Washington Post: Democrats Need Smarter Political Investing
This is exactly why Blue Impact Network was created
If you've been following Blue Impact Network, you know that we've been preaching about smarter political investing for left-leaning donors. Ethan Roeder, a former director of data for Barack Obama's Presidential campaigns, affirms this approach in an article published by the Washington Post:
What I propose is investing in campaigns following the same framework that guides financial investors toward diversification: I call it the Modern Portfolio Theory for Campaigns. Like its financial counterpart, it spreads out investments to limit risk, is optimized for long-term rather than short-term results and, perhaps most revolutionary for politics, is more concerned with the performance of the overall portfolio than with any one component (i.e., a candidate).
Instead of placing a few extremely large bets, political investors using this theory would expand their portfolios to include undervalued races and only fund top-tier races to a reasonable level. While lesser-targeted races are riskier, your marginal investment goes much further in an undervalued race than an overvalued one. If one or two of these riskier bets should pay off, you will have achieved an enormous return for a modest investment. So you will have both increased the potential upside of your portfolio and reduced your overall risk profile.
In devising this strategy, I analyzed finance data from more than 10,000 state legislative races in 10 states spanning two decades. I found that the most well-funded 10 percent of races consistently received 35 percent or more of the total campaign funding for a given chamber. In the most extreme cases, this figure was as high as 78 percent. I also found that, overall, Democrats were more likely than Republicans to concentrate their investments in a small number of races.
Strategic investing is how Republicans ended up with complete control of the Federal government and 26 states (compared to just 8 states for Democrats) despite the fact that millions more Americans voted for the Democratic candidate for President in 2016. CLICK HERE to return to our home page and get started yourself.