Why it’s not just billionaires raising record money for Harris-Trump race

The current election is on track to bust through past records to become easily the most expensive presidential race in the United States’ history.

In part, this continues an ever-rising trend line, after a 2020 race that, at $6.5 billion, more than doubled the 2016 fundraising total. On both sides, there is a sense of near-existential stakes for the nation’s future, engaging donors from billionaires to bake-sale volunteers.

The late-stage arrival of Kamala Harris as the Democratic nominee created its own money boost. Surging enthusiasm helped her campaign reverse the fundraising lead that Donald Trump enjoyed before President Joe Biden exited the race. 

Both teams have stressed the importance of small donors, often considered a grassroots indicator of excitement about a candidate. Yet how much of an impact that money will make is up for debate, and it remains only a fraction of the amount being moved by wealthy donors. 

How did elections draw such record amounts of money? 

To observers in other wealthy democracies, where elections are generally publicly funded, it may look like things have gotten out of hand. In the U.S., it comes down to the First Amendment. 

Over 7 in 10 Americans say there should be limits on how much individuals and organizations can spend on political campaigns. And there are some constraints in federal law, such as a $3,300 cap on what an individual may donate to a candidate’s campaign committee.

But Supreme Court rulings have determined that any limits on overall spending by a campaign or political action committee would be an unconstitutional squeeze on free speech rights. And that wealthy individuals can donate unlimited amounts for outside (noncampaign) efforts to influence and mobilize voters. 

One result of court rulings, such as Citizens United v. Federal Election Commission in 2010, is the rise of super PACs, political action committees that bring in gargantuan sums, mostly from a relative handful of rich donors.

“We have a much less regulated system than most developed democracies,” says Michael S. Kang, a law professor at Northwestern University. While that has ensured a robust arena of political expression, it has also raised concerns about whose voices ring loudest.

How much does campaign finance matter? 

Funding can be especially important early on in a campaign, especially if a candidate lacks name recognition. And campaign spending tends to be more important for challengers than for incumbents, who are less likely to change voters’ minds. But money does not always mean success.

In the past five presidential elections, all winning candidates raised significantly more money than their opponents – except for one. Mr. Trump beat Hillary Clinton in 2016 despite her $230 million fundraising advantage. In the 2020 Democratic primaries, candidate Michael Bloomberg spent over $1 billion of his own cash, to little avail. 

Even House primaries are breaking spending records. Rep. Cori Bush of Missouri lost her congressional primary last month, after a pro-Israel group spent over $8 million in support of her opponent. 

When it comes to the current presidential election, “What’s important is that both candidates have enough money to do what they feel that they need to do,” says Dr. Kang. “Not so much that they have more than the other side.”

What is the money used for? 

It pays for the day-to-day operations of campaigns, from staff salaries and travel to office expenses, yard signs, and T-shirts. It also funds research, outreach, rallies, and advertising in newspapers and on television, radio, and social media.

In the first half of August, the Harris and Trump campaigns and independent groups spent a combined $281 million on television ads. Campaign and super PAC funding has also helped cover over $100 million of Mr. Trump’s legal bills.

What role do small donors play? 

They’ve become increasingly important. Small donors accounted for 23% of the overall fundraising in the 2020 federal elections, up from 15% in 2016. For the campaigns, small gifts can also be synonymous with new names on mailing lists – gold dust for efforts aimed at voter loyalty and turnout.

According to the Harris campaign, 94% of the contributions in July were under $200 each, and two-thirds were from first-time donors. Online fundraising platforms and social media have popularized grassroots giving, says Dr. Kang, while the “Trump phenomenon” has motivated regular voters to donate both for and against Mr. Trump.

Small donations can give a sense of a candidate’s electability, as each gift represents a potential voter, says Sarah Bryner, director of research and strategy at OpenSecrets, a nonprofit that tracks data on campaign finance and lobbying.

Still, super PACs and other outside organizations fueled by large donations have spent over $1 billion on the federal elections as of Aug. 15 – double the pace of the previous presidential election cycle. Dr. Bryner and her team emphasize the value of knowing where all that money comes from. 

“We don’t want to live in a system where policy is given to the highest bidder,” she says. “Transparency can help prevent that from happening.”