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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

On Wednesday, the Washington Post broke the news that the American Action Network, a Republican "charitable organization" along the lines of American Crossroads GPS, was financed entirely by 11 checks, with 82% of its funding coming from just three donors.

AAN and Crossroads GPS are not required to disclose donor information and can protect donors from any blowback that might result from their decision to influence the political process or the specific ways in which AAN/Crossroads GPS employ their money to accomplish that goal. As a result, donors get to have their cake and eat it too: they're largely invisible to the American voter, but highly influential within the small community of policymakers that make legislative decisions. It's an appealing proposition.

There are a number of significant downsides to this arrangement, however. Before I get into them, I'd like to be clear: there's no problem with giving money to political candidates. There's no problem with giving a lot of money to political candidates. There is a problem with giving undisclosed money to political candidates. 

At the most basic level, disclosure is a mental shortcut for voters. It's a way for them to consider the source, to divine what interests believe supporting this candidate is in their interest. If that information isn't available, it undermines democratic accountability. If voters can't get access to any information about who is backing whom, their role in the political process becomes little more than a patina of consent on top of a structure they are prevented from informing themselves about.

So you have a situation in which, over the long term, rational actors are undermining the very system they depend on. Politicians need to finance their campaigns and want to outraise their opponents. Their donors want to insulate themselves from the consequences of their speech. The tragic irony is that in doing so, they are sawing the foundations of a functioning democracy–information and accountability–out from underneath themselves. Left to its own devices, the emerging situation becomes a race to the bottom: who can raise the most money while revealing the least information about its source. It's not hard to see how that worsens what Prof. Larry Lessig calls "institutional corruption," and ultimately paralyzes our government. 

That's why what we do here at ActBlue is so important. Our platform gives small donors a stake in the process and enables them to make themselves felt in major races, while also preserving the transparency that's key to a stable democracy. That transparency, in turn, lets donors assess the impact of their donations in aggregate, which makes them more likely to give again. In short, our virtuous cycle counteracts the vicious cycle kickstarted by Citizens United. 

Recently a couple of stories broke about attempts to bring disclosure back into the political fundraising process. The first was about a draft executive order that will make it harder for federal contractors to use campaign finance vehicles like American Crossroads GPS to support candidates without disclosing that fact. The second article covers DCCC chairman Rep. Chris Van Hollen's (D-MD) suit against the FEC as part of an attempt to get that very same group (Crossroads GPS) to disclose its donors. 

Neither article mentions the larger context:

In 2010, a Republican filibuster doomed the DISCLOSE act in the Senate. The DISCLOSE act was a response to the Supreme Court's decision in Citizens United v FEC, and would've enacted the disclosure requirements explicitly called for by Justice Anthony Kennedy in his majority opinion. Republicans killed the bill because they knew disclosure would limit the amount of money they could raise through vehicles like Crossroads GPS. There are plenty of corporations out there that support Republicans, but not all of them are looking to be Target

With the Senate deadlocked, the FEC seemed like another route for protecting disclosure. Unfortunately, it's also paralyzed. By law, the FEC is composed of 3 Democratic and 3 Republican comissioners. As in the Senate, the Republican members of the FEC are hostile to anything that might increase disclosure and bring transparency into the system. So the FEC remains deadlocked (for more on exactly how/why this is happening, see the link above).

That context is important because, when the legislative and regulatory routes are closed down by Republican obstruction, only the courts and executive branch remain. Any right-wing vitriol directed against these measures that doesn't acknowledge the GOP's role in closing off all other routes is an attempt to deceive the audience.  

The issue of disclosure is of critical importance to our democracy. Think of it this way: speech, as most of us understand it, is associated with identifiable voices. Accordingly, if money is speech, we need to know who is speaking. When that link breaks down, it's hard for voters–and the reporters they depend on–to tell what interests are moving through our political process. The advertisements run by Mom 'n Pop Apple Pie Shop could be a underwritten by money from Big Pie, and there'd be no way for anyone to know. Ultimately, there's no way to make an informed decision about who to vote for if you don't and can't know who's backing them.

One option is to take money out of politics, but I'm not sure there's an effective way to use politics to keep money out of politics. If you accept the proposition that interest groups can affect political outcomes, then it seems only natural that they'd work to ensure their main avenue for exerting that influence isn't cut off by an act of Congress. Even if you're willing to assume a perfect piece of campaign finance legislation, you still run into the problem that the law is constantly evolving. A decision down the road that couldn't possibly have been forseen can punch a hole through even the most well-crafted campaign finance law. In fact, we just saw that very thing happen with the Citizens United decision that undermined years of precedent and opened huge gaps in McCain-Feingold. 

That reality is why ActBlue is so important. We're taking the most settled aspect of campaign finance law (the right of individuals to give to candidates) and using it as a way to demonstrate that small donors can have a powerful voice in our politics. By disclosing those donations, we're working to remove the stigma of political giving and make it an easy and regular part of American life. In the end, we're working to restore the very confidence in our political system that Republicans are actively undermining in search of an ever larger, ever less accountable grip on our political system.

The first quarter of the 2011-12 election cycle is on the books, and it’s a doozy. We saw a massive uptick in contributions relative to previous cycles, driven by the backlash against Gov. Walker’s union-busting in Wisconsin. That drove a precipitous drop in the average contribution size relative to 2009, which was made starker by a higher-than-usual contribution size in 2009 thanks to inaugural events. All in all, the trends are exactly what we want to see: more money, coming from more people and going to more Democrats.

Number of contributions 180,547
Total raised $8,715,611.77
Average Contribution size $48.27
Committees receiving money 881
Fundraising pages receiving money 974
Pages created 1,029

 

And here’s how those numbers stack up to the last few cycles. Remember that we offer 2007 as a benchmark for a pre-presidential off-year and 2009 to illustrate cycle over cycle growth:

Q1 2007 Q1 2009 Q1 2011 Change
Contributions 31,441 24,361 180,547 641%
Volume ($) $3,141,038.27 $5,343,772.70 $8,715,611.77 63%
Mean Donation $99.90 $219.36 $48.27 -78%
Committees 235 651 881 35%
Pages Created 346 1,026 1,029 .3%
Pages w/ Money 203 684 974 13%

 

 
And here are the five top committees, ranked by number of donors, for Q1 2011.

Name Race Donors Dollars
PCCC Organization 61,542 $691,584
Democracy for America Organization 44,767 $503,841
Democratic Party of Wisconsin Organization 43,595 $1,099,087
Wisconsin State Senate Democratic Committee Organization 30,726 $768,067
PCCC Recall Committee Organization 25,481 $267,919

 

Here, as everywhere else this quarter, we see organizations dominating the field as political campaigns have yet to ramp up. Those organizations, in turn, are laying the groundwork that will make them valuable allies when the horse race gets underway in earnest.

Guest Post by Steve Gold, General Counsel for ActBlue

Stemming the growing tide of money in politics has become a fool’s errand. Recent opinions out of the Supreme Court have made it clear that the entrenched conservative majority have every intention of expanding the scope of constitutionally protected spending in campaigns, which means even more advertising by independent groups. And the Court’s attitude towards political money has now trickled down to the FEC, which is effectively on strike. Commissioner Donald McGahn, the ideological leader of the deregulating Republican commissioners, recently spent 45 pages (.pdf) excoriating what he considers his Democratic colleagues’ overzealous regulation of political activity going back years. Bolstered by opinions from the Roberts Court, McGahn principally argued one overarching point: The FEC is not permitted to exercise their judgment.

Under the law, the FEC may regulate campaign advertising only if the ad expressly advocates the election or defeat of a federal candidate. The statement issued by McGahn — and by extension the other Republican commissioners, who so often follow his lead — makes it clear that he (and they) will block the enforcement of rules on the books which instruct the Commission to consider contextual factors when trying to determine whether it contains express advocacy, not just the words or images within the four corners of an advertisement. McGahn believes that the rule should be that, unless a special interest runs an advertisement containing the “magic words” listed in Buckley v. Valeo (vote for, elect, support, etc.) or their “functional equivalent,” then the FEC has no business regulating it. Insert advertisement; check for magic words; out pops regulation. Or not.

The problem with this approach is that IBM recently demonstrated (although they may not know it) that the vast majority of political spending will fall outside the rule, and thus, regulation. Some very smart engineers at IBM worked for years developing a very smart computer named Watson that could compete with the very smartest Jeopardy contestants. Like McGahn’s “four corners” rule, initially the engineers programmed Watson to rely on millions and millions of “rules” in order to reason out the answers to questions: water is wet; parents love their children; you smile when you’re happy. They quickly found that, unlike the best Jeopardy players who answer correctly 90% of the time, Watson could only find the right answer 10% of the time by relying on matching the magic words with the rules. It wasn’t until the engineers allowed Watson to look for patterns in multitudes of old Jeopardy questions, providing the context needed to decode a Jeopardy clue, that Watson managed to perform like a real contestant and defeat two of the greatest ever to play the game. No simple rule could ever have provided Watson with the key to that lock.

The essence of a Jeopardy clue, and of political advertising, is complex language: puns, double meanings, allusions. Candidates and their surrogates campaign in poetry, but the Supreme Court and the FEC have said campaigns must be regulated in prose. The inevitable result is that campaign finance reform will only ever be able to restrict a very small portion of the spending done by forces which distort our political discourse, at least until there is a significant change in personnel on the Court. The obvious answer, as Yale Law professor Heather Gerken argues, is to focus on “leveling up” and “using politics to fix politics.” Rather than attempting to keep corrupting money out of the system, we should increase the amount of productive money in the system to neutralize that unproductive money. Exciting new approaches in this vein have been suggested and even introduced in Congress, such as four-to-one matches of small-dollar contributions to publicly financed candidates.

But the potential also exists today — without a federal program that would have to get through a Republican-controlled House and survive future attempts at legislative defunding or dismantling (such as the Presidential public financing system now faces) — to achieve this leveling up through greater engagement and smarter fundraising within the existing private system. For example, in the past few weeks activists and organizers fighting to preserve collective bargaining rights in Wisconsin have taken to the Internet and used the tools we offer at ActBlue to generate twenty-five thousands plus contributions, totaling more than half a million dollars. These contributions came from ordinary people using the existing campaign finance rules to stand up to the Koch brothers’ back room plot to hijack Wisconsin public policy. That is a force that neither requires government approval nor is at the government’s mercy; in fact, it’s protected by the Supreme Court! It’s democracy in its purest form, and it can save our political system.

There are many different approaches to using politics to fix politics, and there will certainly be many more great ideas to come. For decades, conservatives have been working diligently to chip away at the lines drawn by campaign finance reformers to keep money from corrupting our democratic system. Clearly, this conservative effort has gained considerable momentum on the Supreme Court and at the FEC of late, and their momentum is not likely to be reversed anytime soon. That is why now is the perfect time to harness that very momentum and use it to usher in the next big thing in campaign finance reform.

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