How Beto O’Rourke Raised a Stunning $38 Million in Just Three Months

Calling Beto O’Rourke’s $38 million dollar fundraising quarter a “record” doesn’t quite do that total justice: O’Rourke, who is challenging Texas Sen. Ted Cruz, raised 30 percent more from July to October of this year than Ohio Sen. Sherrod Brown has raised in all six years of his re-election campaign, and more than Jeb Bush raised for the entirety of his 2016 presidential run.

Within hours of O’Rourke’s campaign announcing his fundraising totals, anonymous Democratic operatives complained to the New York Times about how useful that money could be elsewhere, given recent polls that show him down by 8 points or more to Cruz. O’Rourke’s money, they suggested, would be more valuable to other Democrats in critical Senate races in Arizona, Missouri, Nevada, or Tennessee.

It was a familiar response from establishment figures to an insurgent, progressive Democrat posting huge fundraising numbers: incredulity at how much grassroots donors contributed; skepticism that progressives can win; and a hunger to divert that money to centrist candidates who can’t raise grassroots money themselves.

How’s O’Rourke Raising All That Money?

While raising $38 million in three months is an impressive feat for any candidate, what’s more interesting is how O’Rourke did it: almost entirely online, from hundreds of thousands of people donating small amounts of money, while explicitly turning down money from political action committees. His campaign also actively discourages Super PACs from intervening on his behalf.

This most recent fundraising report saw 44 percent of O’Rourke’s money come from donors giving less than $200 in total, colloquially known as “small-dollar” money. In total, 42 percent of all the money raised by his campaign now comes from small donors. But even that number is a bit misleading because many of the people who gave more than that — and thus, are not counted as small donors — have done so in small increments, their enthusiasm eventually popping through that arbitrary $200 line. His average contribution this quarter was around $47.

O’Rourke’s reliance on grassroots donors further distinguishes his campaign from most congressional races, which by and large rely on a smaller number of donors contributing large amounts of money — even among members of the Congressional Progressive Caucus, most of whom still take corporate PAC contributions. This gives him a big advantage over big money: Very few of his donors have given the legal maximum, meaning that he can — and, according to the new figures, does — go back to those donors again and again asking for more contributions.

Reliance on big donors is a problem that politicians have faced for decades — even for those who want to buck big money. As John Nichols and Robert McChesney recounted in their book “Dollarocracy,” Idaho Sen. Frank Church, a populist campaign finance advocate, wrote in a 1962 New York Times op-ed, “I couldn’t begin to finance my campaign on the offerings of small contributors.”

He was correct, at the time. While Republican operatives like Karl Rove began to find success for party committees in direct mail fundraising in the late 1970s, it was a slow, expensive prospect for candidates to raise money in small amounts up until this century, when digital fundraising allowed small-dollar fundraising to happen at scale.

From the outset of his campaign, O’Rourke made a conscious effort to invest in a digital fundraising operation, knowing that it would be nearly impossible to convince traditional big-money donors to help a Democrat win a Senate race in Texas. In this way, he followed the model of successful small-dollar fundraisers like Howard Dean, Elizabeth Warren, Barack Obama, Bernie Sanders, and Alexandria Ocasio-Cortez.

He hired the digital fundraising firm that ran Sanders’s operation (I was involved in both), and followed the email and advertising staff to their new agency.

O’Rourke has now spent at least $12 million on his digital program, or around 30 percent of all his campaign spending — a huge sum compared to other campaigns, particularly on the Democratic side. The vast majority of that money likely went toward digital advertisements, many of which are designed to grow his email list and get supporters to become donors, but also double as ads that people see (though many of those may be out of state). According to Google’s political advertising transparency report, no other candidate on the ballot this year is spending more money on Google’s platform than O’Rourke. And Facebook’s political advertising tool shows more than 5,300 ad variations run by his campaign.

Ted Cruz and Beto O’Rourke shake hands after a debate at Southern Methodist University in Dallas, Texas, on Sept. 21, 2018.

Photo: Tom Fox-Pool/Getty Images

Empowering Through Authenticity

It might be easy to mistake donor enthusiasm for O’Rourke’s campaign for the Democratic base’s dislike of Ted Cruz. And, to be sure, every donor to O’Rourke knows without him saying so that his opponent is Cruz, a fundraising advantage that isn’t exactly scalable. Asked by The Intercept during a SXSW interview whether it helps to have Cruz as a foil, he said: “It doesn’t hurt.”

But in his campaign’s fundraising appeals, you won’t see attacks on his opponent. The content of virtually every communication is about helping O’Rourke win, not defeating Cruz. In the tweet and video announcing his most recent fundraising totals, he addressed supporters directly: “You just raised a record-breaking $38.1 million.” This is a subtle but significant part of O’Rourke’s approach to fundraising language, in which he speaks with his supporters, not at them. O’Rourke didn’t raise the money, you did.

His rejection, however, of PACs and corporations is highly significant here. By actively shunning big money, he puts the onus of fundraising on his supporters. There won’t be any cavalry of big donors coming to the campaign’s rescue: If O’Rourke is going to win, it will be because of his supporters alone.

Shunning PACs in favor of individuals allows his campaign to practice fundraising jiu jitsu. When Cruz released his first attack ads, O’Rourke’s campaign responded by challenging supporters to raise a matching amount of $1 million to counter the ads — breaking that goal by pulling in $1.2 million over a single weekend.

“Here’s how we fight back: Every time Ted Cruz and the Super PACs behind him launch negative attacks on Beto, we will make them pay by raising more money online and signing up more volunteers than ever before,” the campaign wrote in an email announcing the $1 million goal. “We’re going to keep this campaign positive, and in doing so we’ll send an unmistakable message about the way campaigns should be run.”

It was a familiar tactic for a small-dollar-driven campaign, harkening back to Howard Dean challenging his 2004 presidential campaign’s supporters to match the amount of money Vice President Dick Cheney raised at a luncheon fundraiser for George W. Bush, while Dean sat at a computer eating a sandwich, watching his own money come in online.

Centrist Vultures Circling

Donors give for a variety of reasons, but a reliable way to spark donations is by making an emotional connection and showing why someone’s contribution — of time, energy, or money — will make a difference.

The emotion that O’Rourke banks on is one of hope and movement building. It’s a stark contrast to the desperate, frenetic tactics of Jon Ossoff’s digital fundraising in his failed special election bid last year, despite raising more than $30 million, with nearly two-thirds coming from small-dollar donations. Ossoff followed in the tradition of fundraising emails as debt collection notices, producing a whiplash effect that alternatively shamed and lifted up potential donors multiple times a day.

O’Rourke’s supporter-centric messaging is a distinction lost on establishment Democrats who wonder why donors are flooding Texas with small-dollar cash instead of centrist Senate candidates like Claire McCaskill, Phil Bredesen, and Kyrsten Sinema, all of whom rely on big money for nearly three-quarters of their fundraising.

The act of donating is not generally a calculated one for grassroots supporters. Very few people sit down with their credit card, look at polling averages and turnout models, and then make donations to candidates based on the likely impact their contribution could have at winning the race.

So instead of putting in the work themselves, Democratic groups are hoping to ride O’Rourke’s campaign coattails. House Majority PAC, a Democratic PAC that looks solely to elect Democrats to the House of Representatives, sent a fundraising email last week with O’Rourke’s name plastered all over — with the fine print saying the money would support “candidates like” O’Rourke, with none of the money going to the Texas Senate race.

Brady PAC, a Super PAC linked to the Brady Campaign to Prevent Gun Violence, used O’Rourke to raise money, though the link sends the cash directly to Brady PAC, the kind of organization O’Rourke has discouraged from getting involved.

Oh look, another email from a PAC claiming to be raising money for Beto, but if you look closer, it's really a fundraising pitch for Brady PAC. Presumably they will spend some of that money in Texas, but who knows… pic.twitter.com/spSozyaw4X

— Ryan Grim (@ryangrim) October 15, 2018

Even Michael Avenatti got in on the action, tweeting a link to a fundraising page asking people to support O’Rourke — while diverting half of the funds on that page to his own PAC.

Beto O’Rourke addresses supporters during a campaign rally at Lone Star College – North Harris in Houston, Texas, on Oct. 8, 2018.

Photo: Loren Elliott/Getty Images

Turning Money Into a Movement

O’Rourke’s secret weapon if he hopes to win a Senate seat in November will be a massive, volunteer-led organizing effort powered by volunteers, donors, and supporters.

The critical difference for O’Rourke is that his campaign does not limit a supporter’s input to the act of making a financial contribution. Where Ossoff treated people as ATMs, O’Rourke is converting donors into volunteers to turn out voters.

O’Rourke’s field operation is unlike any ever seen outside a presidential campaign. In an act of radical campaign transparency, O’Rourke’s campaign published its entire organizing plan online, showing every supporter — and everyone on Ted Cruz’s side — the exact plan, goals, and methods for how O’Rourke can win. The campaign’s precinct-by-precinct goals are updated in real time on his campaign’s website.

His campaign only has 10 official field offices across the entire state of Texas, which ordinarily might never be enough to organize the votes he needs to win. Instead, the campaign asked supporters to set up “pop-up” campaign offices, of which there are currently 862 across the state, each staffed by “super volunteers” who can ask the campaign for support as needed. These small, volunteer-run offices in garages, offices, and homes are official intake points for anyone who wants to knock on doors or make phone calls to turn out voters.

The most reliable indicator of the strength of a campaign is not just how much money you raise, but from how many people, and how many volunteers you have knocking on voters’ doors. And it’s very easy for campaigns to turn donors into volunteers, and volunteers into donors.

While polls of likely voters may show O’Rourke down by 8 points or more, his campaign hopes that this massive volunteer operation will turn out enough new, infrequent, or otherwise unpredictable voters to overcome any deficit polling might show.

The bet O’Rourke made is that a populist campaign that explicitly rejects the influence of big money in politics can win, even in a deep-red state like Texas. If it works, it will be because he successfully organized money and people, one dollar and door at a time.