Democrats rely on this platform for grassroots donations—maybe they shouldn’t

With democracy on the line yet again in November, millions of progressive voters will do what they’ve been conditioned to do: They’ll open their digital wallets to try to save it.

A practice that initially took off among anti–Iraq War protesters in the U.S. in the early 2000s, offering small-dollar donations online has become the default mode by which Democratic-leaning voters engage with causes and candidates up and down the ballot. During the 2020 election, small donors contributed $400 million to President Biden’s campaign, representing 38% of his haul. (Though Trump’s grassroots take has historically been greater than Biden’s, other Republican politicians don’t see as much in small donations.)

The vast majority of those grassroots dollars flow through ActBlue, a Somerville, Massachusetts–based nonprofit that’s become essential technology for anyone interested in supporting Democrats. Since its founding in 2004, ActBlue has processed more than $13 billion in donations. In the wake of major events, like the Supreme Court’s overturning of Roe v. Wade in 2022, links to ActBlue’s battle-tested donation pages proliferate in emails, text messages, and social media posts, sending millions of dollars to Democratic coffers. ActBlue processed $90 million in the week after the Supreme Court decision alone. A slate of Democrats running on an abortion-rights platform in Virginia attracted nearly 25,000 first-time ActBlue donors last year, helping the party win back control of the state’s general assembly.

ActBlue’s success was far from assured during the nonprofit’s early days. Its online contribution form, a stand-in for paper checks, was so revolutionary that candidates initially didn’t know whether money raised through ActBlue would qualify for federal matching. (It did and does.) In the years that followed, ActBlue refined its donation forms and expanded to support downballot races, navigating a complex web of local regulatory requirements. Then, in 2008, it turbocharged political giving by introducing its one-click service, ActBlue Express. In 2014, it boosted the service further with ActBlue Express Lane, allowing donors to give immediately from a link in an email without having to visit a webpage. A staggering 14 million Democrats have since saved their payment information with ActBlue, and the platform makes it easy for their small-dollar gifts to add up: Last year, nearly 20% of the donations it processed were recurring.

But a decade has now passed. Politics has changed, along with voters’ priorities—and ActBlue, for the most part, hasn’t. “They have obsessively tested the platform and evolved it over time to increase conversion rates,” says Julia Rosen, CEO of campaign consultancy Meadow­lark Strategies and ActBlue’s director of marketing from 2013 to 2017. “What they haven’t done is make a major leap forward in any major functionality, and that is frustrating to see.”

For most progressive leaders, ActBlue’s trustworthiness and reliability are sources of relief, especially when they look right and consider the alternative—a revolving door of for-profit payment processors, with the leading player, WinRed, closely entangled with the Trump campaign. At the same time, ActBlue is a near-monopoly, with one of the more lucrative business models in software—the 3.95% fee it charges on transactions. Yet until now, ActBlue hasn’t made it a priority to reinvest its revenues in R&D.

Since the debut of ActBlue Express Lane, the platform hasn’t launched any transformative new products. Its biggest recent features are a QR code generator and the ability to integrate with merch sales. Even more concerning, the nonprofit has done little to address one of the thorniest issues facing Democratic fundraising today: the donor fatigue wrought by constant solicitations for money. Campaigns have become so reliant on the powerful platform that they risk turning off voters and overlooking new ways to activate grassroots enthusiasm.

In January 2023, Erin Hill stepped aside after 14 years as ActBlue’s executive director. (She was also the organization’s first employee.) Her successor, Regina Wallace-Jones, is a former Bay Area technology executive with past experience at Facebook and eBay. She also served for a year as mayor of East Palo Alto and worked as a field organizer during President Obama’s reelection campaign. This year’s rematch between Biden and Trump will be the first major test of her leadership, but what happens down the ballot may be even more revealing.

The pleading messages arrive by text and email: “The first $25,000 in grassroots donations will have QUADRUPLE the impact . . .” “Gavin Newsom here, humbly asking . . .” “It’s Rep. Maxwell Frost, reaching out with exciting news . . .” “Is there anything WisDems can say to convince you to donate. . .”

These days, a single donation to one candidate or cause almost inevitably yields an onslaught of solicitations from various others, as third-party intermediaries buy and sell donor lists—the precious data behind any successful campaign. When grassroots powerhouse Rep. Katie Porter lost in the special election for California’s open U.S. Senate seat in February, her campaign wasted no time in hawking the email addresses and data it had collected from her donors to other progressives, with prices starting at $0.65 per donor, according to Politico.

ActBlue isn’t responsible for this spamification, but it helped to create the conditions for it. When President Trump was elected in 2016, activating the Democrats’ grassroots base, ActBlue Express’s one-click service was ready to capture their outrage.

Campaigns soon realized that Express, optimized for mobile, was also a natural engine for text solicitations, unleashing a torrent of desperate pleas on would-be donors. Campaigns began spending their dollars on targeted advertising, using the resulting gifts and newsletter sign-ups to capture even more emails and phone numbers.

A powerful flywheel started to spin, encouraging the formation of more PACs and more causes. But some critics now wonder if that flywheel has spiraled out of control— a fear bolstered by tepid giving to Biden in 2023. “When you strip-mine an entire ecosystem with spammy emails, you probably shouldn’t expect very good harvests for the next few years,” Will Easton, a digital fundraiser who worked on Bernie Sanders’s 2016 campaign, tweeted last July.

Micah Sifry, author of a Substack newsletter on politics and organizing, has described the political incumbent class as “just lurching from crisis to crisis, screaming, ‘The sky is falling!’” The compound effect is desensitizing.

Campaigns believe these tactics are still effective, but they’re tracking the wrong metrics, says Lloyd Cotler, a principal at Banter Messaging who served as SMS director for Hillary for America. To calculate the return on investment for a texting strategy, they simply compare the cost of sending the texts to the revenue that the texts generate. “They’re looking at it as a very isolated thing,” he says, instead of measuring, for example, “the long-term life of the subscriber.” Ideally, campaigns would work toward increasing the amount donors spend over time or turning donors into campaign volunteers.

ActBlue, meanwhile, can’t control the messages that campaigns and causes send, but it could take a harder line on list-swapping and donor privacy. Cotler would like to see the organization require donors to opt in for campaigns to share their information. “ActBlue should not be giving email and phone number data to campaigns by default,” he says. “It’s a huge betrayal of what people in the movement expect from a nonprofit entity.”

Wallace-Jones, ActBlue’s new executive director, says that the organization is “listening to and aware of” problems like spam-driven donor fatigue, “even if we’re not directly contributing to all of the concerns that are being raised.” For some exasperated donors, already disenchanted with a Biden–Trump rematch, “listening” may not be enough.

After the mass shooting at Covenant School outside Nashville last year, Alison Beale bought her 3-year-old daughter a bulletproof backpack and decided to run for office.

A former seventh-grade teacher in Nashville public schools, Beale had advocated for gun violence prevention when one of her students lost his brother to a mass shooting. Now that she was a mom, the deaths of three 9-year-olds and three adults at Covenant hit even closer to home. It was too much, Beale says, to watch “folks in power do nothing after children were killed at school.”

Last fall, she launched a campaign to unseat a Republican state representative in Tennessee’s 45th District. Like many Republicans in the state, he had run unopposed for the past two elections.

“My campaign is grassroots to the core,” says Beale, who is operating on a tiny budget and using ActBlue. More than 80% of her donations are under $50; no donor has contributed the $3,600 individual maximum. “It is truly small donations adding up, and that is made possible by social media and digital platforms.”

Beale, like most first-time candidates, is building a database of voters, donors, and volunteers from scratch. ActBlue provides tools for data analysis, but only about a candidate’s own donors. And Beale can’t buy data from another Democratic campaign because so few have run in her district in recent years. Some Democrats voted Republican in order to participate in primary elections in the years when Republicans were the only ticket in town. Others simply stayed home, dismayed by their lack of choice. “I’m in a district I know is flippable, I know is purple,” she says. But information on prospective supporters is frustratingly out of reach.

If there are Democratic donors elsewhere in the state who are eager to give to her campaign, it’s up to Beale to identify and reach them using other tools. Mostly, she’s trying to connect with them on Instagram and TikTok, using her personal story and her newsy takes on legislation to get their attention.

Beale’s experience highlights a gap in the grassroots infrastructure that Democrats have built. ActBlue, in its early days, was able to piggyback on progressives’ deep ties to on-the-ground groups like labor unions and digital networks powered by the liberal blogosphere. (Daily Kos, for example, established a tradition of publishing endorsement slates that distribute funding to candidates via ActBlue’s tandem fundraising feature.) Today, in districts where those historical ties are absent, there’s little to fill the void.

Some upstarts have begun to try. B Corp Civitech focuses on get-out-the-vote efforts, using data to help campaigns identify potential voters who haven’t been participating. Startup Numero, which supports the task of dialing-for-dollars with an app that helps candidates prioritize their time, completed Y Combinator in 2019. Daisychain, a customer-relationship management startup backed by Higher Ground Labs, a venture firm started by former Obama staffers, makes a platform that gives campaigns an integrated view of their supporters. Another Higher Ground portfolio company, Quiller, uses generative AI to help campaigns draft fundraising content.

As for ActBlue, it continues to act as an optimized mousetrap that converts visitors into grassroots donors. It’s so effective that even when campaigns experiment with alternatives, as Biden did last fall, they almost invariably return. But a short-term bump in dollars raised doesn’t necessarily translate into victory at the ballot box or the ability to make long-term investments in purple districts.

Wallace-Jones seems to be aware that it’s time for change. She says she wants to make the organization’s tools and data accessible to campaigns without deep technical expertise. “I’m a former local elected official. I recognize what it means to be a campaign of one, plus many volunteers,” she says. And she’s acting with urgency. Two months into her tenure, she laid off 17% of ActBlue’s workforce, noting that she wanted to hire for more technical roles (three data roles are currently open). This spring, she started rebuilding the nonprofit’s executive team.

Though the presidential election looms large, Democrats have been learning the hard way that every election matters when voting rights and election oversight are at stake. The progressive ecosystem will be watching to see if ActBlue meets the challenge.

https://www.fastcompany.com/91112749/the-color-of-money?partner=rss&utm_source=rss&utm_medium=feed&utm_campaign=rss+fastcompany&utm_content=rss