WASHINGTON -- As one major fund-raising route closes, political parties are fast developing another with great potential to raise lots of money at little cost: the Internet.

A new congressional ban on unlimited "soft money" donations to the political parties, which takes effect after the fall election, will make it more important for campaign fund-raisers to collect large numbers of smaller checks.

Direct mail and telephone solicitations are the traditional tools that Republicans and Democrats have relied on to solicit money in large-scale drives. But some candidates in 2000, such as Sen. John McCain, R-Ariz., used the Internet to raise money quickly.

Now the parties are trying to make better use of Web sites and e-mail to reach far more potential donors at far less expense -- and engage supporters in grass-roots campaigning at the same time.

"As direct marketers, as old-economy companies move more toward using the Internet to bring buyers into their world, so too will the political parties and so too will the Republican Party," Republican National Committee spokesman Kevin Sheridan said.

Changes to Web site

The RNC planned to announce new grass-roots features today on its Web site.

Democratic National Committee Chairman Terry McAuliffe said the ability to electronically tailor messages to potential donors' personal interests and issues is key.

"When you first come into our Web site, you have to fill out a survey: 'Here are the five, six key issues I care about.' Then we have a communication with you about what you want to talk about," he said.

"Then you of course always ask for an appeal. Like people who have signed up and communicated with us -- they will get appeals from us on a regular basis asking them to support us."

E-mail lists

The DNC site has a "tell a friend" feature that lets supporters provide the e-mail addresses of six friends.

The Web sites let donors use credit cards to make contributions, much like making a purchase online. But the parties are in the relatively early stages.

The DNC, for example, is replacing its antiquated computers with a state-of-the-art system that will let it develop sophisticated donor lists.

The RNC's Sheridan said Internet contributions accounted for only a small share of the $22 million raised in January and February. Direct mail and phone banks take in far more.

"Quite frankly our donor base is an older donor base," he said. "They'll get more Internet savvy over time, but right now it's not the case."

The Internet also allows the parties to encourage mass e-mailing campaigns to the other side on key issues. That doesn't always ensure the message will get there, however.

The DNC recently started an e-mail campaign against Republican President Bush's proposed budget, urging Democrats to e-mail a form letter to the White House. The White House blocked hundreds of the e-mails from getting through, a Democratic official said.

The White House has an "anti-spam" system that cuts off e-mails coming from the same address after a certain number are received, in case they contain a virus or could overload the system, spokeswoman Anne Womack said.

Organizations can alert the White House to the campaign and it can take steps to let the e-mails come through, she said.

The Web's political possibilities have attracted the attention of the Federal Election Commission, which must decide what Internet activities are covered by campaign law.

FEC Chairman David Mason said some aspects of political activity clearly fall under the commission's authority, such as raising money. But people sending political e-mails and engaging in other activity from their home computers shouldn't be regulated, he said.

"Between those two poles are a lot of room," said Mason, a Republican. "The FEC is trying to decide how much ground do we declare that we're absolutely not going to touch."

The technology allows political parties to use marketing-style methods to track their supporters' behavior and preferences and better tailor future messages to them.

Max Fose, a consultant who helped McCain raise $1 million on the Internet over 48 hours in 2000, said the parties will have to be sensitive to privacy issues.

It would kill a fund-raising or other online program if they released people's e-mail addresses to other groups, he said.

Overuse is also a risk, said Becky Donatelli, a Republican e-fund raising consultant.

Parties must give people what they want and communicate their message "without giving them so much that they stop listening," she said.

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On the Net:

Federal Election Commission: http://www.fec.gov/

Republican National Committee: http://www.rnc.org/

Democratic National Committee: http://www.dnc.org/