To: Messrs. Askew, Cranston, Glenn, Hart, Hollings, and Mondale. Subject: Presidential Prenomination Campaign Fund Raising.
Now that your 1984 prenomination campaigns have begun in earnest, a look back at the fund-raising experiences of your 1980 out-party counterparts may be instructive.
* Plan on raising at least $15 million from private sources. By the time the 1980 Republican prenomination campaign ended, Ronald Reagan had spent $19.8 million; about $13.8 million came from private contributions. George Bush, the only competitor to challenge Mr. Reagan almost until the very end, spent $16.7 million, almost $10.9 million of which came from private contributions. The rate of inflation has abated considerably, and Democrats traditionally raise less than Republicans in presidential prenomination campaigns. But the costs of items and services that campaigns must purchase continue to rise, and the electorate continues to expand.
The $1,000 individual contribution limit will not make your fund raising any easier. Measured by the buying power of the dollar when the limit was enacted eight years ago, a $1,000 contribution today is worth only about $530. It's a good thing you have all started early.
Your party's efforts to shorten the official prenomination season give you another reason to raise money now, a year in advance of the first electoral contests. Under the proposed schedule, only a week will separate the Iowa caucuses and the New Hampshire primary, and only one more week will pass before you are immersed in the torrent of primaries and caucuses that now dominate the selection process. If you make a good showing early, you will have little time to capitalize on your success by raising additional money for subsequent contests. A more concentrated prenomination period will favor candidates with enough money to see them through the early going, when the nominee is likely to be chosen.
* Count on a mix of fund-raising methods to reach your goal: dinners, receptions, some television appeals tacked onto your campaign spots, personal solicitation of affluent donors, utilizing the services of well-connected individuals willing to exploit their networks of contacts, even some direct mail - although none of you is closely identified with the kind of emotional cause or polarizing issue direct-mail appeals generally need to attract big money.
And count on spending a lot to raise your campaign money. In 1979-1980, Ronald Reagan spent $3.5 million to raise $21.4 million (including the $7.3 million he was certified to receive in matching funds); his fund-raising costs represented about 16 percent of what he raised. George Bush spent $3.8 million to raise $16.7 million, almost 23 percent of his net receipts. Howard Baker spent $2.2 million to raise $7.1 million, almost 31 percent of his net receipts. ''You have to spend money to make money'' could have been written about political campaign fund raising.
* Don't count on PACs (political action committees) for much help. They may be the most conspicuous source of campaign money today, but they tend to steer clear of presidential campaigns. In 1980 PAC contributions to presidential candidates came to about $1.6 million, only 1.4 percent of all prenomination campaign receipts. Moreover, more than any other campaign money, PAC money follows a winner. George Bush experienced his greatest influx of PAC money in the period immediately following his upset victory in the Jan. 21 Iowa caucuses; his PAC receipts dwindled as soon as it became clear he would not win the nomination. Ronald Reagan received relatively little PAC money until his decisive victory in the Feb. 26 New Hampshire primary made him the Republican front-runner once again.
* Early money is useful - it may be more so in the 1984 Democratic prenomination scheme than ever before - but it is not decisive. If you have fund-raising success early in your campaign, it probably will lend credibility to your candidacy, and it may close your opponents off from some of your sources of funding. But it won't assure electoral success.
In 1979 John Connally raised $9.2 million, $2 million more than Ronald Reagan and more than twice what George Bush received. Yet in 1980 he won only a single delegate to his cause. John Anderson raised far less than any major candidate during the year before the elections: $506,000. But in 1980 he was the only candidate other than George Bush to pose a serious challenge to Mr. Reagan.
* Finally, as you pursue your goal of winning the nomination and defeating the Republican candidate in the general election, keep this in mind: The prenomination and general election campaigns are not ends in themselves but means to the end of electing an effective government. Our current presidential selection process rewards those adept at the arts of getting elected, including the art of raising money. But, if you are successful, your adeptness at the arts of governing - your skill in forging alliances with other political leaders and in formulating compelling public policies - will measure the true worth of your campaign exertions.