By Bob Eschliman
Editor
All of the major Republican presidential campaigns met their Thursday deadline last week to report their third-quarter financial reports. And, after some rather low-tech number crunching, there are certainly some questions that remain to be answered.
But first, let’s take an in-depth look at the numbers, why they’re important, and what it means for the future of the GOP presidential primary race.
• • •
Fundraising
One of the best indicators of the overall financial health of a campaign is its ability to raise money — and lots of it — throughout the course of the election cycle. If you can’t bring in enough to pay the bills, or if your fundraising drops off significantly, these are easy signs of trouble.
The October reports were the first chance we had to see all of the announced campaigns on an even playing field. Also, keep in mind that Donald Trump is self-funding his campaign and not soliciting donations (although he does receive some), so he earns an asterisk in almost every category.
But, here is how the campaigns ranked in terms of total money raised in the third quarter of 2015:
- Ben Carson $20,767,266
- Jeb Bush $13,384,832
- Ted Cruz $12,218,137
- Scott Walker $7,379,170
- Carly Fiorina $6,791,308
- Marco Rubio $5,724,784
- John Kasich $4,376,787
- Chris Christie $4,208,984
- Donald Trump * $3,926,511
- Rand Paul $2,509,251
- Mike Huckabee $1,241,737
- Lindsey Graham $1,052,657
- Bobby Jindal $579,438
- Rick Perry $287,199
- George Pataki $153,513
- Rick Santorum $4,126
* — Self-funded candidate, most of the revenue is in the form of personal contributions
Change in Fundraising
An important indicator is found in the comparison in fundraising from one quarter to the next. A good communications team will project this publicly as “momentum,” which is an apt description of what that number indicates.
In the case of fundraising, three of the campaigns filed their first financial reports in October, which means there isn’t any second-quarter numbers to compare. Also, Donald Trump’s self-funding apparatus makes this kind of comparison irrelevant.
Of the remaining 12 campaigns, five saw fundraising increases, while seven saw decreases.
Here are the five that saw increases:
- Ben Carson $12,298,218
- Carly Fiorina $5,086,605
- Ted Cruz $2,174,757
- Jeb Bush $1,954,935
- Bobby Jindal $680
Here are the seven that saw decreases:
- Rick Santorum – $12,930
- George Pataki – $102,281
- Mike Huckabee – $762,725
- Rick Perry – $852,167
- Lindsey Graham – $2,656,895
- Marco Rubio – $3,148,123
- Rand Paul – $4,423,528
Spending
The next good indicator of the financial well being of a campaign is how it is spending. Heavy spending indicates a campaign that may be overstaffed, or perhaps one that is spending a lot of money for media access. Neither of those are positive signs for a campaign.
Here is how the campaigns ranked in terms of total money spent in the third quarter of 2015:
- Ben Carson $14,240,044
- Jeb Bush $11,465,513
- Ted Cruz $6,966,829
- Scott Walker $6,393,957
- Marco Rubio $4,607,861
- Rand Paul $4,546,611
- Donald Trump * $4,159,474
- Chris Christie $2,822,537
- Carly Fiorina $2,232,773
- Lindsey Graham $1,984,167
- John Kasich $1,734,838
- Mike Huckabee $1,365,797
- Bobby Jindal $832,214
- George Pataki $347,563
- Rick Perry $287,199
- Rick Santorum $1,227
* — Self-funded candidate
Cash on Hand
The remaining funds for the campaign at the end of a reporting period — given the misnomer “cash on hand” — is another indicator of a campaign’s overall health. It shows both the level of fiscal responsibility the campaign has engaged in, as well as the potential to continue campaigning should fundraising take a temporary hit.
Campaigns that continue to build cash on hand during each reporting period are building a war chest that can be used later in the campaign. This will become very important when facing off against the Democrats’ fundraising prowess in the General Election campaign.
Here is how the campaigns ranked in terms of cash on hand at the end of the third quarter of 2015:
- Ted Cruz $13,778,904
- Ben Carson $11,272,534
- Marco Rubio $10,975,988
- Jeb Bush $10,271,129
- Carly Fiorina $5,549,194
- John Kasich $2,641,949
- Rand Paul $2,124,155
- Lindsey Graham $1,651,309
- Chris Christie $1,386,447
- Scott Walker $985,213
- Mike Huckabee $761,410
- Bobby Jindal $260,939
- Donald Trump * $254,772
- Rick Perry $44,553
- George Pataki $13,570
- Rick Santorum $13,347
* — Self-funded candidate
Financial Outlook
A campaign’s cash on hand changes from quarter to quarter based on its fundraising ability and spending habits. The change from one quarter to the next is another good indicator of the overall health of a campaign and its long-term viability.
Once again, three of the campaigns filed their first reports in October, so they won’t appear here. Donald Trump is self-funding, making this aspect of the financial reports irrelevant. Of the remaining 12 campaigns, six saw an increase in cash on hand, and six saw a decrease.
Here are the six that saw increases:
- Ben Carson $6,527,222
- Ted Cruz $5,251,309
- Carly Fiorina $4,558,536
- Jeb Bush $1,919,319
- Marco Rubio $1,116,923
- Rick Santorum $2,898
Here are the six that saw decreases:
- Mike Huckabee – $124,061
- George Pataki – $194,050
- Bobby Jindal – $252,775
- Rick Perry – $839,360
- Lindsey Graham – $931,510
- Rand Paul – $2,037,360
Burn Rate
There are a lot of ways various campaign consultants and political analysts can calculate what is known as “burn rate.” In essence, it is the speed at which the campaign is “burning” through the money it is raising. For this exercise, we’ve looked at the burn rate two different ways.
In the first, we’ve looked at how quickly the campaigns burned through the money they raised in the third quarter. Are they building up a war chest, or are they writing checks their bodies can’t cash? Here is how the campaigns ranked in terms of burn rate, expressed a percentage of third-quarter funds spent within the quarter (WARNING: some of these numbers will be obscene):
- Rick Santorum 29.74%
- Carly Fiorina 32.88%
- John Kasich 39.64%
- Ted Cruz 57.02%
- Chris Christie 67.06%
- Ben Carson 68.57%
- Marco Rubio 80.49%
- Jeb Bush 85.66%
- Scott Walker 86.65%
- Donald Trump * 105.93%
- Mike Huckabee 109.99%
- Bobby Jindal 143.62%
- Rand Paul 181.19%
- Lindsey Graham 188.49%
- George Pataki 226.41%
- Rick Perry 392.26%
* — Self-funded candidate
Next, we’ve looked at how the campaigns have burned through the money they’ve raised throughout the course of the campaign. This is a little trickier, because the individual campaign ages vary greatly. In this case, a burn rate — expressed as a percentage of total spending compared to total fundraising — above 50 percent (with Donald Trump as the notable exception) is a red flag:
- Carly Fiorina 34.68%
- John Kasich 39.64%
- Ted Cruz 48.14%
- Marco Rubio 50.78%
- Jeb Bush 58.61%
- Ben Carson 64.11%
- Lindsey Graham 65.32%
- Chris Christie 67.06%
- Mike Huckabee 76.54%
- Bobby Jindal 77.47%
- Rand Paul 77.50%
- Scott Walker 86.65%
- Donald Trump * 95.63%
- George Pataki 96.68%
- Rick Santorum 109.93%
- Rick Perry 120.86%
* — Self-funded candidate
What Does It Mean?
From the onset of his campaign, it was clear that Donald Trump would be a formidable presence, just in terms of his ability to fund himself without seeking donations. His staying power in both the Iowa and national polls has been a testament to the overall strength of his campaign going forward.
For the rest of the field, the other candidates can be right as rain on the issues, but dead in the water without money. How they take care of the money entrusted to them says a great deal about how they will attempt to manage the nation’s finances (Congress still holds the power of the purse constitutionally), as well.
Four candidates saw significant changes in their financial standing over the course of the third quarter, three of whom can equate that to momentum. They were: Ben Carson, Carly Fiorina, and Ted Cruz. Jeb Bush as the establishment “frontrunner” should automatically be on that list every quarter (if he wasn’t, it would be a headline).
In terms of cash on hand, Trump remains a bottomless purse, but three other candidates are in fairly good shape. They are: Cruz, Rubio, and Fiorina. Fiorina and Cruz have the best campaign-long burn rates, and Rubio isn’t too far into the danger zone.
Bush and Carson have very large war chests, but their campaigns are burning through cash at alarming rates. Unless their fundraising keeps up (a huge feat for any of the campaigns right now), they may run out of funds before the end of the year, based on their current spending patterns.
The burn rates tell the biggest piece of the story, though. They explain the early exits for both Rick Perry and Scott Walker, and suggest more are probably on the way soon. Candidates to be “the next one out” include: George Pataki, Lindsey Graham, Bobby Jindal, Mike Huckabee, Chris Christie, and Rand Paul.
Notwithstanding messaging and polling, the candidates in the best position right now are Trump, Cruz, Carson, Fiorina, and Rubio.
The Outlier
Also readily evident in the numbers is a separate story regarding former U.S. Sen. Rick Santorum. Somehow, he has managed to maintain a campaign with stops in all 99 Iowa counties — many of them more than once — on less than $65,000.
If, despite all odds against it, Santorum is able to win the Iowa Republican Caucus in February, it will be the biggest underdog story in U.S. political history. We’ve asked his campaign to explain how it’s been able to run on a shoestring budget, but have not received a response.
We will continue to ask until we get answers, and when we do, we’ll report it to you.
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