The CFI analysis of the Obama campaign finances, entitled "Reality Check," is interesting but it is also peculiar and, more than anything else, demonstrates that a headline should be compared with care to the body of the story.  The headline means to announce a new "reality," one that downplays the role of small donors in the Obama campaign's fundraising performance.  Then comes an analysis that requires a "reality check" of its own.

     The CFI study concedes that the Obama fundraising performance was "impressive."  It gives numbers to back up this conclusion:  that Obama, declining to take PAC funds, raised more money from hundreds of thousands of donors more than any other candidate; that an unprecedented number of these donors gave repeatedly in small amounts; that both one-time and repeat donors, giving in the aggregate less than $1,000, made up well over half (53%) of his contributor base; and that 2.5 million donors giving no more than $200 chipped into this campaign, more in this category than for all 2004 candidates combined.

For all that, however, CFI is not willing to grant that small donors fueled the campaign’s extraordinary success in amassing in the neighborhood of $650 million.  Here is the point—the significance of small donors—at which CFI avers that myth and reality do not match.

     The reality CFI describes is highly dependent on the lens it has selected for viewing it.  The first and oddest of its moves is definitional:  its criteria for identifying the "small donor."  The small donor for CFI is the undisclosed donor, giving no more than $200 in the aggregate.  Every additional penny donated causes the small donor to grow, and CFI slices these categories ever more finely, establishing a mid-range group with subgroups set at the $201 to $400 and $401 to $999 levels.  It terms these repeat small donors "mid-range repeaters." 

     It becomes quickly apparent that confusion has set in—something has gone wrong—in this analysis.  In CFI's view, a large donor is one contributing $1,000 or more, and yet a small donor is not one giving less—say, $350.  Someone giving less than a large donor is still not small in CFI's world.  And someone giving two small donations—$100 and $300—loses small donor status and becomes something else—in CFI’s nomenclature, a "mid-range repeater."  This clash of definitions is enough to explode CFI’s entire thesis.

     These definitional contortions are not saved by a larger point.  For CFI readily admits that these "repeaters…have not been part of the traditional large-dollar reception-attending fundraising crowd."  So the small donor who gives twice in small amounts, as in the case of our imagined donor of $100 and $300, is not small only by virtue of the amounts given.  She is also "small" when considered in context, giving through the Internet and not as a member of the "traditional large-dollar reception-attending fundraising crowd."  By the numbers, or in qualitative terms, she is obviously someone to be considered a "small donor"—except by CFI.

     There is further complication in an analysis that spins too hard its iconoclastic conclusion, this business of salvaging "reality" from the fog of "myth."  The reason for all the interest in how Obama accomplished his fundraising feat is the scale of the feat itself.  CFI notes that Obama took no public funds, but it buries this in a recitation of background facts when it should be front and center in this analysis.  Consider this, from CFI:

Because of the length of Obama's battle with Clinton for the nomination, his rejection of public financing for the general election, his personal charisma and, most importantly, because of the way he organized his campaign, Obama was able to use the Internet to go back to go the same supporters over and over again for both volunteer assistance and repeat contributions.

     Yes indeed:  this is the point, is it not, that he was able to decline public funding and reliably turn via the Internet to committed donors to contribute time and again in small amounts to make up the difference and far, far more?  These donors gave what they could—in small increments—and surely this variant of an installment plan, in many cases a function of what a donor could actually afford on each occasion she was invited to give, does not justify exiling them from the community of "small donors."  CFI does not appreciate, it would seem, the difference between the donor who can give $500 at all once, and the one who ekes out this sum over time, as she can.

     CFI's blurred vision on this and other points causes it to present an answer without considering whether it responds to the right question.  That question always was:  if Obama did not accept public funds, would he be able to attract funding on such a scale, with such competitive impact, that the choice would prove provident?  Obama’s decision was fully vindicated, and his funding a genuine competitive advantage, precisely because a) he reached more individual donors (taking no PAC money) than any candidate before him; b) approximately 2.7 million donors either gave no more than $200 or gave more, repetitively, in small amounts; and c) the money raised from the one-time or "repeater" small donor communities was indispensable to his overall success.

     Even if one curiously believes that every donation above $200 is a large donation, or that someone giving repeatedly in small amounts totaling more than $200 in the aggregate is a large donor, the fact remains that Obama could not have raised the funds he did without this unprecedented pool of voters donating in the aggregate less than $1,000 (the maximum allowable donation per election is $2300).  And in the category of contributions of $1,000 or more—the category of donors that CFI describes as "large"—Obama’s total by CFI’s calculation was merely 33% of the whole, to be compared to McCain’s 53% or Kerry’s 44% or Bush’s 57%. 

     So small donors, contra CFI, were the "financial engine of the Obama campaign," for the reason, not denied by this study, that without them, the record-breaking performance would not have been possible.  What then is CFI looking here to do?

     CFI does fine work, and while its numbers will be checked by others, there is no reason not to give the data the benefit of the doubt.  Yet the Institute is also committed to a reform program, one major plank of which is reformed public financing.  It perhaps moves CFI here to throw cold water on the notion that candidate Obama constructed what he once termed a "parallel" public financing system, reliant entirely on private funding raised through the Internet.  CFI may worry that the reform program will falter on too strong a showing that such a small donor, Internet-driven candidacy can succeed on private funding alone.

     If this is the worry, it is quite unnecessary.  No one argues that the Obama campaign establishes the norm for privately funded campaigns.  There is still a case to be made—and it is a strong one—for reforming the public financing system so that it is, as the aspiration is commonly described, "viable."  Re-working small donor definitions and complicating the math is not a condition of successful reform.   

Bob Bauer