Archive for the ‘Business’ Category

How to Survive the Political Game of Musical Chairs

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When Illinois Attorney General, Lisa Madigan, announced she was going to run for reelection instead of Governor, it sent a full ripple effect down the ballot, as candidates had spent months jockeying for different offices fully expecting her to run for Governor.

Two Democrats in particular, were most affected by Madigan’s decision: Kwame Raoul and Shelia Simon; both were eyeing a run for Attorney General. Instead they were both left to make hard decisions about their political futures. Here’s an example of when push comes to shove, money can help delegate your next seat in the political game of musical chairs.

Sheila Simon was not going to give up her statewide ambitions and with her already abandoning her position as the 46th Lieutenant Governor, she was left to decide between running for Comptroller and Treasurer.

Sheila Simon & Duffy Blackburn (and their spouses) after Blackburn announced he was suspending his campaign. source: Duffy Blackburn Facebook Page

Sheila Simon & Duffy Blackburn (and their spouses) after Blackburn announced he was suspending his campaign. source: Duffy Blackburn Facebook Page

While both offices had other Democrats eyeing those positions, when looking at the money, the choice was clear for Simon. The path to the Democratic nomination for Comptroller looked strategically easier than to Treasurer. While there were other reasons Simon made this decision, one key reason was money. Duffy Blackburn the Democrat running for Comptroller had only about $25,000 on-hand, Mike Frerichs running for Treasurer had nearly $650,000.  It can be said that Simon’s chances for Comptroller were a lot higher since her opposition (Blackburn) had low fundraising support.

Money played a role for both the futures of Frerichs and Blackburn. Frerichs had a built a large war chest which would serve as a firewall to protect him from new challengers. And for Blackburn, it was a demonstrated weakness that Simon was able to take advantage of. Once Simon sat back and looked at the D2’s of her potential primary opponents, it was an easy choice.

Kwame Raoul – Simon’s decision to run for Comptroller was an easy one compared to Raoul. Raoul went on a fundraising tear at the end of June and reportedly raised $462,000 over the previous three-month period. Raoul had the same options as Simon, but apparently has also much more ambition.

State Senator Kwame Raoul. Source: Kwame Raouls' Facebook page

State Senator Kwame Raoul. Source: Kwame Raouls’ Facebook page

Raoul is now weighing running for Governor, which is something he will likely announce in the next week. His impressive fundraising haul is playing some role in the buzz surrounding a potential campaign. Even though he raised only half of what Quinn and Daley raised, he was able to raise enough to be taken seriously by the Democratic players in this state.

This game of musical chairs played by the candidates help reinforce something I tell clients all the time, “If you have money then you have options and power.” Simon chose to take on a much financially weaker opponent in Blackburn, and because of Raoul’s fundraising successes he has some real options to consider.

By Nick Daggers, Vice President, Fundraising

Free Advice: Start Raising Money Yesterday

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Whenever an aspiring candidate asks the question, “when do you think I should start raising money?”  my answer is always the same – yesterday!

I cannot begin to count the times I have joined a campaign right before a critical fundraising deadline. And yet there are countless reasons why raising money early on can be pivotal.  For example, in order to build a successful fundraising operation you must first create a good infrastructure of data and lists. Moreover, early money can create other opportunities that will give you the greatest chance at success.

A good fundraising operation can very easily built if the campaign has a good base of data. Almost any good fundraising operation will start by organizing and sorting (hopefully) hundreds of personal contacts of the candidate. This step can take a considerable amount of time, in many cases candidates will hand their fundraiser a stack full of business cards, their holiday list, (and my favorite) cocktail napkins with notes scribbled on them. Deciphering this data can take a great deal of time and detective work. Usually, this work can be done months before a candidate is ready to announce his or her candidacy. Once some sort of manageable list is in order, the candidate is ready to hit the phones!

By getting a head start on fundraising, the candidate do things other than just spend hours in a dark room on the phone. Many candidates quickly grow tired of call time and want to get to meet voters and campaign for office. However, if they cannot do this until they hit some of the early fundraising benchmarks. By buckling down early and spending hours of the phone can definitely free up the candidates schedule to spend a few more hours a week shaking hands and kissing babies.

Finally, the greatest reason a candidate should start raising money sooner than later is that it will give them the greatest chance at victory. This should be reason enough to convince candidates to start raising money in April instead of June, but that is not always the case. The facts do not lie in many cases the candidate who jumps in early and raises money the fastest can have a greater chance at victory. Early money is a demonstration of strength to both potential opponents and pundits. An early start will also give you a chance to jump out to an early cash advantage, that in some cases your opponent might never be able to catch.

Every candidate could use some free advice, so to those of you thinking about running for office in 2014, 2015 or even 2016, remember it is never to early to start fundraising. An early fundraising start will give the opportunity to build a solid infrastructure, allow the candidate more time to campaign, and most importantly give you the greatest chance at victory.

By Nick Daggers, Vice President, Fundraising

Payday Lenders Moving From the Storefront to the Internet

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For the past year, CFO Consulting Group has been pushing for tighter regulation of the Payday Loan industry within the state of Rhode Island.  Nationally, storefront payday lenders are facing tighter regulations across the country. Twenty-five states currently have pending legislation that pertain to payday lending regulation.

As storefront payday lenders are coming under intense scrutiny in some states, another form of usury is flying under the radar.  Faced with the prospect of storefront payday businesses becoming unprofitable under new regulations, many payday lenders are moving their operations to the shadowy, unregulated world of the internet.  A growing number of the lenders have set up online operations in less regulated states in the U.S. or foreign countries like Belize, Malta, and the West Indies in order to avoid statewide caps on interest rates.  There are a few differences between the traditional storefront payday loan system and the payday loans available online.  Via the internet, there is an immediate approval system, which enables customers to get in touch with numerous “expert” lenders and receive cash deposited directly into their accounts.  This allows lenders to have direct access to borrowers’ bank accounts.

Sadly, major banks have become enablers of internet-based payday lenders.  A recent New York Times article states that while large banks  – including Bank of America, and Wells Fargo among others –  do not make the loans, they are a critical link for the lenders. They enable the lenders to withdraw payments automatically from borrowers’ bank accounts, even in states where the loans are banned entirely. This is a practice that has been flourishing on the internet for years.  However, there has been some movement within the United States Congress and some of the major banks to help combat this issue.

JPMorgan, the nation’s largest bank by assets, will give customers whose bank accounts can be accessed by the online payday lenders more power to halt withdrawals and close their accounts.  Within the United States Congress, Senator Jeff Merkley of Oregon introduced a bill in January to further rein in payday lending.  The bill, S. 172, or better known as the SAFE Lending Act, would crack down on the worst practices of the online payday lending industry and give states more power to protect consumers from predatory loans.  As of March, the bill is sitting in committee.

CFO Consulting Group is looking forward to seeing the United States Senate & House of Representatives vote in favor of the SAFE Lending Act to successfully bring to an end the predatory practice of payday lending in internet and storefront locations nationally.

By Brett Smiley, co-founder of  CFO Consulting Group

Helping Rhode Island’s Marriage Equality Bill Gain Momentum

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The issue of same-sex marriage is an argument that all of us have heard, and most of us have strong opinions on. As Dr. Martin Luther King Jr. once said, “marriage is a basic human right. You cannot tell people they cannot fall in love.” While he said this in reference to marriage between races, the same can be said about homosexuals.

Public attitudes toward gay marriage are a mirror image of what they were a decade ago: in 2003, 37 percent favored gay nuptials, and 55 percent opposed them.  According to the Washington Post, national support for marriage equality is trending upwards with 58% of Americans being in favor of legalizing same-sex marriage as of March 2013.

CFO Consulting Group is proud to be the public affairs team fighting for marriage equality within Rhode Island.  There are currently nine states, plus the District of Columbia, where same-sex marriage is legal.  In addition to this, 3 states are considering bills to legalize same-sex marriage; Delaware, Illinois, & Rhode Island.  In January, the Rhode Island House of Representatives & House Speaker Gordon Fox overwhelmingly passed legislation to allow gays and lesbians to marry in the only New England state where they can’t.

The Rhode Island Senate will be next to address the issue of gay marriage when they return from their recess this week for the final work of their annual session.  The Senate Judiciary Committee is scheduled to consider legislation allowing gay couples to wed. The session is scheduled for 3 p.m. Tuesday, April 23rd. Also up for consideration is a bill that would place the question of allowing gay marriage on next year’s ballot.

The two bills before the Senate Judiciary Committee take different paths.  One would reaffirm Rhode Island’s constitutional  protection of religious liberty.  The other has a long lists of special exemptions and carve-outs,

The major issue keeping Rhode Island from becoming the tenth state to legalize same-sex marriage, and why there are two bills being considered, is the question of how will those that oppose same-sex marriage on religious grounds, including religious institutions, businesses, and hospitals, be affected if same-sex marriage is approved?  More specifically, questions regarding the legality of a business or religious institution denying service to same-sex couples because of religious beliefs will be up for debate this Tuesday.

CFO is looking forward to seeing the Rhode Island Senate vote in favor of the bill and allow all people in Rhode Island, regardless of their sexual orientation, to possess equal rights.

By Brett Smiley, founding partner of  CFO Consulting Group

What will it cost to win back the House?

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By Nick Daggers
Follow Nick on Twitter @nickdaggerscfo 

With the 2012 election in our rearview mirror we are all looking down the road to 2014. After a successful cycle the Democrats gained eight seats in the House but are still 18 seats short of the majority. There are plenty of race trackers and analysts that can offer their thoughts on which seats will be in play and why. I would like to offer a quick demonstration of what we can expect to see spent in a race for the majority.

A good case study to establish an estimate for 2014 spending is to look at the six (8, 10, 11, 12, 13, 17) competitive races in Illinois from 2012. According to the Center for Responsive Politics in the five districts won by the Democrats the campaigns and their allies spent a total of $20.5m, or an average of $4.1m per Democratic pickup.

The Illinois’ 11th and 17th Congressional Districts provide a microcosm of districts across the country that Democrats must win in order to take back the House. In both cases the DCCC was able to help recruit strong Democratic challengers (which will be key again in 2014) to take on popular Republican incumbents. In order to take back the house in 2014, Democrats will likely have to defeat at-least 20-25 Republican incumbents.

In the IL11 Bill Foster defeated Judy Biggert. Foster and his allies had to spend $4.88m in order to secure victory. The IL11 covers a diverse swath of the Western Suburbs of Chicago. Meanwhile two hours to the west is the IL17. In this district, Cheri Bustos defeated one-term Congressman Bobby Schilling. Bustos and her allies had to spend just shy of $4.7m to win.

While the races had many similarities they also had one glaring difference, they both fell into two very different media markets. The IL11 is in the Chicago media market, the third largest in the country, and the IL17 covers the Rockford, Quad Cities, and Peoria media markets, of which only the Quad Cities are a top 100 market.  Since both districts cost about the same to win it helps demonstrate that no matter the media market, Democrats can expect to spend about $4.75m per Republican incumbent they can defeat.

The Democrats are looking at needing to spend $120m just to defeat Republican incumbents. That number does not include the 201 seats we will have to defend and the 100 plus seats that are safely in the Republican column, which can probably be estimated at-least another $200m.

Over the next 18 months we will see exactly how these races play out and if the Democrats and their allies can raise to take back the House. While we won’t know that final number for months to come, we can already guess that just like the past three election cycle we should all expect it to be another record year for campaign spending in the battle for the Speaker’s Gavel!

 

Nick Daggers is a Vice President of Development for CFO. He has spent the last five years working as a fundraiser for political campaigns and non-profits.

Helping Rhode Island Crack Down on a National Problem

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For many of us, Payday Loans are an unknown financial instrument. While many have a general understanding of what pawn shops and check cashers are, payday lenders are a different animal.

Rhode Island’s population is barely over a million and yet nearly 200,000 of these loans are taken out yearly. Payday loans are short term, high interest loans. They are capped at $500, due in two weeks and carry an APR of 260%. For many, these loans are the not the solution to a short term financial crises but rather cover ordinary living experiences. In fact, the average borrower takes out 8 loans per year.

CFO Consulting Group is proud to be the public affairs team fighting for the Rhode Island Payday Loan Reform Coalition. A great coalition is fighting back against predatory lending in Rhode Island, but there are similar efforts underway across the country. Additionally, there is an effort to crack down on the enabling role the big banks are playing for the industry.

Recently the New York Times covered how the nation’s biggest banks, including Bank of America and Wells Fargo have proved to be willing partners allowing the payday lenders to continuously debit accounts, racking up big overdraft fees along the way. In response to this coverage JP Morgan pledged to change its practice. CFO is looking forward to seeing that change, and change in Rhode Island.