions, no matter how small. Individual donations are keeping some candidates like Kucinich from dropping out of the race altogether. For many candidates, even a small donation is an indication of support at the polls, where it matters most. "It's an easy way to vote early," says Cadenhead.

Holahan is a writer for BusinessWeek.com in New York .