Wednesday, April 21, 2010

Exposing The Culture Of Political Donations

The main stream media and the Internet bloggerheads, in their infinite wisdom, place an inordinate amount of emphasis on how much money a political party or candidate raises for their elections.

As a student of political science, I view fund raising success as a major player but not the only one by far in judging the outcomes of pending elections.

No question money talks. The extreme examples are millionaires such as Michael Bloomberg and John Corzine essentially buying their way into office of New York City Mayor and U.S. Senator and governor of New Jersey, respectively.

But as The Moderate Voice's knowledgeable Joe Gandelman notes in a post Wednesday, money isn't everything. His argument that the Democrats' major fund raising committees raised $29 million in March compared to the Republicans' $24 million doesn't mean squat (my word, not his).

There are no guarantees in politics even though money is the mother's milk of the process.

The question I ask, is donating to a political campaign a wise investment. It almost always is for the beneficiary. Ask yourself when was the last time a President of the United States was not richer two years after leaving office than he was before his election. The most recent examples parlaying the metophoric rags to riches theme are Jimmy Carter and Bill and Hillary Clinton.

On Wednesday the Washington Post reported findings of an analysis they paid for detailing questionable expenses the two national political parties filed with the Federal Elections Commission. Keep in mind the money came from private donations. I will list one example from each party.

The RNC's expenditures for "office supplies" in the period through February topped $773,000, according to a Post tally, including jelly beans for (RNC Chairman Michael) Steele's office and thousands of dollars' worth of liquor and wine. Although not asked to review specific party expenditures, Mindy Kramer, an Office Depot spokeswoman, said that in general, firms with 100 office workers -- about the size of the RNC headquarters staff -- spend $30,000 to $50,000 a year on supplies. 

And, on a smaller scale, the DNC spent $666 for "rental" costs at a store called Tiny Jewel Box in which store personnel were unaware of any DNC event.

The truth is these campaign spending reports are lame efforts by both national committees to comply with FEC questions they deem as too broad, leading to clerical filing errors.

They make good copy, as we say in the trade, but signify almost nothing.

But the Post story did shed light on a couple of areas that are important. For instance, the analysis said the Democrats spend about 59% of total donations on administrative costs for every $100 million collected while the Republicans spent 68% or $74 million of $109 million in revenue.

Meanwhile, the typical nonprofit organization, the Post reported, holds administrative expenses and fundraising to no more than 25% of income.

Ken Berger, who runs Charity Navigator, a New Jersey group that monitors nonprofits across the country, said that "the most critical measure is effectiveness." He said his advice for prospective donors to any nonprofit group that spends as much as 60 to 70 percent of revenue on overhead, including fundraising, would be to "run away." 

My conclusion is political cash donors don't give a damn how the money is spent as long as it gets results.

It is the same culture as we see in financial institutions where executives and aggressive brokers are compensated in the millions even if they bet on bad risks that drive the economy into a meltdown.

It has occurred to me that people who receive nothing in return for donating to a political cause may be the same ones who claim they pay too much in taxes to the governments.

Is America great or what?

Readers comments are welcome as long as they remain civil. We reserve the right to delete any comments that are vulgar, libelous and totally irrelevant to this posting. -- Jer

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