The Perils of E-Fund Raising

The Perils of E-Fund Raising

The Perils of E-Fund Raising

Tracking politics as it's practiced on the Web.
Sept. 24 1999 3:30 AM

The Perils of E-Fund Raising

34000_34651_islogo_130x20

Slate

Industry Standard

The pitch arrived by e-mail, and it was a direct appeal for money.

Advertisement

It appeared to come from Tim Draper, the Silicon Valley venture capitalist, whose e-mail would be eagerly read by anyone interested in the financing of technology businesses. But this message wasn't about funding technology: It was about funding the next president of the United States.

"Dear Friend," it began, "Please send $1,000 and call five friends to join us in support of George W. Bush for president." The e-solicitation, dated Sept. 4, gave out Draper's office phone number at the firm of Draper Fisher Jurvetson, his e-mail address, and a place for checks to be sent.

Contributors who raised $5,000, the e-mail said, could "be listed as a cohost and be invited to the VIP photo reception" at an event in Redwood City, Calif., Sept. 30. The final line said: "P.S. Forward this e-mail on to your address list and get some viral marketing going."

Many recipients did, but at least a few questioned whether this was an authorized request for money, or a hoax. "Obviously, someone is out to get him," said Dave Alexander, executive vice president of VirtualFund.com, shortly after receiving the e-mail. Alexander predicted that Draper would be flooded by angry complaints from people "who don't know who he is and who think he really did spam them."

Advertisement

In fact, Draper did spam them. "The e-mail was real," Draper later confirmed. "I'm happy about it because I happen to think George Bush is the best man for the job."

Welcome to the murky world of e-mail fund raising.

As more Americans and more political campaigns get on the Internet, e-mail is replacing many of the campaign tasks traditionally handled through telephone and direct mail. About $3 billion will be spent on all political direct mail in the current four-year electoral cycle, according to Ron Faucheaux, editor in chief of Campaigns & Elections magazine. In many cases, direct mail represents a campaign's single largest expenditure (although presidential campaigns have a different spending mix, because of their lopsided use of TV advertising).

As a fund-raising device, e-mail has powerful advantages over direct mail. For starters, it's essentially free. It's also self-replicating: One enthusiastic recipient can easily send e-mail along to dozens of others, without the campaign having to rent an additional donor list.

Advertisement

But as the Draper incident shows, the process can also create some unexpected headaches. A traditional direct mail solicitation usually contains legal reassurances that the solicitation is authorized (and the cost of postage makes an unauthorized mailing an expensive proposition), which some e-mail solicitations currently lack. Also, most individuals do not screen their e-mail address books politically, meaning that a solicitation sent out to all a person's contacts may well end up in the hands of someone who doesn't want it--which could turn into a public relations problem.

That's what happened when Anthony Perkins, editor in chief of Red Herring magazine, sent out an invitation to the same Bush luncheon as Draper. He used a list from Red Eye, one of the e-mail newsletters that Red Herring publishes. Using a pun on Red Herring's name, Perkins' note appeared to imply that a Bush donation would enhance readers' relationship to the publication. "If you want to be a really big Fish, you can become a cohost of this event by committing to raise $5,000, which will get you into a special VIP reception with the governor," the e-mail said.

The message confused some of Red Eye's subscribers, and Red Herring rapidly began a damage control campaign. (Perkins did not respond to several requests for an interview.) First, the publication took the position that the e-mail pitch mistakenly went out under the guise of a Red Eye editorial product, when in fact it was a paid political advertisement.

A few days later, Perkins sent out a letter to Red Eye subscribers, apologizing for the blurring of journalistic and political lines. "As you know, I have strong political ties to presidential candidate George W. Bush, however these are not the opinions of Red Herring Communications nor do they influence the journalistic ethics of any of the editorial properties of Red Herring Communications," Perkins wrote. "I apologize for the miscommunication and hope it did not cause any irritation or confusion."

Perkins has said that he will personally pay the $900 cost of the list rental to Red Herring Communications (which to some degree is the same as paying himself, since he is the company's largest shareholder). Moreover, Perkins told the New York Observer that he would record the expense as an in-kind contribution to the Bush campaign. His apology e-mail, however, did not mention this contribution, and as of Sept. 21, it had yet to show up on the Bush campaign's online daily roster of campaign donations. The Bush campaign did not respond to a request for comment.

Perhaps to avoid such sticky situations, some of Bush's presidential rivals are steering clear of the e-fund-raising path--at least for now. Steve Forbes' campaign accepts donations through its Web site and sends out thank you notes via e-mail to those who contribute online--but that's all. "We haven't done any e-mail fund raising at all," says Ben Gettler, a spokesman for the Forbes campaign, "and we don't have any plans to do so. We believe our Internet presence is good enough." Of course, Forbes is spending significant sums of his own money on the presidential campaign, making his fund-raising urgency arguably lower than that of other candidates.

Ultimately, says Campaigns & Elections' Faucheaux, the electorate will become accustomed to unwanted e-mail solicitations, just as it is to political junk mail. "As long as donors are comfortable with it being there, I don't see that [e-mail solicitations] have any particular problems," Faucheaux said. "Remember: It's really in an experimental stage right now."