Why Is Online Fundraising Down Right Now?
… and what the heck can we do about it?
Online political fundraising is critical in shaping election outcomes, but recently, there has been a noticeable slump in the fundraising environment.
At Middle Seat, we’re looking at the potential factors contributing to this downturn and how they have manifested in House and Senate campaigns. The period from 2015–2023 offers a useful lens through which to analyze the changes and their impacts. We consider a range of elements throughout our analysis, including political, technological, and economic aspects, and their interplay with grassroots fundraising.
It’s our hope that this analysis will shed light on the present situation and provide valuable insights for future strategies in the political space:
Topline Stats
- Small-dollar fundraising in the first two quarters of 2023 is significantly lower than in the same quarters in recent years.
- The increase in fundraising quarter over quarter is much lower than in almost all previous cycles and years (except for January 6th).
- We believe several political, technological, and economic factors are playing a role in this depression.
The TL;DR? We’re seeing a decrease in small-dollar fundraising over time due to current circumstances, but there is no indication that small-dollar fundraising is “going away” or not going to be around in the future. The overall trend is still upward since 2015.
Potential Factors
Political Factors
The period between 2015–2022 was an extraordinary time of political upheaval and uncertainty — from the election of Donald Trump to the resulting aftermath. The unique threats he posed to our society motivated donors on the Democratic side, and the plays to his base manifested an increase in grassroots fundraising on the GOP side.
With Trump out of office, it’s possible that grassroots donors on the left feel a sense of stability, as if “the adults are back in charge.” Typically, political stability has an inverse relationship with grassroots fundraising, with less motivation for grassroots donors to give.
Technological Factors
Over the past years, we’ve seen emerging threats to the digital fundraising industry that may be contributing to a slower environment.
- An increase in spam email across the industry has led to a situation in which fundraising email writers are now expected to become experts in email deliverability (aka staying out of the spam box). This may be leading to more campaigns’ content being sorted to the junk folder — lowering their performance on what’s typically the largest fundraising channel for small-dollar donors.
- In addition to deliverability issues, Google enacted and then abruptly ended a Verified Sender Program which led to a short-term burst in fundraising and then a major subsequent deliverability collapse for many of the programs which were enrolled.
- Facebook announced they were deprioritizing political content in users’ feeds, leading to lower engagement on campaign social media. This has downstream effects on organic social fundraising as well as paid advertising return on investment.
- Meta has removed targeting options for politicians and political interests from their interface, so you can’t target prospective donors as well on their advertising platforms without creative or labor-intensive workarounds.
- Apple changed privacy tracking on their devices to make it harder for Meta advertisers to track conversions and clicks.
- Apple got rid of open tracking, making it difficult for email marketers to determine which Apple Mail users should be actively targeted for solicitation.
- The advent of political texting has been a boon for small-dollar fundraisers over the past 7–8 years. However, new carrier and phone company enhancements are sorting many political texts to spam folders, lowering the true receipt rate, and increased volume is crowding phone inboxes.
Economic Factors
The inflation crisis of 2021 to 2023 likely had a big impact on the fundraising recession. As inflation eats away at peoples’ capital, they have less to spend. Political giving is a luxury expense for most, and one of the first things that gets cut out of the budget, particularly for small-dollar donors. Supporters are less inclined to give $5 to a politician when they are tight on extra cash, especially in the off year.
It’s also widely known that most grassroots donors skew older. We’re talking about 65+ year-olds who are close to retirement or already living on fixed incomes and investment portfolios. As the Fed hikes rates, the stock market takes a hit — and people whose net worth is tied up in investments hold on to their money a little tighter.
The Data
Middle Seat conducted an analysis of unitemized fundraising from FEC reports for House and Senate campaigns. What we found is that, while small-dollar fundraising is on a rising trajectory long term, the first two quarters of 2023 have shown a slump in performance. This data is not filtered by partisanship.
You have to go all the way back to early 2019 to see numbers as low as we’ve seen in Q1 and Q2 of the 2024 cycle. And in that year, we had a contentious Democratic presidential primary sucking money out of these House and Senate contests.
Cycle over cycle, fundraising is down 48%. Furthermore, the increase in fundraising from Q2 over Q1 is the second lowest on record in our data set, indicating that a turnaround seems unlikely anytime soon. On average, we see a 47% increase in fundraising in Q2 over Q1 across these years. But in Q2 of 2023, fundraising only went up by 19.8%.
Methodology
In order to remove outliers from this analysis, we excluded the top 10 fundraising committees from the data set. And as a result of the fact that the number of committees shifts up and down from year to year, we also limited the data set to only the top 30 fundraisers.
- We downloaded the entire FEC filings report for congressional committees here.
- For each quarter, we selected the column titled “individual_unitemized_contributions_period.”
- We rank-ordered the committees from the highest number of unitemized money to the lowest.
- We selected the committees with the ranks 11–30 and summed them up together to get a quarterly total for small-dollar fundraising by major campaigns.
Recommendations for Democrats to Rebuild Online Fundraising
Data Tools to Reach Donors in Inboxes & Online
Middle Seat’s proprietary data tools offer a potential solution to improving the efficacy of online fundraising efforts. Our new shared data pools — the Block List and Target Sync — are available regardless of whether or not you are a Middle Seat client. By sharing metadata (we are not sharing your emails or phone numbers!) across campaigns, nonprofits, and PACs, we can increase email and ads fundraising returns on investment. So far, our data set has more than 70 million unique Democratic activists and donors.
Our proprietary Block List* pool is a shared data set of spam reports and unsubscribes from tens of millions of email contacts from across the Democratic space. We’ve identified bad actors and serial spam reporters in a giant “Block List” that we can suppress from new acquisitions or filter on our existing list as needed to protect our deliverability.
The Block List keeps you out of the spam box so you can reach the inbox, providing enormous fundraising and engagement value over time. Plus it saves you money by reducing the amount of wasted acquisition purchases you’ll make on bad records.
Target Sync** is an optional pool for campaigns and causes that want to extend their ability to reach subscribers, volunteers, and donors online. By joining the Target Sync pool, you will be able to sync the most recent dates that any given user opened or clicked an email across all pool members to your CRM. That helps you identify inactive email addresses likely to engage with your content.
Meanwhile, the advertising side of Target Sync allows you to target a 70m+ audience of known Democratic donors and activists via our proprietary custom lists on Facebook, Instagram, Twitter, and other platforms that allow first-party data targeting.
*The Block List is completely free of charge to join. It’s our attempt to fight spam and spam reporters so we can keep Democratic emails in inboxes.
**Target Sync has a modest cost involved depending on the size of your email list. This cost pays for our Civis instance so that we can keep this product active for members.
Interested in working with us? Drop us a line at hello@middleseat.co, or send us your contact info here:
Editor’s note: this post was edited July 17, 2023 at 5:31pm ET to account for new data processed by the FEC.
