The Economic Impact of Campaign Donations

Campaign Sign

Buying these signs for my campaign helped a local small business support their employee payroll and operating expenses. It also yielded sales tax revenue that funds necessary items like roads and police protection.

How a candidate handles his or her campaign finances is public record — at least if they spend or raise over $500. In Arkansas, municipal candidates have to submit a pre-election financial report and a post-election report. I fall into that group that had to file.

I wish campaigns could be run and won with love, encrouagement, and Facebook LIKES, but it just isn’t enough. It takes a smart marketing strategy. It involves a lot of personal touch with voters to create the top-of-mind awareness that a serious candidate needs. The time (sweat equity) candidates and their campaign volunteers invest merely to earn the opportunity to serve is perhaps the greatest cost of all.

I love talking to other candidates talk about their campaign marketing strategy. I’m a big fan of grass roots, street marketing used in business. There is a lot business owners can learn from the campaign process.

I’m also a realist who understands how and why different marketing techniques work. And I’m amazed at what it costs to run for office if a candidate really wants to serve.

It is not unusual for some opposed races in Northwest Arkansas to raise and spend over $100,000. Just the effort of fund-raising for a campaign is time-consuming and requires a strategy all its own. At first glance, it does seem like that money could be put to better uses.

My husband and I are faithful givers of our money, time, and business assets to support organizations and people that invest their time and energy in making the world a better place. We’re glad that we do that alongside a lot of other people who invest their personal and financial assets the same way. We don’t ask whether the donation is tax-deductible; we just do it.

But let’s not disregard what happens when that money is donated to candidates for use in their campaigns:

  • Because someone bought campaign signs, T-shirts, or other promotional items, it funds payroll for employees working for the small businesses who create those items.
  • When someone buys radio, newspaper, or television advertising, an advertising representative made a commission. It also supports a media organization that employs staff members and allows them to provide a necessary communication medium to our citizens.
  • When a candidate buys a chamber of commerce membership (or other organizational membership) for use with their campaigning, it funds the organization’s employee payroll and member programs.
  • When a candidate attends charity fundraisers, luncheons, and other events in support of their campaign, it supports those organizations and businesses so they can support their programs and payroll.
  • Larger campaigns often hire paid staffers. Again, those are jobs that allow people to make money to spend in the community.
  • Many of the campaign purchases yield sale tax revenue that support necessary items like roads and police protection.

And let’s not forget what happens when volunteers give their time to a campaign:

  • They learn valuable skills such as fund-raising strategy, sales, marketing, leadership, training, bookkeeping, and team-building.
  • They create a stronger network so they are able to get things done on future endeavors they work on. Many build friendships that last a lifetime.
  • Those that help with the door-to-door work get exercise in the sunshine and fresh air.
  • They build a volunteer resume that will help them advance professionally.

No matter what your party affiliation, it is hard to argue with the value of the reinvestment of the money that donors entrust to a candidate’s wise stewardship. The money is normally spent in ways that provide necessary services and jobs. Those expeditures often result in sales tax revenue as well.

In Arkansas, we have a very cool incentive for supporting our state candidates. The State of Arkansas has a tax credit available to every taxpayer that contributes to a political campaign. Form AR1000TC explains this tax credit (offered on Form AR1800 in previous years). In essence, a married couple can contribute up to $100 (single filers $50) to a campaign and receive that $100 back on their tax return, dollar for dollar.

Here is the link to the form:

If you’ve donated to my campaign or any other candidate’s campaign, thank you. You are not only providing valuable fuel for the political process but you are supporting our economy and funding jobs.

If you haven’t donated to an Arkansas candidate yet, don’t let another moment go by to use that tax credit. Donate to a local candidate today.

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