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Chairman’s ReportRon Nehring

Chairman, California Republican Party

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What can the CRP’s leadership directly control?

External Factors• Nomination of candidates• Candidate campaigns• Candidate messaging• Legislation

Internal Factors• Finances• Management• Personnel• Programs

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What We Accomplished Together:FINANCES

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CRP: Out of DebtEnd of cycle financial position, 2006 vs. 2008 vs. 2010

Dec. 2006 Dec. 2008 Dec. 2010

$(4,147,772.68)

$484,160.18 $427,297.38

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California Republican Party: $73.8 million raised by the team

Thank you to the entire finance team 2007 - 2011:

• Finance Chairmen Francis, Tellefsen, Krvaric, Miller• Team Cal Chairmen Russo, Lyons• Assembly Leaders Plescia, Villines, Blakeslee, Garrick, Conway• Senate Leaders Ackerman, Hollingsworth, Dutton• Finance Director Molly Parnell and her team• Executive Director Brent Lowder

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New Financial Controls and Practices.

Spending against Available Funds, not Cash on Hand. Purchase orders. Expenditures approved internally only after ED

approved a purchase order. Checks against available funds and budget.

Vendors mandated to provide final invoices by Nov 20. Dual signatures on all party accounts. Complete revision of personnel manual, practices, reducing

costs. Rapid downsizing of staff following election. Sustainable

trajectory. Funding the reserve ongoing, not at the end.

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Candidate Campaigns• Startup.• Responsible for electing

ONE candidate.• Candidate is in charge.• Terminates on Election Day.

Party Committees• Ongoing entities.• Responsible for supporting

multiple candidates.• Democracy.• Still has bills to pay in

December, etc.

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What We Accomplished Together:PROGRAMS

Networks: Coalition Building

26 Coalition-specific Networks

23,595 Members

Retained Fiorina + Whitman Voter

Network Tags

www.CRPNetworks.org & www.CRPWomen.org

Networks

74 370

3,794611

463

916

41

7,177462

21

430

399

345

600

2,891 37

Coalition ID Flags

African American Coalition Agriculture CoalitionAsian American Coalition Business CoalitionEducators Coalition GenM CoalitionHealthcare Coalition Jewish CoalitionLatinos Coalition Local Elected Official CoalitionNational Elected Official Coali-tion

Nurses Coalition

Public Safety Coalition Seniors CoalitionVeterans Coalition Youth CoalitionLeadership Coalition

• 760+ candidates, staff and activists trained.• 10 campaign schools

Grassroots Organization, Technology and Social Media, Message, Volunteer Recruitment, Voter Contact and Fundraising

• Two Campaign Management CollegesSacramento: August 14 – 15Orange County: August 28 – 29

1988 1990 1992 1994 1996 1998 2000 2002 2004 2006 2008 20100

1,000,000

2,000,000

3,000,000

4,000,000

5,000,000

6,000,000

7,000,000

8,000,000

9,000,000

7,052,3866,671,747

7,410,914 7,219,635 7,387,5046,989,006 7,134,601

6,825,4007,120,425

6,727,908

7,683,495 7,620,240

5,406,127 5,290,2025,593,555 5,472,391 5,704,536

5,314,912 5,485,492 5,388,8955,745,518

5,436,314 5,428,052 5,361,875

1,546,378 1,516,0782,097,004 2,031,758

2,570,035 2,665,2673,087,214 3,089,174 3,236,059

3,672,8864,192,544 4,303,768

Voter Registration 1988-2010

DEM REP OTHER

Voter Registration

327,426+ New Republicans

Registered in California in 2010

31 GOP Counties27 DEM Counties

4 of 7 largest are DEM

CRP Direct w/ Local Control15 County Committees participated33 Vendors contracted at local level8 Vendors contracted at state level

Independent Expenditure

$3.62 million$12.12 average per registration

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Series10.0%

10.0%

20.0%

30.0%

40.0%

50.0%

60.0%

70.0%

65.7%

60.1%48.7%

61.1%

Turnout by Party Affiliation

REPDEMDTSOTHER

Voter Turnout: Statewide Precinct Operations & Contact

3,396,636Grassroots Voter Contacts

2,926,666 Phone Calls469,970 Door Knocks

42 Counties Activated900 Candidates Endorsed

675 for Local Office60% Local Win Rate

530,000 Walk Pieces Delivered59 County Customized Versions5,000+ Precinct Rep. Database

2 Statewide Precinct Walks

18.9 million mail pieces1.5 million target voters

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PREVENTING “GROUNDHOG DAY”

Groundhog Day

• Risk: Beginning the next cycle with weakness:– Financially crippled.– Lack of accumulated assets from 2010– Dissipation of accumulated knowledge

• This happens to state parties over and over again.

State Party• Ongoing entity. The party cannot shut down on Election Day.

It needs to function, has bills to pay.• Responsible for supporting multiple candidates. Tendency for

statewide candidates to expect party to be only about them, to the exclusion of Congressional, state legislative, local candidates.

• Democracy. Political parties are not dictatorships, like candidate campaigns. Rules, process are important.

• Still has bills to pay in December. Much tougher to raise money after Election Day, yet party will have financial needs

We know…• Fundraising, particularly major donor fundraising, will slow to

a crawl or stop altogether following Election Day.• In many cases, win or lose, the candidates are not going to be

interested in, or capable of, raising money for the state party after the election.

• Assets will fly away without a conscious effort to retain them.• The party will be called upon to support candidates in 2012.• Debt generates bad press, making fundraising even more

difficult.

Advice for Future CRP Leaders

Rule #1: You are the leaders at the table whose first responsibility is to the state party.

• Everyone else has a different first priority.– Elected officials– Candidates– County chairs– Donors– Volunteer groups

Advice for Future CRP Leaders

Rule #2: The Chairman must be responsible for approving state party expenditures.

Accomplished

Advice for Future CRP Leaders

Rule #3: The state party staff must be accountable to the chairman.

• Everybody needs a boss. • Management by committee does not work.• Nothing with two heads lives.

Advice for Future CRP Leaders

Rule #4: Recognize the state party has responsibilities that go beyond this year’s candidates and elected officials.• The party has bills to pay in December, and you’re

responsible for them.• Fundraising dries up after the election.• Debt is crippling. Real-time debt, future debt resulting from

no reserve.

Advice for Future CRP Leaders

Rule #5: Do not run the Republican Party the way Democrats run government.

• Map out the budget for 2013 before Election Day 2012.• Do not set unrealistic fundraising expectations post-Election.• Do not end in debt.• Establish and fund a cash reserve to carry through post-

election dry season.

Advice for Future CRP Leaders

Rule #6: Consider every party activity to be an infrastructure-building exercise.

• Fundraising. Build your list. Build your sustained giving programs. Enroll donors into donors clubs, anticipate renewals.

• Political programs. Add tags to your voter file. Build volunteer lists. Mail and doorhangers should include reply devices. Archive all polling, research, plans.

• Communications. Continually improve the media list. Expand the contact lists.

• Administration. Retain computers, phones, hard assets.

Start Finish

Start

Finish

The next three cycles can look like this…

…or this…

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What We Have Left to Do

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What we have left to do:PERMANENTLY PROHIBIT MASSIVE LOANS/DEBT

Amendment to 3.03(B)1: (1) Any proposed contract, transaction or other obligation which exceeds $100,000 in amount shall be subject to the prior express approval of the Board of Directors. (2) The Board of Directors is specifically prohibited from recognizing, authorizing or re-authorizing any loan or obligation, of any amount, entered into but not repaid during the previous term of the Board of Directors. This provision shall not apply to a mortgage taken for the purchase of a building or similar facility. (3) Any proposed contract, transaction or other obligation the performance of which extends beyond the term of office of the Chairman or Board of Directors shall be subject to the express prior approval of the Committee or the Executive Committee by a majority vote of the voting delegates present. However, the Committee and the Executive Committee are specifically prohibited from accepting any loan or other form of debt under this section.

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What we have left to do:REQUIRE THE FUNDING OF A CASH RESERVE TO FUND THE PARTY AFTER ELECTION DAY

(2) The budget shall provide for a transition fund sufficient to fund all operations of the committee from November 1 of the even-numbered year to March 1 of the following year to be spent after the end of the preceding fiscal year and before the adoption of the next biennial budget. The full amount of the transition fund shall be set aside and sequestered by October 1 of the even-numbered year. No expenditure of committee funds of any kind, from any account, shall be permitted after October 1 of the even-numbered year unless the transition fund has sufficient funds A MINIMUM OF $500,000 deposited within it as outlined by this section. This section may be waived only upon a 2/3rds recorded roll call vote of the Board of Directors.

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What we have left to do:ALLOW THE CRP TO CONDUCT INDEPENDENT EXPENDITURES, JUST LIKE OTHER GROUPS

Add new 2.06.02 (K) Independent Expenditures Committee. The Independent Expenditures Committee shall develop and implement plans to conduct independent expenditures in support of federal and state candidates endorsed by the Committee or in opposition to candidates opposed by the Committee. The Independent Expenditures Committee shall be composed of persons appointed by the Chairman who could legally participate in independent expenditure decisionmaking for the Committee in compliance with applicable federal and state laws governing such activities. The Federal and State Independent Expenditures Committee shall develop a budget for such activities, which budget shall be incorporated in the budget process of the Committee. The Chairman of the Committee shall report to the Chairman of the Committee and designated members of the Board of Directors who meet the same legal criteria for participation in decisionmaking of the Independent Expenditures Committee.

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Final Thoughts

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Thank You!