Small-Donor Fundraising Does Little for Democracy--But A Lot for Political Consultants

What used to be seen as progressive and participatory has become predatory

It’s hump day, friends—and I’m back. If you know someone who would be interested in joining our conversation, please:

Photo credit: Tracy O/Wikimedia Commons

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What does the Republican Party think its biggest problem is right now? Not the fact that its leading candidate for the 2024 presidential nomination, Donald J. Trump, is under civil and criminal investigation in four different venues. Not that numerous witnesses who have placed Trump at the center of a wide-ranging conspiracy to overthrow the results of a legal election. Not the fact that numerous Republican candidates, running for elected office around the country, are election-deniers who continue to maintain the fiction that Donald Trump won the 2020 election.

No, no, no, no. The Republican Party, those good folks who claim to be the party of the working class, are worried about money. Specifically, they are concerned that they are running short of money as they enter the four crucial months before election day, 2022. And with that dip in fundraising, their hope to capitalize on Joe Biden’s sagging poll numbers and win back the House, the Senate, and key offices in swing states (where having a proponent of the Big Lie as governor or Secretary of State could help them steal the 2024 presidential election) may be dimming too.

It is Republican small donors who are closing their wallets across the board, even as Democratic giving has jumped 21%. “Small-dollar donations typically increase as an election nears,” Shane Goldmacher wrote yesterday at the  New York Times,

But just the opposite has happened in recent months across a wide range of Republican entities, including every major party committee and former President Donald J. Trump’s political operation.

The total amount donated online fell by more than 12 percent across all federal Republican campaigns and committees in the second quarter compared with the first quarter, according to an analysis of federal records from WinRed, the main online Republican donation-processing portal.

In part, Republicans can probably thank the Supreme Court’s Dobbs decision for this, and critics have long grumbled that the Trump operation “overfishes” small donors, spending only on himself and forwarding his grievance tour. To compensate for this puzzling decline, conservative deep pocket donors “have cut seven- and eight-figure checks to Republican super PACs, offsetting some of the party’s small-dollar struggles, which some attributed to inflation and others to deceptive tactics that are turning off supporters over time.”

But plugging the gap does not address what could be a looming problem for the Republicans going into 2024: small donation fundraising has become a crucial source of funds that cannot be fully replaced by big donors. The American political system now runs on geysers of cash provided by the voters themselves, often to candidates who they will never have a chance to vote for.

Small donation fundraising was not always about the money. When it originally emerged, in George McGovern’s 1972 presidential campaign, it was largely a campaign tactic. It branded the candidate as a man of the people, and a small-d Democrat. As importantly, prior to all of us being online constantly, soliciting small donations was a way of figuring out where supporters were and getting their addresses and telephone numbers to activate them as voters.

But it was also labor intensive, and before the use of bank-sponsored credit cards was widespread (in 1970, only a sixth of American households had one), collecting those donations wasn’t easy, so few other candidates picked up on the idea. But in 1992, former California Governor Jerry Brown, who in his first campaign had urged voters to imagine that thinking small could solve big problems, made a run for president, pitching himself as an outsider candidate against Bill Clinton. Brown’s campaign set up an 800 number for supporters to give small donations. But before the searchable web, it was hard to get the word out about this innovation. Instead, the candidate often repeated the number during televised debates or held it up on a sign when he made public appearances, causing some journalists to compare him to the bootstrap entrepreneurs who sold patented household objects on UHF channels.

Small donations needed the internet to thrive, and specifically, they needed the networking capacity of social media and email. So, it wasn’t until 2003, and Howard Dean’s insurgent campaign for the Democratic presidential nomination, when small donations emerged as a viable, new campaign tactic. Candidates usually spent an inordinate amount of time phone donors for large donations of, say $1000. But it cost nothing in money and time to send out an ask on a blog, website, or email blast, to which 200 voters might respond with $5 each in a matter of minutes. And what the Dean campaign, which assembled almost half a million donors before Dean dropped out of the race in early 2004, noticed was that people who gave these donations remained active, not only giving multiple times, and sometimes turning into amateur bundlers when they had maxed their own ability to give, but volunteering for the campaign and putting boots on the ground.

It’s hard now to remember how progressive that approach to politics seemed, not just in 2004, but in 2008, when Barack Obama’s team refined those tactics to put him in the White House. Now we live in the world that Obama (or, more specifically, political consultant David Axelrod) made: political consulting has been restructured around digital appeals that have a completely different feel to them. We are barraged with messages that wheedle, berate, and ask us to crank up our anxiety even further, many telling us that we haven’t done enough and that America is on the brink of disaster—because we failed to act!

It wouldn’t surprise me if Trump voters have become exhausted from these appeals: they lost an election two years ago, and the appeals from Trumpville are particularly bilious. But Democratic appeals can be toxic too, which points us to how these appeals have transformed in the almost twenty years since the Dean campaign flashed through the political sky like a meteor before crashing into the reality of Iowa and New Hampshire.

Small donor appeals are still about creating political community, but not around ideas, but around partisanship and fear of the other party. Furthermore, they nationalize every race: there aren’t enough donors in most states to collect millions of dollars, but reaching to all 50 states makes that possible.

For example, I get comparatively few appeals from my own elected officials in Massachusetts, but I get dozens from candidates in other states, many of whom are renting lists from political consultants who ran campaigns I have given to in the past. Digging into my own spam file, I have Democratic Congressman Tim Ryan, who is running a good race against Peter Thiel-backed J.D. Vance for an open Ohio Senate seat. Ryan is asking me for $5 “because it’s not about how much you give, but how many people we have on the team.” Democrat Beto O’Rourke’s campaign chides me that they have written me ten times, because we are at a “a make-or-break moment.” If I do not act, the man who is running for Governor of Texas warns that “Republicans could hold power for the rest of our lives.” 

That is a scary idea, but these appeals are from people I can’t vote for, many of whom don’t need my money. For example, I get three texts a day from Stacy Abrams. I have a frantic email from incumbent Georgia Democratic Senator Raphael Warnock, telling me that he is trailing the GOP’s Herschel Walker by a point—which isn’t even true. Warnock is ahead by three points in that race. Furthermore, Warnock, one of the Democrats’ top fundraisers, has raised almost $30 million since 2021; going into the fall season has $22 million in cash on hand. In contrast, Walker has raised a little more than $20 million, has a hellacious burn rate, and has $6.8 million on hand.

But it’s also true that money does not necessarily win elections, because—in the case of Senate, congressional, and gubernatorial races—national fundraising has actually divorced fundraising from direct voter mobilization. Look, for example, at Amy McGrath, who was a monster fundraiser in 2019-2020: $2.5 million in the first 24 hours after she announced,  $10.7 million in the first three months, with a total of $94 million for the 2020 cycle.

And unsurprisingly, McConnell clobbered McGrath by almost 20 points, because that money did not come from Kentucky voters, and because she was behind him by double digits for almost the entire time that money was pouring in.

In fact, as Michael Sokolove of The New Republic pointed out in February 2022, McGrath was never even in spitting distance of beating McConnell. Each election cycle, there are billions of dollars that go into losing campaigns in both parties because small donation fundraising has significantly elevated the role, and the profitability, of political media consulting. “Modern political campaigns like McGrath’s are multimillion-dollar pop-ups,” Sokolove writes: 

The operatives involved in them raise the money, spend it, shut it all down after Election Day, and move on. They are not accountable to a board of directors or to the donors who fund the campaigns. A big chunk of the cash raised from donors comes back to the campaign pros in the form of fees and commissions for creating TV and digital advertising—for placing those ads, which is known as media buying—and for the fundraising itself.

And the money touches numerous other hands along the way. McGrath “ran 83,052 television spots in 2020. On digital, primarily Facebook and Google, McGrath had 422 million impressions, according to the firm AdImpact—meaning that was how many times someone came into contact with her message on their phone or other electronic device, if even for a moment.”

Ka-ching! 

Other than fleecing hard-working citizens, and giving them the illusion that they are solving a problem with their credit cards, what else does this orgy of fundraising do?

By nationalizing campaigning, it keeps Americans in both parties focused on political contests occurring in other states, and other districts, when they could be taking an interest in, funding, and working for, their own local, state, and national candidates. It creates the illusion of participation, rather than participation itself. It flattens the issues that are specific to states and regions, encouraging broad-brush sloganeering that lets incumbents off the hook about what they have, or have not, accomplished, and allows challengers to draft off national talking points that incite emotion but offer few solutions.

In addition, frenzied, small-donor appeals asks us to focus on single causes for our political grievances, and distract us from the more immediate, but less glamorous, political bodies—school boards, town councils, county supervisors, and state legislators—that have a more direct effect on our lives. Yes, Mitch McConnell is responsible for stealing one of the three Supreme Court seats that helped to overturn Roe, but the people who are now most likely to determine whether Americans have reproductive freedom sit in state capitols, not in Washington.

So, while I am glad that Republican fundraising has slowed, if that really means that small donors have begun to understand that they are funding a political party that has been consistently gaslighting them since 2016 and repaid their loyalty by stomping all over the Constitution on January 6, 2021.

But who has the most money is not the problem—the more pervasive threat to democracy comes from the money itself, not whose hands it is in. And that’s what we need to change.

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Short takes:

• On her Hard Histories Substack, historian Martha Jones looks at the complexities of how free Black Marylanders understood the best past to a future of full citizenship as the political crisis over slavery escalated in the 1850s. Was emigration to Liberia a better choice than fighting for full citizenship as Americans? “It was evident what Black migrants gave up — a birthright claim to full citizenship in the US,” Jones (who has written a terrific book on this topic) writes. “Gross, for his part, emphasized what they gained in Liberia, including the political rights that white Maryland lawmakers refused them.” (July 26, 2022)

• There’s a financial crisis coming—for you. “When the 401(k) debuted more than 40 years ago, it was meant as a supplement to pensions, not a replacement,” Helaine Olen writes at The Washington Post. “But employers, under pressure from shareholders to cut costs, often jettisoned pensions entirely. They dumped responsibility for retirement planning on employees, without increasing wages to cover these new employee-borne costs.” And there is currently no politically viable plan in Washington that does anything to address what will surely be a crisis for the next generation of seniors. (July 26, 2022)

• Where is abortion on the ballot in November? At Bolts, Daniel Nichanian identifies the key questions about access to reproductive rights, and where voting will matter most this fall. But these questions are also a guide to how government works, and what offices have power over our bodies. “The elections mentioned, which cover 21 states, are by no means exhaustive,” Nichanian writes. “There are many other races playing out along similar lines for offices that will wield power over these issues for years to come. Still, we hope to give you a taste of the enormous range of powers held by state and local officials, and some of the ways that candidates on all sides are getting creative in how they’d use these in the wake of the Dobbs decision.” (July 14, 2022)