A Savvy Political Observer’s Guide to the Modern Campaign Fund-Raising Report

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There’s lots of spin out there concerning fund-raising numbers for GOP presidential candidates. Federal Election Commission filings are quarterly X-rays of campaign bank accounts, which political junkies pore over like treasure maps. And as the July 15 filing deadline looms, campaigns are leaking bits of information, trying to show early strength. You may hear a lot of bragging about organization and ads, but don’t be fooled: It’s often a campaign’s accountant who is the craftiest operator on the team.

Here’s what a savvy politico should look for in the modern FEC report:

Real cash: To get this number you take the reported cash on hand in primary dollars only, and subtract any reported debt. This is the number that really counts. Cash on hand is the muscle of a campaign. It’s key for buying ads and conducting voter contact. Early on, it’s important to look at the ratio between total raised and cash on hand (minus reported debt); that gives you a good idea of the campaign’s overhead costs and “burn rate” — how fast they’re going through the money they raise.

Remember to subtract the reported debt: Candidates sometimes run up some debt to make the cash number look artificially high at first glance. Campaign X might show $400,000 in the bank, and a debt of $220,000. That means campaign X is barely breathing, with only have $180,000 in real cash terms. It looks like Newt Gingrich’s campaign has more debt than cash on hand, which is a big problem.

General election dollars: One neat trick to pump up the overall cash raised number, which is what the media focuses on, is to raise money for the general election. These “general election” dollars pump up your total, but are not legal to use during the primary, making them nearly as useless as monopoly money for most candidates.

The “Magic Drawer”: Campaign managers often hide a few invoices, only to “discover” and pay them the day after the quarter ends. That way they avoid putting some expenditures on the report, either as money spent or as debt. It’s not exactly kosher accounting, but it’s an attractive way to show a little more cash in the campaign account. I’d subtract 4%-8% from the cash totals in these reports to get an accurate number. If the drawer gets too big or too cute, campaigns risk trouble with the Feds. Of course, no campaign ever admits to doing this.

Outside groups: Most campaigns plan to have outside “independent” groups support them in the primary. (Read: beat the tar out of their opponents on TV and in the mail.) Romney has raised millions for his outside group. It’s not yet clear if other candidates will do the same, but I’d bet yes.

Self-funding: Some candidates put in their own moolah. It’s almost always a popular move with the campaign staff and unpopular with the candidate and the spouse. Romney put in tens of millions in the 2008 cycle, but nothing so far this year. Jon Huntsman looks to be in for nearly $2 million, but we’ll have to see the final report to be sure.

Average contribution: Is the candidate’s average donor only 65 bucks, or $2000+? Small donors can give and give, but fundraising costs can be high. A balanced average contribution shows strength in both high- and low- dollar donor fund-raising.

Mike Murphy is a Republican consultant.