The release of Q1 2019 fundraising reports offers one of the first insights into the 2020 cycle. The conversation surrounding these reports is largely focused on specific, vulnerable candidates: are they fundraising well enough to defend endangered seats, or have they let their guard down? But the Q1 numbers also contain a considerable amount of information about the possible macro trends of the 2020 cycle. Perhaps most notably, the disclosures from Q1 2019 show that the aggregated Cash on Hand (CoH) totals for presidential candidates are astronomically higher than in the 2012 and 2016 cycles. CoH is a strong metric for predicting overall political paid media spending and we think superior to dollars raised since it demonstrates ability to implement strategy.
Presidential candidates have disclosed a combined $136M CoH for Q1 2019. This is an incredible $123M more than the $13M presidential candidates had on hand in Q1 2015. By this point in 2015, only Rubio, Cruz, and Carson had raised more than $1M; their combined numbers accounted for $10M of the $13M total in the presidential race. In 2019, there are 15 candidates who already have more than $1M in CoH. 2019 does have the mitigating factor of an incumbent president with $40M in the bank, however, even excluding his totals, 2019 is outpacing 2015 by $83M.
2015 saw huge amounts of growth from Q1 to Q2 once Clinton, Bernie, and Jeb all declared; they raised $29M, $12M, and $8M respectively in Q2. As most of the 2020 candidates have already declared, it’s doubtful we will see 600% growth in CoH that occurred during Q2 of 2015. But a near doubling of Q1 2019 CoH figures would not be surprising, especially with the likelihood that Biden will declare and post a huge quarter as a show of strength. We are now in uncharted territory for presidential fundraising. The 2011-2012 cycle saw a similar spending pattern to 2015-2016 with only $17M raised in Q1 2011 and a huge jump of CoH during Q2.
One trend worth watching is the gap between the incumbent’s CoH and the cumulative fundraising numbers posted by challengers. As the incumbent, Obama finished 2011 with $82M CoH, dwarfing the combined year-end total of $41M CoH that his GOP challengers raised. So far in Q1 2019, Trump has $41M CoH compared to the combined $93M his Democratic challengers have in the bank. Does this signal a potential vulnerability for the President in 2020? Is it possible these fundraising numbers could be a gauge for the level of engagement of each party’s base? It can be hard to measure engagement, especially this far out from Election Day, but the massive sums Democratic candidates have raised so far may indicate that the base is particularly interested in this election. This would be in keeping with 2018 trends that saw Democratic Congressional candidates vastly outraise their GOP counterparts, even when they were relatively green candidates challenging an incumbent.
So we arrive at the question everyone is asking: is this the new normal in politics? Can we expect old spending records to be blown out of the water with every new cycle? It seems as though this trend will continue for at least the short term. Democrats are extremely motivated to remove President Trump from office, and the President now seems to have the full support of the Republican Party. Elections feel like a higher-stakes game than they have in the past, and each party has worked hard to impart a sense of urgency upon their bases that translates into huge fundraising.
It is also worth noting that election expenditures are arguably less than one would expect given the power possessed by the party in the majority or in the Oval Office. Americans spend approximately $9B on Halloween candy and costumes every year, more than twice as much as the money spent on the 2018 election cycle. This indicates that the American population possesses a considerable amount of discretionary income that isn’t currently directed toward political activity. But if politics continue to consume a larger portion of public discourse, nearing the engagement of a spectator sport, every day citizens may be inclined to put more money on the line.
We are in unfamiliar territory for presidential CoH with fundraising for Q1 of an off year far outpacing both the 2012 and 2016 cycles. In fact, Q1 Presidential CoH for 2019 is higher than any quarter in either 2011 or 2015. This anomaly makes it difficult to model pacing projections, but the numbers indicate that 2020 Presidential spending levels will be far higher than any before. The factors to monitor over the course of the next two quarters will be the rate at which the pool of candidate cash grows and how the balance between Democratic and Republican fundraising changes.