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Illustration by Scott Stantis

Meredith Shiner

In 2012, the last presidential election cycle, more than $6 billion was funneled into federal races — for the White House and Congress — by candidates, parties and outside groups bent on influencing policy outcomes in Washington.

So says data from the Federal Election Committee (FEC) compiled by the Center for Responsive Politics. And totals for 2016 could be much greater. The campaign of Democratic frontrunner Hillary Clinton, for example, told multiple media outlets it would need to raise $2 billion to have any chance at electing the former first lady and secretary of state as president. One-time Republican Party favorite Jeb Bush and his allied groups raised more than $155 million only to compete in three states’ primaries, according to FEC data.

The size and scope of fundraising, along with the panoply of groups and campaigns that spend the money, asks a pressing question. To what extent do donors, staff and candidates expect campaigns to operate like the businesses they are? That is, with metrics to prove that donors — political investors — are getting a return on their dollars; with systems that ensure economic efficiency demanded of other multibillion-dollar entities, like Fortune 500 companies; and with greater transparency about where the money comes from and where it goes.

For Bentley alumni involved in politics and professors who teach about the topic, the comparison between campaigns and companies, especially startups, is clear. So is the need to evolve in terms of industry best practices.

“Election campaigns are a series of startup firms … startups that need a lot of labor to run effectively,” says Jeff Gulati, an associate professor of global studies who researches Congress, campaigns and elections. “That may mean outsourcing things like vendors and pollsters, or investing in analytics, campaign finance operations and people who understand the new digital landscape.”
 

Explosion of Big Money

The meteoric rise of big money in politics traces back to 2010 and a landmark U.S. Supreme Court case. In Citizens United v. Federal Election Commission, the court ruled that political giving is a form of free speech protected by the First Amendment. The decision effectively lifted many limits on political giving by corporations, imposed through the McCain-Feingold Bipartisan Campaign Reform Act of 2002.

In the years that followed, outside groups — political organizations not directly affiliated with candidates or parties — proliferated both in number and amount of money contributed. Funds flooded the political landscape, which voters saw in the form of television and radio advertising, mailers and even an increased number of candidates running in party primaries for the Senate, House of Representatives and White House.

Another Supreme Court ruling, two months after Citizens United, cemented the way for organizations known as super PACs: independent, expenditure-only political action committees that can raise unlimited funds from corporations or individuals, as long as they do not directly coordinate with candidates’ official campaigns. With one wealthy person or family now able to contribute millions to a single campaign — sometimes without even disclosing their identity — a growing number of politicians have the resources to run without needing to raise money from small donors.

The result has been a free-market boom for politics, with more candidates able to pay for more consultants, political professionals, pollsters and staff.
 

ROI with a Difference

Nate Turnbull, MBA ’00 sees a clear difference in how money operates in politics now. Before joining CONNECT—San Diego as vice president of public policy, the Democrat was a finance assistant on John Kerry’s 2004 presidential campaign and a finance director for the northeast during President Barack Obama’s first campaign, in 2008.

“My time in fundraising was before Citizens United. We operated much more on hard-money mechanics in ’04, ’06 and ’08,” he says, referring to money that candidates received in disclosed and limited amounts via official campaigns or party organizations. “What’s interesting from a theoretical point of view is the attention put on the fundraising horse race — on how much money is spent, versus where it comes from or how effectively it’s allocated.”

Turnbull hits on a dynamic that Gulati underscores as a key caveat in the politics- as-business model: Even though there’s more money in the system than ever before, accountability from those running the organizations and demand for a return on investment by donors have  not grown proportionately.

“A CEO is not going to be happy with poor results [from his or her company]. But politics is different for these multimillionaires who are giving,” says Gulati. “It’s like a hobby … they’re not looking all the time at return on investment.”

He compares the situation to owning a sports team. “Before a certain point, they don’t make a lot of money in ownership, it just brings a sense of prestige. So in a sense, [political donations] are vanity projects and [donors] want to be part of the game.”
 

Lessons from the C-Suite

There are some firms seeking to change the game regarding how campaigns are set up, managed, operated and accounted for — tasks that used to fall to in-house political staffers with little to no business background.

Bruce Nilson ’08 is a vice president at one: Red Curve Solutions offers financial and operational support to GOP campaigns at the House, Senate and presidential levels. That includes managing treasury and accounting, FEC compliance, donor tracking, operations from payroll to expense oversight, and even the wind-down process when a campaign ends (win or lose).

“We’re taking best practices of Fortune 500 companies and implementing them in short shelf-life campaigns,” says Nilson, a Republican who worked on Mitt Romney’s presidential campaigns in 2008 and 2012. “Because the cost of getting the books wrong could be the end of your campaign or send you to jail.

“Everybody is making money in politics, but no one is running campaigns like a business: the systems, the tools, the terminology,” he continues. “I’m passionate about this because I think that government and politics should be run like a business and people should not get rich [working on campaigns]. Where else do you have a startup that goes from $0 to $50 million overnight, hires hundreds of employees and then shuts down after a year?”

For his part, Turnbull worries that, absent campaign finance limits and other controls, the level of accountability to donors will not be brought into check for some time. 

Like the housing and tech booms of years past, the politics boom has winners and losers. Some of those profiting most are political consultants, who can bill clients for a litany of services that have become much easier post-Citizens United. Reports such as one from the nonprofit Center for Public Integrity suggest that, lacking rules or regulations, many of the country’s 5,000 registered outside political groups spend more on operations and salaries than on candidates or causes.

“That is a bigger conversation: Why do [donors] actually give money when much of it goes to overhead? The finance consultant takes 10 percent off the top, which is lunacy,” says Turnbull, the former finance staffer. He allows that when the percentage came off checks of $2,000, the one-time federal maximum in hard donations per individual per cycle, “you probably earned it. That’s completely different from there being a million-dollar donor and you’re taking $100,000 for two hours’ work. The real pot of gold is [working for] super PACs, where the level of governance or oversight that the donors put in is so minimal.”
 

The Analytics Revolution

Like the modern company, the modern political campaign is embracing analytics to make decisions and measure results. In 2012, the Obama campaign added staffers with roles more common to Silicon Valley than Pennsylvania Avenue: chief scientist, director of modeling, director of digital analytics.

The chief scientist post went to Rayid Ghani. For his former employer — management consulting firm Accenture — he had studied consumer habits to help corporations anticipate their future behavior. He did much the same for the Obama campaign: building analytics tools to help identify voting patterns.

Many of the 2016 election candidates seem to be following the same model. Ted Cruz, for example, linked his win in the Iowa caucuses to microtargeting research efforts by his team of data analysts, according to an article in Bloomberg Politics. When the team discovered that 60 voters could be swayed by a candidate in favor of ending a state ban on fireworks sales, the Cruz campaign developed a position on the topic and let those voters know.

Gulati, who has studied the impact of data and media on elections, frames analytics as a modern way to bolster the longtime building blocks of politics: relationships and connections with supporters and prospective voters.

“The purpose of using analytics is to more efficiently allocate resources to the more traditional enterprises of a campaign,” he says. “The data that campaigns collect from your and my interaction on social media and the Internet is primarily a tool to identify people, with the goal of getting them to attend a local meet-and-greet.”

There’s been a recent move away from compiling files on voters based largely on their history at the polls or political engagement online. Campaigns are using information collected about people’s general behavior on the Internet. The intent: create a personality profile that might help shape what sort of ads or messages would appeal to someone who bought, say, Ray Ban sunglasses. Analytics can also help identify specific audiences for specific messages, not unlike how a company might choose to advertise on a particular television station, knowing that its desired demographic would be tuning in and attracted to the advertised product or service.

 

Social Studies

To an increasing degree, campaigns are finding that ads on television and radio — however well targeted — are less impactful than they once were. Social media has emerged as an essential tool for reaching large numbers of potential voters where they live — on the Internet.

Just like companies, candidates and their campaigns have to develop and sell a brand. The “consumers” are prospective voters and the metric of success is engagement, both on social media platforms and in real life at the ballot box and on the campaign trail.

Observes Gulati: “Campaigns use social media to reach people in the two constituencies who pay attention to social media — candidates’ supporters and the news media.”

At its most basic level, social media is an extension of everyday human relationships, which are at the core of any successful business. Campaigns must work to know their target audience, interact with its members and build a network — online and in person. This is particularly important at the federal level, as candidates need to reach millions of people in efficient and market-penetrating ways.

Now more than ever, candidates and elected officials use Facebook, Twitter, Instagram and Snapchap to handle that outreach and interaction. Those are where a growing number of people get their information about candidates.

Though the 30-plus demographic still relies primarily on cable television news, over one-third of 18- to 29-year-olds say social media is the most helpful source for learning about the 2016 presidential election, according to a January survey by Pew Research Center. (Even if they’re simply following the Twitter conversations between @HillaryClinton and @realDonaldTrump.)
  
Pew study from 2014 reported that an average 16 percent of registered voters follow the accounts of politicians or political parties via social networking sites. Among 18- to 29-year-olds, the figure was 24 percent. According to Pew, the average among all voters rose 10 percentage points from the previous midterm election, in 2010. The most significant increase in social media engagement with politicians was in the 30- to 49-year-old demographic, where 21 percent of voters in 2014 followed political accounts, up from 6 percent.

Another key finding of the Pew poll: 35 percent of registered voters who followed candidates or officeholders on social media said doing so made them “feel more personally connected to a politician or group.”

Personal connection helps companies sell products and campaigns sell candidates.

An honors capstone project by John Bishop ’16 examined the effect of social media on political campaigns. His interviews with social media managers for politicians showed that all considered the current election year an aberration in terms of using social media effectively to gain voters.

“But while they see social media as an anomaly, I see it as a potential new dawn of political campaigning,” says Bishop, who just started working as a data analyst for Fidelity Investments. “Social media allows news to travel faster than ever before and creates a forum for discussion that is larger than ever before. In this day and age, a low-key social media presence may be enough to derail a campaign.”

If candidates want to succeed in the current political arena, they have to start thinking like companies.

“In a company, everyone’s goal is to make enough money to keep your business in good shape, pay your employees and make a profit,” says Paige Johnson ’15, who managed events and operations for Marco Rubio’s presidential campaign. “It’s similar on a campaign. If you don’t have the money to pay your staff, the candidate’s travel, venue rentals for events, signage and so on, you will fail.”

The Public Policy and Business Studies major finds her background in marketing and finance an asset in her new job: raising funds for New Hampshire congressional candidate Rich Ashooh. “As much as I dreaded [the courses] GB 112 and 212, the things I learned are a lot more helpful in setting up a finance plan than I could have imagined.”

 

“Politics is not much different [from business] at a granular level. Campaigns and elected officials need people who know business, who can budget as accountants, who are operational and strategic thinkers. Elected officials often turn to people in business for their professional expertise and insight.” — Christopher Burgoyne ’07

Résumé includes: Special Assistant to U.S. Sen. Scott Brown (Mass.); Operations Manager, Charlie Baker for Governor (Mass.)

Now: Director of Political and Government Affairs, American Hotel and Lodging Association