The donation dilemma – does Labour have enough money to run the 2015 election campaign that’s needed

Yesterday’s Electoral Commission figures brought home some harsh truths for Labour on donors, donations and party funding. Predictably much of the media focus was spent on the old favourite – what percentage of money comes from the unions. But there’s a more serious concern. At the moment Labour just isn’t bringing in enough money, perhaps not even enough to run the kind of election campaign that’s needed to make the huge gains we need to win in 2015.

Worrying stuff. The HQ restructure may make money go further, but that still doesn’t solve the problem. Labour’s new Commercial director John McCaffrey needs to start increasing the rate of donations (and other funds), and fast. Here’s where he should focus his time:

• Big Donors – Often party members are squeamish about “big money” in the Labour Party. That’s understandable – and there’s also a credible link between influence and large donations to political parties. But as long as the current system of party donations is in place – and there’s nothing to suggest that any of the three big parties are willing to compromise yet – Labour can only play by the rules of the game. And that means seeking out high net worth individuals who are willing to help bankroll the party. The problem is, the biggest donors from the New Labour years have largely vanished, and their potential replacements are yet to materialise. McCaffrey is going to have to decide whether to focus first on winning back donors, or wooing new ones. The latter will probably take precedence – it’s Ed Miliband who will need to get the old gang back together, if he’s willing/able to.

• Commercial – The Tory Party have a proper shop, selling a variety of (naff and awful) merchandise. The last time I checked the Labour online shop sold some out of date mugs. Labour people will buy Labour msrchandise – a funding stream that has been woefully overlooked.

• Small donations – since the 2010 Obama campaign, small donations – particularly those raised online – have been seen either as the holy grail of fundraising or an unachieveable ideal. The party has talked a good game on them, but then behaved in a way that suggests they don’t really buy it. Email fundraising needs to appeal to the reader, and get them to buy into what they are being asked to support. Currently, Labour’s emails don’t really do that. They also need to work on regular small donations to create a regular funding stream, rather than relying on one off donations – unless they are hypothecated donations for a specific, identifiable, donor friendly purpose.

This isn’t a comprehensive set of ideas for filling the funding gap – by any means – but all should form part of the revamp of Labour’s finances that is neccessary in the coming months – or by 2015 it could be too late.

Over to you John.