1 year ago
President Joe Biden’s campaign is mulling a significant change in its digital fundraising operation, testing alternatives to ActBlue, the powerhouse behind much of the Democratic Party’s small-dollar operation that blossomed during Donald Trump’s tenure.
A Biden campaign official told POLITICO that it has begun testing other Democratic donation platforms, including those run by NGP VAN and Action Network.
One reason the Biden team is considering the switch is to look for ways to lower the cost of processing what will likely be the hundreds of millions of small-dollar donations that flow to the president’s campaign. The approach is in line with the campaign's well-established frugality but also comes amid broader Democratic grumbling about the fees that ActBlue charges.
“The Biden campaign is testing the impact of different payment processors on our fundraising,” said the Biden official, who was granted anonymity to discuss internal campaign decisions. “While we are exploring, ActBlue remains an important vendor to the campaign.”
The Biden campaign is planning to continue its tests for several weeks.
Any shift would likely go almost entirely unnoticed by the party’s small-dollar funders. But it could have major implications for Democratic campaigns up and down the ballot, which may feel free to follow Biden’s lead if he breaks off from ActBlue.
The firm has been central to Democrats’ fundraising at all levels of the ballot. A running ticker on the company’s website says more than $12.6 billion has been raised through its platform since it launched in 2004.
Last quarter alone, 1.8 million unique donors gave more than $283 million to nearly 14,600 different Democratic campaigns and progressive organizations, the company announced at the end of last month.
A spokesperson for ActBlue did not comment by mid-afternoon Wednesday.
ActBlue was core to the at-times lopsided online fundraising Democrats enjoyed during the Trump era. Democratic campaigns at all levels of government — but particularly in the battle for Congress — were able to swamp their Republican opponents in fundraising thanks to small dollars raised online almost exclusively through ActBlue once Trump took office.
The value from ActBlue was to make those donations as frictionless as possible. The platform, for example, saves donors' contact and credit card information, which allows donors to easily give repeatedly to a campaign or to different races.
“ActBlue has a near-monopoly on [donation] processing in the space,” said Kenneth Pennington, a partner at the firm Middle Seat who was Sen. Bernie Sanders’ (I-Vt.) digital director during his 2016 presidential campaign. “And for many years, they’ve built that monopoly mostly because they have the largest database of saved credit cards from their users.”
ActBlue also allows multiple campaigns to set up pages to split donations, a powerful tool that lets lesser-known campaigns partner with nationally prominent Democrats to piggyback off their fundraising. And it lets donors opt into recurring donations, creating a self-renewing cash pool that helps campaigns expand their warchest.
But some Democratic digital strategists say there has been increasing discontent with the platform in recent times.
Pennington said there was significant frustration among digital operatives after ActBlue laid off 17 percent of its staff earlier this year. He also said their fees are typically higher than other, less prominent payment processors, and that he’s felt a sense of product stagnation — especially since the emergence of WinRed, a GOP competitor that was founded during the 2020 cycle.
The Biden campaign is open to potentially switching to another fundraising platform entirely or using a mix of a few different platforms, the campaign official said. Should the Biden campaign drop ActBlue, other campaigns could follow.
“If you're a down-ballot campaign, there are going to be millions of new donors saving their credit card information on an ActBlue competitor, which makes that more of an option for you in terms of switching,” Pennington said. That could ultimately lead to “more competitive infrastructure and tools” for the Democratic Party.
But ActBlue is not the only part of the Democratic Party’s permanent campaign infrastructure to undergo recent upheaval. NGP VAN — one of the alternatives the Biden campaign is testing — also recently laid off staff, and some have expressed concern about a private equity firm acquiring the company two years ago.
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