(CNN) — North Dakota Gov. Doug Burgum is offering $20 gift cards to people who donate at least $1 to his presidential campaign. Entrepreneur Vivek Ramaswamy has promised grassroots fundraisers a 10% cut of the money they bring into his campaign. Other candidates are just pleading for $1 donations or offering campaign swag at a steep discount.
The crowded field of 2024 Republican presidential candidates is under intense pressure to demonstrate they can raise money from a broad slice of Americans, especially ahead of the party’s August 23 debate. To qualify for the debate stage in Milwaukee, candidates must meet both polling thresholds and a fundraising floor: At least 40,000 unique donors, including at least 200 contributions from 20 states.
The demand for cash has prompted some novel fundraising strategies – and raised questions about whether some approaches run afoul of federal campaign finance laws.
“The reality is that raising money takes a lot of money, and it distorts the process when you care more about the number of donors and the geographic distribution than about the amount of money” the campaign receives, said Richard Hasen, an expert on election law at UCLA’s law school.
“I certainly understand the incentive and rationale for trying these alternative methods.”
But Hasen and other campaign-finance experts have raised questions about the legality of the approach advanced by Burgum, a former software executive who is plowing his personal wealth into his long-shot bid for the GOP nomination.
Burgum is offering $20 so-called “Biden economic relief cards” in the form of Visa or Mastercard gift cards to 50,000 donors. One solicitation Tuesday described it as a “better deal than anything you are seeing during Amazon Prime Day.” An online newsletter, FWIW, first reported the Burgum gift-card plan.
The campaign says it’s on pace to hit 20,000 cards in the first 48 hours of the offer.
Burgum campaign spokesman Lance Trover made clear that the fundraising appeals were aimed at securing a spot on the debate stage, while also seeking to take a dig at the current officeholder.
“Doug knows people are hurting because of Bidenflation and giving Biden Economic Relief Gift Cards is a way to help 50,000 people until Doug is elected President to fix this crazy economy for everyone,” Trover said in a statement. “It also allows us to secure a spot on the debate stage while avoiding paying more advertising fees to social media platforms who have owners that are hostile to conservatives.”
Hasen said reimbursing a donor with a gift card could be construed as violating the federal law that prohibits straw donations – the practice of giving money in the name of another person.
“There’s a federal law that says you can’t reimburse someone for their campaign contribution,” he said. “Lots of people get in trouble for that.”
Paul Ryan, a veteran campaign-finance lawyer, agrees and said Burgum’s move also could be viewed as a “scheme to defraud the RNC” because “these aren’t real donors.”
But Saurav Ghosh, director of federal campaign finance reform with the Campaign Legal Center watchdog group, said the federal prohibition on straw donations is aimed at guaranteeing that the public knows the identity of the donors and ensuring that donors don’t exceed contribution limits.
Neither of those issues appear to be a problem with Burgum’s plan, he said. But even if the scheme is legal, Ghosh said it’s still troubling. “It basically bribes people to give a donation and that really manipulates the real purpose of donors, especially small donors, giving to a campaign,” he said.
A Burgum campaign aide said the strategy was reviewed by its legal team and maintains that the gift-cards-for-donation plan is permissible.
Ramaswamy’s approach – offering a 10% commission to grassroots fundraisers – appears to be well within the limits of campaign-finance laws, experts say, because candidates routinely pay such fees to professional fundraisers. Campaign officials say he’s already secured enough campaign donations – roughly 65,000 – to meet the fundraising thresholds for early debates.
Instead, Ramaswamy, another uber-wealthy contender for the GOP nomination, cast his move as an effort to “democratize political fundraising.”
“As a political outsider and first-time candidate, I was stunned to discover the degree to which the political class cashes in on the electoral process,” the biotech entrepreneur said in a statement announcing what he calls “Vivek’s Kitchen Cabinet.” “I found out that most professional political fundraisers get a cut of the money they raise – why should they monopolize political fundraising? They shouldn’t.”
Ramaswamy’s campaign says more than 1,000 people have signed up to fundraise so far.
Ryan, the campaign-finance lawyer, said he sees “no legal red flags” with the Ramaswamy approach.
This does not mark the first time that presidential campaigns have tested the limits of campaign-finance rules with novel schemes to attract donors or attention.
In the 2020 cycle, Democratic presidential contender Andrew Yang announced a plan for an online raffle to give 10 Americans $1,000 a month for an entire year, using campaign funds. The contest was aimed at promoting a central plank of his ultimately unsuccessful presidential campaign: giving every American over 18 a universal basic income of $12,000 a year.
This year, other 2024 GOP candidates are testing other ways of meeting the fundraising threshold for the first debate, as they fund social media ads with fundraising appeals.
For instance, Michigan businessman Perry Johnson, who said he plans to self-fund his campaign, is offering a copy of his book, “Two Cents to Save America” for a $1 donation.
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