Comparing Burn Rates

In fund-raising, a measure arguably more important than any other is “burn rate”. Burn rate is the percentage of the total money a candidate brings that they send right back out the door. Higher burn rates, especially in the early phases of a campaign, can be fatal. We’re still months away from the point in which the most expensive aspects of the primaries – heavy television and direct mail buys – begin.

According to the recent reports here is the burn rate ranking among all the candidates that have raised the competitive sum of $10 million or more:

1. Clinton – 35.3%
2. Obama – 39.6%
3. Edwards – 44.6%
4. Richardson 47.1%
5. Dodd – 53.4%
6. Giuliani – 54.1%
7. Romney – 72.7%
8. McCain – 90.5%

Besides the glaringly obvious fact that all the Democratic contenders have a dramatically better burn rate than all the Republican contenders, this measure is also interesting because it generally reflects the conventional wisdom of where the candidates stand in the race.

But most interesting and underreported of all- the gap between Giuliani and the rest of the Republicans is amazing. Giuliani looks like a miser compared to the drunken spending of the “fiscally conservative” Mitt Romney and John McCain. Rudy’s self-control took him from an almost $9 million deficit to Romney in Total Raised to a $6 million advantage in Cash On Hand, and it allowed him to extend his advantage over McCain from $9 million to $15 million.

It’s a split decision between Clinton and Obama on the Democratic side. If Obama can continue to expand his fundraising success and demonstrate some spending restraint through September he can gain the advantage. And Rudy’s the clear winner in the financial war on the Republican side for now. However, Romney may just be content to pluck down 7 or 8 figure checks on a periodic basis from not until next year this time, if not, Fred Thompson’s willingness to work a lot of hours on the phone may be the only question mark in the way of Giuliani holding down this important advantage.