After Election Day, even a winning campaign’s finances can be in the red. The election may be over, but the candidate’s commitment to the campaign remains. For those who were unsuccessful, remember the desire to be in a leadership position. This is an opportunity to showcase fiscal prowess.
Campaign debt generally falls into one of three categories: vendors, campaign staff and consultants, or a candidate’s personal loan. By committing to the step-by-step plan provided below, prioritizing creditors and supporters along with effective communication, campaigns can pull their finances back into the black.
Breathe and Commit
Whether a local, statewide or presidential campaign, all have incurred some form of campaign debt in order to obtain a winning edge. The first step towards eliminating campaign debt is to take some calming, deep breaths. Candidates willing to take leadership in navigating from red to black must next commit to a process, regardless of emotions or setbacks.
The late Zig Ziglar, a motivational speaker and author, liked to say: “Lack of direction, not lack of time, is the problem. We all have 24-hour days.” Debt is a reflection of a candidate’s acumen to manage finances, demonstrate leadership and willingness to take responsibility. Post-election, immediately identify and list creditors in order to begin working towards eliminating those debts as soon as possible.
First on the list of debt elimination are campaign vendors. Arguably, campaign staff and consultants devoted countless hours to ensuring the campaign’s success. And during a campaign, staff and consultants are often counted upon to advise the candidate as to whether or not to enter into vendor agreements.
Vendors, however, are unaware of the campaign’s financial health and provide services in expectation of payment within the terms provided. Therefore, it’s only good business practice to prioritize vendors before campaign staff and consultants — especially if you plan to run again.
If the candidate made personal loans to the campaign, he or she is last on the list of priorities. Often times, candidates make personal loans in order to pump-up total contributions received or provide necessary funds for mail pieces or a media push. Unless this loan was ill-advised and put the candidate in dire straits, the candidate should repay staff and vendors before him or herself.
After creating this list, itemize the list of outstanding debts and summarize each group, along with total campaign debt.
Contact the vendors directly, starting with largest creditor, then work down the list to the smallest. Ask if they would be willing to forgive a portion of the invoiced debt (i.e. postage costs, printing, delivery charges). The worst that could happen is they say no. The best that could happen is that a portion or all of the debt is forgiven.
Throughout the process remain mindful of financial reporting laws. Forgiven debt is considered an in-kind contribution and subject to reporting. Also, inquire with larger creditors and determine if they would be willing to accept regularly scheduled payments until full payment is available.
Above all, remember that communication is key. Be honest with all those the campaign remains indebted to and assure them of the commitment to pay what is owed. Responsibility and integrity go a long way, especially when their services may be used again in the future.
The most effective individual to personally outreach to prior donors and solicit their support post-election is the newly elected official. A newly elected or reelected official will have an easier time gaining the support of former donors, PACs and organizations than prior to the campaign’s success.
Create a finance committee to efficiently and strategically eliminate campaign debt. Committee members should consist of movers and shakers in the community who are committed to reaching out to their business colleagues or friends for support.
Since the goal is to eliminate debt, costs should be kept to a minimum and sponsored by the finance committee member. Conference calls or informal meetings such a coffee, small luncheon or home gatherings between the elected official and potential supporters are low-to-no cost ways of fundraising. Formal fundraising events are the last resort, unless it’s guaranteed that overhead costs and fundraising goals will be met.
Keep in mind, many individuals and organizations sit on the sidelines waiting for the winner to be declared before they decide to lend their support. Consider reaching out to those solicited during the campaign who didn’t contribute prior to the win. Also, the opponent’s list of donors should be thoughtfully and ethically considered as potential supporters.
Organize the list of potential supporters, prioritizing those who are known on a personal basis and able to contribute generously to those not well known and likely to contribute minimally.
The first time supporters hear from the candidate after Election Day shouldn’t be for another solicitation for contribution. Whether via group email or personal phone call, the campaign’s first point-of-touch with supporters should be with a message of thanks and appreciation for their efforts.
Shortly thereafter, schedule phone calls or meetings between the candidate and the campaign’s core supporters, along with potential donors. Ask for their help in paying off a specific amount of campaign debt. Explain why the debt was necessary to position the campaign closer to its goal. Consider asking for equal to or more than they had contributed before, but not to exceed campaign contribution limits.
It’s a proven fundraising principle that donors who gave before will more than likely give again, especially if the candidate won. Therefore, any hesitation about revisiting prior donor lists needs to be quickly overcome.
The Pay Off
Consider paying off debts in order of highest interest rate to the lowest. After paying off the first creditor, apply all monies towards the next creditor. The payoff transcends debt elimination — it speaks to the character of the elected and value placed on community relationships.
Win or lose, placing campaign finances back in black is critical to how favorable candidates or elected officials are looked upon, especially should they consider future campaigns.
Susie Avila is the founder and CEO of Avila Alliance, a political fundraising and consulting firm.