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* Obama campaign substantially broadens donor base
* Romney campaign still has more cash on hand
* Republican now free to spend money blocked in primary
* Overall, Obama and Democrats ahead in fundraising totals
By Jeff Mason and Sam Youngman
WASHINGTON/BOSTON, Sept 10 (Reuters) - U.S. President Barack Obama's campaign and Democratic allies raised more than $114 million in August, narrowly beating Republican rival Mitt Romney for the first time in months as the race for the White House approaches its final stretch.
Former Massachusetts Governor Romney and fellow Republicans said on Monday they raised more than $111 million in August, continuing a string of high-dollar hauls that leave him well-equipped to contest the Nov. 6 election.
While Obama shattered fundraising records in 2008 after becoming the first presidential candidate to opt out of a federal matching funds system, Romney has outpaced him significantly on the fundraising front since April.
That has added to a cash advantage on the Republican side offered by the success of outside "Super PAC" groups that have spent lavishly in support of the Republican candidate with unlimited funds from millionaire donors.
In July, the Obama campaign raised $75 million to Romney's $101 million. That discrepancy shifted in August, which marked the first month when Obama's campaign, together with the Democratic National Committee and affiliated groups, broke the $100 million threshold this year.
Overall, too, Obama remains ahead in the race for cash. The president and the Democratic party have raised a total of just under $740 million this campaign season, compared with roughly $630 million raised so far by Romney for his campaign and the Republican party, according to news releases and disclosures.
The Democratic incumbent broadened his donor base last month with more than 317,000 donors who had never given money before, Obama campaign manager Jim Messina said in a statement. More than 1.1 million donors in total gave to the Obama cause in August and the average donation was $58, the campaign said.
"The key to fighting back against the special interests writing limitless checks to support Mitt Romney is growing our donor base, and we did substantially in the month of August," Messina said. "That is a critical down payment on the organization we are building across the country - the largest grassroots campaign in history."
Obama is counting on that grassroots "ground game" to help make up for the cash advantage enjoyed by Romney, whose campaign along with the Republican National Committee and state Republican parties reported on Monday having about $168.5 million in cash left at their disposal at the end of last month.
Obama's campaign did not say how much cash it had on hand at the end of August, but in July, Romney and the Republicans enjoyed a $60 million cash-on-hand advantage over Obama and the Democrats, who ended July with $127 million left in the bank.
But the president's campaign has burned through money faster than the Republican candidate, spending $58.5 million in July, with about two-thirds of that going to advertising.
Republicans view the combination of Obama's high cash burn rate and polls that show a tight race as evidence they have withstood the advertising onslaught Obama's campaign launched early in the year as Romney battled other Republicans for the party's nomination.
"This race is a dead heat, even after they have spent over $100 million attacking Mitt Romney with negative ads," one senior Romney adviser said on Sunday.
Obama's advisers say they are confident they spent their campaign cash well by seeking to pinpoint Romney's weaknesses over the summer months.
But the discrepancy in funds available for advertising in the homestretch is a concern, especially now that Romney is also free to spend the millions of dollars he raised during his primary campaign, but legally could not spend before he formally accepted his party's nomination on Aug. 30.
The Romney campaign demonstrated it was ready to begin spending that cash late last week, the day after Obama himself was officially nominated for re-election as president.
Republicans seized on a disappointing jobs report on Friday morning, announcing they bought ad time in the key swing states Obama won in 2008, but which are now in play. On the air in the key states of Iowa, Virginia, Colorado, Florida, Nevada, New Hampshire, Ohio and North Carolina, Romney was set to expand his advertising to Wisconsin on Monday.
"What we very deliberately did, we held our powder and we knew these jobs numbers were going to be a big moment," said one Romney adviser. "And we loaded up to come back on Friday, and we've gone up in a big way."
While Romney spent much of the summer fundraising, senior adviser Kevin Madden indicated the Republican candidate would shift his focus to spending more time with voters.
"We'll continue to do some fundraising throughout this month, but I think we're in that critical phase where we're trying to put our emphasis on voter contact and having the governor do more retail campaigning," Madden said.
Obama's team believes the president has an advantage at retail campaigning. He just finished a two-day bus trip of Florida, which included chats with voters at local restaurants and bars throughout the state.
Still, the Obama campaign sees Romney as having the financial advantage and it urged supporters not to become complacent after the successful August figure.
"No celebrating, because they're going to have an even bigger September," Obama's campaign said via Twitter. "But now we know we can match them, doing this our way."