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ActBlue doesn’t shut down after the election. We keep working to bring more and more people into the political fundraising process year in and year out. We get that a lot of our work is invisible during down times, but it pays off when the political cycle heats up.

February is a short month and it doesn’t bump up against an end of quarter deadline. Last year was bigger than expected because of the initial fundraising reaction to Gov. Scott Walker’s (R-WI) union-busting effort. But our slow-and-steady work has led to a February 2012 total more than twice the size of 2011, with nearly three times as many committees receiving money. That’s the sort of big, broad base that we’re trying to build, and we’re thrilled to see it working.

Number of contributions 110,354
Total raised $5,087,728.20
Average Contribution size $46.10
Committees receiving money 1,340

 

February in context:

Feb 2008 Feb 2011 Feb 2012 Change
Contributions 17,7538 34,496 110,354 220%
Volume ($) $1,879,868.94 $2,228,051.55 $5,087,728.20 128%
Mean Donation $107.19 $64.59 $46.10 -29%
Committees 600 561 1,340 140%

 

Here are the five top committees, by number of donors, for February 2012.

Name Race Donors Dollars
DCCC Party Committee 28,942 $763,847
Democratic Party of Wisconsin Party Committee 9,288 $166,872
Democracy for America Organization 7,688 $156,479
Elizabeth Warren MA-Sen 6,559 $344,854
PCCC Organization 6,237 $51,762

Here’s a rule about political fundraising: January is dead. People are feeling the pinch of their Christmas shopping, it’s cold, and the political cycle doesn’t really heat up for the non-primary-having party until later in the year. All in all, not a great time.

Not this January. This January was bananas. ActBlue sent over $4 million to Democratic candidates and committees this month, a nearly four-fold increase over January 2008. If you recall, in 2008 there was this little, kind of boring contest called the Democratic Presidential Nomination Fight–Hillary Clinton, Barack Obama, and so on. Still, 2012 is clocking in well ahead of those numbers, as you’ll see below:

Number of contributions 87,408
Total raised $4,021,352.93
Average Contribution size $46.01
Committees receiving money 1,207

 

You can’t really get a sense of how big January was until you see how it stacks up relative to 2011 and 2008:

Jan 2008 Jan 2011 Jan 2012 Change
Contributions 11,835 10,120 87,408(!) 764%
Volume ($) $1,358,105.87 $636,711.13 $4,021,352.93 532%
Mean Donation $114.75 $62.92 $46.01 -27%
Committees 535 460 1,207 162%

 

Here are the five top committees, by number of donors, for January 2012.

Name Race Donors Dollars
Elizabeth Warren MA-Sen 13,827 $658,329
DCCC Party Committee 11,906 $332,746
Democracy for America Organization 10,555 $187,149
Democratic Party of WI Party Committee 7,400 $152,406
CREDO SuperPAC SuperPAC 5,845 $133,896

 

There are a couple of big surprises in the data–the DCCC and the CREDO SuperPac make the leaderboard for the first time and buck expectations by raising hundreds of thousands of dollars with an average donation size under $30. We believe small donors and disclosure are the key to a healthy political system and it looks like folks are coming around.

We have another milestone to celebrate around the office: 2 million donations! And we got there only a year and a half after we hit 1 million. Averaged out over that period, we're talking 55,000 donations a month during some of slowest months of the election cycle.

Here's why it matters: our infrastructure is what turns grassroots passion into political results. While the "enthusiasm gap" was making headlines across the country, Democratic donors flocked to ActBlue to connect with their chosen candidates. Our infrastructure enabled the Wisconsin Recall efforts to demonstrate their fundraising oomph in real time, and helped labor issues find their way back into national discourse. Today that conversation is in a dramatically different place than it was a few months ago.

But 2012 is where the rubber meets the road. It's our transparent, participatory architecture against the small and increasingly shadowy world of Republican fundraising unleashed by Citizen's United.

2 million grassroots donations or five guys writing blank checks: which system would you rather have?

Sam Stein of the Huffington Post has a well-reported item up on mobile giving and campaigns. The takeaway is that everyone knows mobile giving is the next big thing but the actual "how" of the process as it relates to political donations is still unclear. As I've mentioned before, what we're dealing with is fundamentally an infrastructure problem. Amazon's one-click model works for two reasons: you can buy almost anything on Amazon and people are now broadly comfortable with the idea of purchasing things on the internet (in no small part due to Amazon's work in that area).

In the political world, neither of those conditions hold. For starters, the environment is far more fractured, with most candidates pursuing a la carte solutions. If you take a random sample of 25 campaigns, you'll find ten different vendors are responsible for processing donations, each with a particular set of technical constraints that means they can't play nice with one another. That means that each campaign would have to set up their own mobile donation platform, which in turn would require donors to create a mobile profile for each and every candidate they want to give to. Surprisingly, most people aren't up for that. 

Second, online political donations are a fairly new phenomenon and people's comfort zones are still adjusting. A few years ago, an online fundraising program was an optional part of your campaign plan. Today, it's essential. That change happened very fast, and it's why we regularly receive calls from folks who want to give to a candidate but aren't comfortable doing so over the internet. That's not unusual in circumstances like these. In 1998, Newsweek ran an editorial questioning whether anyone would ever buy books–much less other things–using internet retailers like Amazon. Today, the questions are somewhat different: will Amazon kill off book publishers, for example.

The reason ActBlue Express has succeeded relative to many other approaches to mobile giving is that we provide the same clearinghouse advantages that Amazon enjoys. You can create a single profile and give to every Democrat listed on our site (which is to say: almost every Democrat). Instead of campaigns pursuing endlessly duplicative infrastructure and trying to lure donors to this website or that website, they can come to a single place and connect with a pre-existing community of users. Crucially, the fact that these users have ActBlue Express accounts means they're donors and they have a pretty high level of engagement with politics. 

The fact that we've been around for a while and people know and trust us doesn't hurt either.

But the single greatest advantage we enjoy in here is the fact that we're a political committee, not a business. That means we can innovate in ways that for-profit vendors can't match. Simply put, they have to look after their bottom line. Because margins in this business are thin, if something isn't going to be immediately profitable it tends to land on the back burner. At ActBlue, we're able to get out in front of things like mobile giving because we're not as constrained in that regard. Our constituency of interest is our userbase, not our shareholders. If we can provide value to our users, that's the metric we're interested in.

ActBlue Express is simply one expression of that core tenet. 

The third quarter of this year was an odd duck, because it mixed the massive off-year fundraising of the Wisconsin Recalls with the start of federal campaign season as seen in the kickoff of the Elizabeth Warren campaign. Those two events brought a huge influx of grassroots donors to ActBlue, driving down our average contribution size to around $50. It’s shaping up to be another big cycle for grassroots fundraising.

Number of contributions 199,585
Total raised $10,229,392.76
Average Contribution size $51.25
Committees receiving money 1,388

 

Here’s how those numbers stack up relative to 2009, and to the same point in the last presidential election cycle (2007). Change is calculated with 2009 as the baseline.

Q3 2007 Q3 2009 Q3 2011 Change
Contributions 36,938 105,266 199,585 47%
Volume ($) $4,793,375.78 $9,368,191.06 $10,229,392.76 9%
Mean Donation $129.87 $89.00 $51.25 -42%
Committees 625 1,160 1,388 19%

 

Here are the five top committees, by number of donors, for Q3 2011.

Name Race Donors Dollars
PCCC Organization 41,715 $418,964
Democracy for America (WI Recall) Organization 38,694 $440,989
PCCC Wisconsin Recall Organization 37,951 $356,104
Democracy for America Organization 34,961 $385,044
Elizabeth Warren MA-Sen 27,756 $943,366

A few weeks ago, Nick Confessore of the New York Times wrote a piece about the reluctance of small donors to return to the Obama fold. Shira Toeplitz of Roll Call recently examined the slowdown in traditional fundraising: major bundlers and PACs. For Confessore, the fact that President Obama has to work harder for small donors stems from his sagging popularity. For Toeplitz, it's a sign of the down economy that the deep-pocketed can't dole out the sort of financial largesse they used to.

Both of these theses have some real problems.

Confessore runs into the problem that conventional methods of reportage are a terrible fit for assessing as broad a category as grassroots donors. Dozens of interviews are a poor way to figure out what's going on in a population that numbers in the millions. Some people are undoubtedly disappointed in President Obama, but many more may not have tuned into the process yet. In 2007, Democrats were where Republicans are today: focused on a contested primary process to replace a President that was wildly unpopular with their base. It's no surprise that it's harder to engage the Democratic grassroots now; whether that will remain the case is anybody's guess. Finally, it's not as if the President has some special claim to these donors–they're a political constituency like any other. Even if there were reason to accept Confessore's thesis without question, we should be celebrating the fact that political actors have to work for their support, rather than ignoring it as irrelevant or taking it for granted. Today, there are lines of accountability and financial interdependence between legislators and grassroots donors that didn't exist ten years ago, and that's a good thing.

The Toeplitz piece is a bit harder to find bright spots in, as it takes the same basic error and adds a laundry-list of excuses for a poor fundraising quarter. Hurricane Irene, the debt ceiling melee, the (crippling!) impact of the economy on our nation's wealthiest donors, and even the Jewish New Year all come in for blame for the lower-than-average haul, as if that were the important aspect of those events.

I bring these articles up because ActBlue has access to a pretty good cross-section of small donor activity. Every day, we process contributions to state and federal candidates from across the country. That immunizes us to some extent from the problems these articles run in to. In the spirit of lending a little clarity to the debate, here are our numbers from Q3 2009, and Q3 2011:

'09: $9,368,191 from 105,266 donors to 1,160 committees. 

'11: $10,230,421 from 199,595 donors to 1,388 committees. 

Hardly the declines we'd expect to see if Confessore and Toeplitz are right. Grassroots donors are more engaged in the fundraising process than ever before. Even if the sources Toeplitz quotes are right, it may not be the case that fundraising has declined, rather that its character and the methods used to go it are changing and the political sector is lagging a bit in recognizing that trend. As political fundraising becomes increasingly digital and grassroots, the value of traditional methods may lose a little of their centrality. (They'll still be important!) That's not a bad thing–it will create a political system that's more dynamic and has fewer barriers to entry. There will be more voices and more choices for voters to listen to and weigh, and that's the essence of representative democracy. 

In July, the Progressive Change Campaign Committee (PCCC) asked ActBlue to set up a draft fund for Elizabeth Warren. By mid-August the PCCC had shattered all records for the largest and fastest growing draft fund in our history, raising over $102,000 from around 7,000 supporters even before Elizabeth Warren formed an exploratory committee for a Massachusetts Senate run.

Today, their unprecedented success is the reason we're sending her committee a six-figure check.

The PCCC's landmark efforts are not only impressive, they tell us something important about the way politics is changing in response to the digital age. In 2009, the PCCC was a brand new organization. Today, the PCCC has a played a central role in a number of key battles over the last two years — from the fight for the public option and the push to keep Keith Olbermann on the air, to this year's Wisconsin recall elections and the Draft Warren fund. With the help of a large and active donor community, the PCCC has raised millions even though their average donation size is just under $15. In short, they've become a major political player at a speed and donation size that would've been unthinkable five years ago.

Much the same can be said of ActBlue. Seven years after our founding in 2004, we've become the single largest source of political funds in the United States. Our mission was (and is) to give voice to the voiceless, and bring attention to those donors and communities that are often ignored or overlooked. We call it "Democratizing Power," and this is how it works:

ActBlue raises up small donors, who raise up the PCCC, which raises up Elizabeth Warren. 

It's an organic, bottom-up process that's based on shifting the incentives that politicians face in a direction that's a win for everybody involved and the political system at large. By using ActBlue, the PCCC can demonstrate to everyone who cares to look that they can have a major impact on campaigns, and their donors can see exactly how powerful they are when they work together. Politicians learn that grassroots donors can be counted on to produce major results when it matters. And over time we get a political system that's responsive to the needs of folks who contribute $25, not just those who can afford $2500 donations.

Our architecture and their work–which has already raised another $7,000+ for Warren–improves your government. It's a good thing, man.

Restore Our Future, a so-called super PAC formed to support the presidential bid of Mitt Romney, recently reported receiving a one million dollar contribution from a company, which has caused a stir. It’s not the size of the contribution that caught everyone’s attention since super PACs can legally accept unlimited contributions even from corporate contributors as a result 2010 court decisions. Rather, campaign finance reformers are crying foul based on the lack of disclosure of exactly who was behind the contribution. They’re just crying to the wrong agency.

W Spann, LLC, the company that made the contribution, was formed in Delaware in March and then dissolved in July. A Boston lawyer specializing in wealth management handled the paperwork, but otherwise the person(s) responsible for the company — and the resulting contribution — is entirely unknown. A consensus has emerged that W Spann probably violated the law because making the contribution caused it to become a political committee, and W Spann failed to register with or report to the FEC. Even opponents of campaign finance laws agree that this is the case. In response, reformers have called on the FEC to investigate.

But the FEC will do nothing. There are a number of reasons for this, perhaps principally among them the fact that the FEC has been largely unable to act in its current configuration of commissioners. Even if the FEC were to act, however, it’s not clear that the consensus presents a sound legal argument. A political committee is defined as a group of people who make contributions together; a single person cannot constitute a political committee. If W Spann was established by a single person, therefore, the complaint will fail. And there are additional complications of line-drawing (should any company that makes a contribution be forced to register? if the company made charitable contributions in addition to its political contributions?) that the Republican commissioners will almost certainly balk at, making any action even more unlikely.

The complaint overlooks the real issue in this case: disclosure, not whether the company is a political committee. And there is a better way to force W Spann to disclose who was behind this major contribution. All organizations or companies whose primary purpose is to make political contributions are required to report those contributions and the original source of the funds to the IRS. Everyone has to register with the IRS, and line drawing is the essence of the IRS’s day-to-day operations, so they are much more likley to exercise jursdiction over W Spann than is the FEC.

If it is the case that the primary purpose of this shell corporation was to make this contribution, regarless of how many people were behind it, then W Spann broke the law by not reporting the source of the contribution to the IRS. Setting a precedent by forcing the disclosure of anonymous donors to the IRS rather than the FEC (which has demonstrated itself to be a poor watchdog) would be just as effective a means of getting large donors to think twice before laundering their millions through shell companies. Unfortunately, instead we’re likely to end up with nothing from the FEC.

In yesterday's Washington Post, T.W. Farnam apparently thought it would be illuminating to compare grassroots donors to addicts. The article is the other half of a classic D.C. lose-lose attack on the grassroots: if you don't give, you're a feckless mass who can't be trusted to come through for candidates, and if you do give you're rubes at mercy of canny political operatives.

Unconsidered in the article is the apparently outlandish possibility that grassroots donors are making their own decisions about who to support–that they aren't just money pinatas to be beaten by enterprising staffers when cash gets low. Crazy, I know. 

Beyond the condescending frame and patronizing tone, the article still has a huge problem: what's the alternative? Over the past two years we've seen a marked erosion of campaign finance law, always to the benefit of monied interests. If grassroots donors don't step up to provide a counterweight to that ever-increasing concentration of power, the end result will be the total capture of our electoral system by those interests. Voters will just be the people who show up on election day to ratify a choice that was made long before ballots were printed.

And that's the real reason why grassroots giving matters: by engaging in the fundraising process, grassroots donors are taking ownership of their political future. To use a well-worn GOP chestnut, they have "skin in the game." Grassroots donors raised over half a million dollars for Kathy Hochul (D-NY) and helped her pull out an unlikely win in NY-26. That kind of participation fulfills the promise of American democracy, and shouldn't be treated like some kind of hideous affliction brought on by the digital age. 

It’s become a recurring theme that, in some states, the laws intended to protect our democracy from the harms of corruption inappropriately get applied to the work we do. Most often, it happens because someone might not be aware of the ways in which ActBlue amplifies the voices of so many of you to make campaign finance—and politics—work for the people, not just the entitled few. We sometimes get lumped in with all of the bad money in politics, and an otherwise well intentioned law prevents us from increasing participation in democracy. It was just such a law that we recently encountered in Rhode Island.

We’ve been helping Democrats get elected in Rhode Island through a couple of cycles now, but that has required making special arrangements with each campaign individually. While we are glad to have been able to help those campaigns who engaged with us, we haven’t been able to help everyone, and the additional administrative burden associated with those arrangements made online engagement clunkier than it should be. That’s why we were excited when, after intensive legal research to try to solve this problem, we discovered that actually the letter of the law in Rhode Island would permit ActBlue to help all Democrats without any kind of arrangement at all, special or otherwise. If the people wanted it, we could do it.

To confirm that our reading of the law was accurate, we requested an opinion from the Board of Elections, working closely with their staff over the course of months. After long hours of consultation with the staff and providing public testimony before the Board (which required finding an attorney to sponsor me for special admission to the Rhode Island Bar!), the Board ultimately voted to maintain the status quo; it was the safe vote, but it failed to address how the law must interact with new modes of fundraising unleashed by the Internet. And in the process, it appears that the Board may have endorsed a reading of the law which eviscerated the limit on individual contributions. They inadvertently permitted individuals to contribute unlimited amounts to campaigns as long as the contributions first go through a series of PACs, much like the loophole in Nevada that recently required new legislation in order to clean up.

But the real harm in this case isn’t yet another major loophole in Rhode Island law. And the real loser in this case isn’t ActBlue. The Board’s well-intentioned, yet ill-advised action hurts the people of Rhode Island most, who are less able to make their voices heard and to participate fully in the selection and election of their representatives in government. It is that much more difficult now for candidates to activate their supporters online, which means a few more candidates will decide to rely on big campaign donors instead. It is that much more difficult now for supporters to organize themselves to let their preferred candidates know that they’re willing to fight, which means a few more first-time candidates will decide not to run. It is that much more difficult now for ActBlue and the people of Rhode Island to make politics work for everyone.

We’ll keep fighting for the people of Rhode Island and of every state in the nation. With your help, we’ll get the word out about how important the work you do with ActBlue is to ensuring we can all participate fully in electing our leaders. And one day we won’t have to worry about well-intentioned mistakes.

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