By Edgar Sanchez @svcrowdfundnews
www.SVCrowdFundNews.com

During his 2012 re-election campaign, President Barack Obama was losing the fundraising battle. He simply couldn’t keep up with Mitt Romney, his Republican opponent who was getting million-dollar checks from an army of wealthy conservative donors.

So the Obama campaign fine-tuned its crowdfunding machine, which it had used to great effect when Obama first ran for the White House four years before. It began sending carefully-crafted cash solicitations to his followers through e-mail, social media and text messages. Many of the recipients became the “very smallest of donors,” as the New York Times put it.

In one e-mail plea, authored by Obama himself in late June, he warned that, “I will be outspent.”

“I will be the first president in modern history to be outspent in his re-election campaign, if things continue as they have so far,” he wrote.

“The Romney campaign raises more than we do, and the math isn’t hard to understand: Through the primaries, we raised almost three-quarters of our money from donors giving less than $1,000, while Mitt Romney’s campaign raised more than three-quarters of its money from individuals giving $1,000 or more,” the e-mail said, adding:

“And … that’s not including the massive outside spending by super PACs (Political Action Committees) and front groups funneling up to an additional billion dollars into ads trashing me, you, and everything we believe in.”

“We can be outspent and still win,” the e-mail continued, “but we can’t be outspent 10 to 1 and still win.”

Recipients of the e-mail were asked to donate as little as $3 each, or whatever they could afford, to Obama’s re-election drive. All they had to do was click an amount on a donor window below the message.

“More than 2.2 million Americans have already chipped in for us,” the e-mail continued. “ … Can you make a donation today?”

People donating that day would be entered in a contest to dine with the president and First Lady Michelle Obama, the e-mail promised.
By raising $2.6 million, that e-mail became the most successful of Obama’s 2012 campaign.

In the end, both Romney and Obama raised $1 billion each, making the 2012 presidential race the most expensive in history.

About half of Obama’s donations came from crowdfunding. Of course, the president also had million-dollar donors, one of the biggest being Jeffrey Katzenberg, chief executive of DreamWorks Animation. He contributed more than $2.5 million to Obama’s re-election and to a pro-Obama PAC.

Crowdfunding to help pay for TV ads, Obama brochures and other campaign costs was nothing new for him. When he first ran for the White House in 2008, Obama had become the first crowdfunded presidential hopeful. He raised a total of $750 million – with two thirds of it generated online.

President Obama clearly believes in crowdfunding – a concept he says will help America’s continued recovery from a dismal recession. In April 2012, he signed the bipartisan Jobs Act, which will allow small donors to pool their dollars and collectively back small businesses and start-ups in return for equity shares. Equity-based crowdfunding will begin once the Securities and Exchange Commission issues rules for it.

“I’ve always said that the true engine of job creation in this country is the private sector, not the government,” Obama said in signing the bill. “That’s why I pushed for this bill.”