But I’m guessing your board or boss want a bit more rationale than that, so let’s dive in.
First, political contributions from individuals isn’t all that big. Politico estimates that in the 2020 cycle in total, $6.7 billion will be spent on media (with $2.2 billion already out the door). Add in a few billion for non-media spending and you are somewhere around $10 billion. Sounds like a sizable chunk of change.
Except that last year, nonprofits raised $449 billion. So political giving is about 2-3% of nonprofit giving. Not a huge amount in comparison.
Second, it’s unclear whether political giving increases or decreases charitable giving. A Merkle study of 1997-2007 found:
“Findings indicate that little or no adverse relationship between presidential campaign fundraising and charitable fundraising giving. In other words, during periods of heavy political fundraising, revenue for charitable fundraising was not noticeably affected.”
And a Blackbaud report on giving between 2011 and 2012 found that people who gave to political campaigns increased their giving in the election year. Non-political givers didn’t.
But let’s go to the academic research. There are two big studies on the issue. One says that when charitable giving goes up, political giving goes up and vice versa. The other says that when charitable giving goes up, political giving goes down and vice versa.
I tend to believe the latter study that charitable giving and political giving are modest substitutions. This is because the study looked at both sides of the coin. It found when there’s a natural disaster, giving to the Red Cross goes up and political giving goes down; when there’s an increase in political ads, giving to politics goes up and giving to the Red Cross goes down.
But if we’re looking at the score card, that’s one win, one loss, and two ties, which won’t get you into playoffs.
But let’s say there is a trade-off and it’s as big as the one study that indicates there’s a trade-off says it is. The study found that when advertising went up significantly, political giving went up 9.2% and charitable giving went down .7%.
So, third, the worst-case scenario is a drop of less than one percent. I worry about every dime. I’m from the Fiorello La Guardia school of running direct marketing programs: the former NYC mayor once said that if a sparrow dies in Central Park, he felt responsible.
That said, how many of you would be ecstatic if something, anything, came in within .7% of what it was supposed to do this year? In this year, anything less than one percent falls squarely into the highly-annoying-but-not-fatal category.
This is why, fourth, presidential elections haven’t hurt giving before. Here’s the GivingUSA data, with the presidential election years marked:
The only downturn was in 2008; I can state with strong confidence that it wasn’t because of the presidential election.
So, a small amount of spending may or may not have a tiny impact on charitable giving, but generally hasn’t before.
What impacts will it have?
Clearly, attention. It’s going to be more challenging for nonprofits to control a media narrative for any extended time, to the extent we were able to before.
TV will also likely get more expensive. Mayor Bloomberg’s run in the primaries gives us a sneak preview of what may be in store. Political TV prices increased 20% while he was doing buys. Particularly competitive markets like Houston (or, rather, ones they aimed to be competitive) saw ad prices spike by 45%. But because 2020 has been, well, 2020 and TV ad prices have plummeted, it’s unclear whether this will cause an increase in ad prices or a temporary return to near-normality come October (when ads hit heaviest)
Likewise for digital spending. The cycle is projecting $1.8 billion in total digital ad spend. This has increased ad costs from our digital overloads in the past, but this time, they are starting from in the hole.
So, like every election cycle, this one will be expensive and full of sound and fury. But in a world where there are plenty of things to worry about, we think you can safely worry about those other things.