Mind the Gap: Online Fundraising

A recent article exploring the online fundraising gap between Republicans and Democrats, unfortunately, fell into an old trap about the reasons for this disparity.

Given that we are heading into a presidential election cycle, I feel that it would be dangerous for party stakeholders to fall victim to the mythology that this is primarily a technical problem. It is not.

To be clear, as is the case with most sectors in our economy, there is a constant need/opportunity to improve technical infrastructure to stay current and innovative. However, to the degree that there is a disparity in this area, it is a symptom of a greater problem and not the root cause. Too many observers believe that a single magic hire or rushed piece of equipment will solve this problem overnight. It will not.

Investment Disparity

Democratic campaigns spend millions of dollars, usually very early in an election cycle, prospecting for donor email lists that they can target later with fundraising appeals. Typically, this prospecting is more concerned with the long-term (cycle-long) ROI — rather than a quarterly or an instantaneously positive ROI. Even a cursory review of FEC reports will demonstrate this.

If you spent nothing on direct mail, would you raise money? If you spent nothing on major donor fundraising — no finance staff, no high profile events, no travel — would you raise money? Why is online fundraising expected to be different?

The “secret” sauce that most Democratic campaigns are comfortable with is the realization that small online donors, especially those acquired early, are very likely to be repeat donors within the same election cycle. Properly conducted, the ROI on an existing online donor community is incredible.

Democrats raise more online, because their campaigns and organizations have spent substantially more building and maintaining those communities of online donors. At the core, the disparity is no more complicated than that.

One-Click Economies of Scale

While the article is correct that the lack of a unifying one-click donation platform is a major problem, it cites common assertions that this is due to technical challenges. Again, it is not. This is a cultural challenge. The largest Republican campaigns and organizations simply are not synced up on this issue; greater cooperation in this area would have an outsized influence on the problem. By their very nature, one-click platforms achieve exponential benefits as their user base expands. Particularly at the scale of national campaigns, the increased conversion rates are extraordinarily meaningful.

Sustainable Progress and Infrastructure

The problem is not the profit motive; tellingly, most of the top Democratic digital strategy firms are all very profitable. In fact, the Democratic Party’s willingness to invest in sustainable business models — while the GOP has typically tended to centralize things internally — is one of the situation’s great ironies.

As Eric Schmidt, Dan Wagner and others have realized, a sustainable business model enables infrastructure to be carried from one campaign to another — allowing for the advanced development of platforms and activist communities.

Final Thought

I have literally sat in rooms with campaigns who emphatically said that their candidate, campaign, cause, or community just couldn’t raise money online; in all cases, after making the right investments, they were surprised and thrilled with the results.

In one notable case, one of the greatest skeptics of online fundraising I’ve ever met was reluctantly compelled to make those investments. After the election, he was a believer — accurately stating that without the substantial revenue his campaign raised online, they would not have won their election.

This is a problem that Republicans can solve; not just by dedicating resources, but by intelligently using those resources on proven methods that consistently deliver results.

Matt Lira served as the Deputy Executive Director of the National Republican Senatorial Committee during the 2014 Election Cycle. He is a strong believer in the potential of digital platforms to improve our nation’s governing and political institutions; ultimately creating a smarter, more efficient and effective democracy for all citizens.