The government’s forms aren’t big enough to handle Donald Trump.
In a statement accompanying financial disclosures required of presidential candidates, Trump’s campaign mocked the inadequacy of the federal reporting process for candidates. “This report was not designed for a man of Mr. Trump's massive wealth,” the campaign said in a statement. The forms, you see, include multiple-choice answers in which the largest amount of wealth a candidate can declare is “$50 million or more.” Since Trump claims a net worth of more than $10 billion, his riches bury the government’s measly forms.
Some financial analysts say Trump is vastly exaggerating his wealth, though it’s impossible to know for sure, since his companies are private and aren’t required to disclose financial details. But even if Trump is worth $10 billion, he’s still an underdog when it comes to the cash required to run for president, because at least two other candidates—and maybe more—seem all but certain to outspend him. Probably by a lot.
Jeb Bush and Hillary Clinton both have deep, elaborate fundraising networks that could help each build a war chest of $1 billion or more in total spending by Election Day 2016. That’s par for the course these days: In 2012, Democrats raised $1.1 billion in support of Barack Obama, while Republicans raised $1.2 billion backing Mitt Romney. Trump certainly excels at getting free publicity, but successful presidential campaigns also require costly staff and research, endless travel, extensive get-out-the-vote efforts and tons of advertising to supplement the free press. Somebody has to pay for all that.
Trump is self-financing his campaing, a la Ross Perot in 1992. He has loaned the campaign $1.8 million so far, and spent about $1.5 million. Trump can certainly keep his campaign going at those levels for a while. But Bush and Clinton have been building donor networks for years, and raising money outright since 2014. Other candidates, such as Ted Cruz and Marco Rubio, have lured rich donors who have at least as much cash as Trump. And heavy hitters still sitting on the sidelines—notably, Sheldon Adelson and the Koch brothers, Charles and David—are many times richer than Trump and willing to spend lavishly to send a Republican to the White House (most likely somebody other than Trump).
Trump does solicit donations on his website, which has pulled in nearly $100,000 so far. But donations to campaigns are limited to a maximum of $5,400. The real money these days flows to so-called super PACs able to collect unlimited sums from rich donors. Jeb Bush’s campaign, for instance, raised about $11 million during the first half of 2015. But a super PAC affiliated with Bush, called Right to Rise, raised $103 million, or more than 9 times as much as the campaign. Super PACs supporting Democrat Hillary Clinton haven’t disclosed their fundraising yet, but those numbers are likely to hit 8 figures.
A Trump super PAC called Make America Great Again recently got started, but it won’t have to report its fundraising totals until January, since it didn’t raise any money in the first half of 2015. Trump’s campaign could release numbers sooner, but probably won’t unless they’re impressive. In any event, Trump’s controversial statements on Mexicans and other issues have already ruptured some of his business relationships, suggesting other rich businesspeople will be reluctant to donate to him, even if they agree with his positions.
Meanwhile, Trump conveys the impression he’ll spend as much as necessary out of his own pocket--but that may not amount to nearly as much as Trump wants people to think. Even if his net worth is $10 billion, most of that is tied up in real estate, which is not a liquid asset. Trump could borrow against real assets, but taking on new debt could weaken the financial position of his businesses. Plus, Trump could be worth far less than he claims, once debt and other liabilities are accounted for. Forbes pegs his net worth at $4.1 billion.
One can only guess how much of his own money Trump is willing to spend on a quixotic political campaign, but $100 million would be a lot. Perot spent $64 million of his own money running in 1992, which would be about $108 million today. The amount Trump spends will largely be dictated by how long he stays in the race and how competitive he wants to be. Early fundraising is important, but the real spending occurs if the state-by-state primary elections (which will take place next spring and summer) drag on as they did during the Democratic campaign in 2008 between Barack Obama and Hillary Clinton.
If Trump doesn’t win the Republican primary, he’ll save all the extra money it takes to compete in the fall general election—unless he decides to run as a third-party independent, as Perot did. Trump can clearly coast for a while, but if he’s still in the race this time next year, his accountant might be getting pretty nervous.
Editors' note: This story has been updated to include newly available details on Trump's fundraising, the amount he has loaned to his own campaign and his plan to self-finance the campaign.
Rick Newman’s latest book is Liberty for All: A Manifesto for Reclaiming Financial and Political Freedom. Follow him on Twitter: @rickjnewman.