How online money is reshaping the Democratic Party

By the time of November’s election, Democratic candidates and liberal groups will have raised an astounding $1.5 billion in online contributions alone. And nearly every cent of it will arrive first in a mostly empty basement, where a printer the size of a carry-on suitcase processes checks next to a solitary cardboard cutout of former President Bill Clinton.

This is ActBlue, the not-for-profit group that has become a ubiquitous presence in Democratic politics, providing an online fundraising platform for just about every entity inside the party. If you’ve ever donated to one of the party’s candidates, or one of the recently formed grassroots progressive “pop-up” groups, you probably used ActBlue.

Few groups, then, have a better view of how a surge of relatively small, online contributions is reshaping the party’s priorities and campaigns — or how they are poised to upend the upcoming Democratic presidential primary.

“It’s an extraordinary time in politics,” said Matt DeBergalis, ActBlue’s co-founder who now serves as its chairman of the board. “I’m proud that we’re part of it. I’m proud we’ve built what we have, and frankly, I think we have a lot of work to do.”

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DeBergalis’s group reached a significant milestone this month, when it crossed $1 billion in online fundraising since the current election cycle began. It’s a huge number on its own, made more remarkable by the fact the group has processed only about $2.4 billion total since its 2004 founding.

That means more than 40 percent of its total take has come in the last 20 months. ActBlue processed just $780 million in donations during the last election cycle, even though online contributions usually spike amid presidential races.

The surge certainly reflects grassroots enthusiasm among Democrats that has made small, online donations a priority. It’s the maturation of a phenomenon that began with former Democratic Vermont Governor Howard Dean in 2004, the original White House contender to benefit from online money and enthusiasm, and continued with Barack Obama in 2008 and Bernie Sanders in 2016. And no candidate raised more online than Donald Trump during his presidential campaign.

Now, instead of being mostly confined to the presidential race, Democratic candidates writ large are benefiting.

Even the party’s House candidates have seen a larger and larger share of their fundraising coming from the digital platform: 12 percent of their money came from ActBlue in 2014, according to statistics provided by the group, compared to 34 percent so far this election cycle.

“That’s something people are missing about what’s going on in 2017 and 2018, just how much small-dollar donors are driving what’s going on,” said Erin Hill, ActBlue’s executive director. “They’re setting the priorities. They’re deciding what resistance groups they wanted to support and get off the ground.”

Hill expects that by the end of the election, ActBlue will have processed $1.5 billion in online donations this election — with an average contribution of just $34.

It’s a lot of money for a non-profit located in an old publishing house hundreds of miles from Washington, where a few dozen staffers work on the platform while helping campaigns set up their own accounts.

But the basement is where the money is, literally. Underneath a series of exposed pipes and wires is an otherwise average looking office printer, where many of the online donations are processed into checks before being sent to campaigns and other entities. (ActBlue wires larger campaigns the money directly.) Hill estimated the printer had processed checks worth a half-billion dollars.

“In 2005 and 2006, it felt like this exciting new activist thing that could help get people off the ground and make differences on the margin,” said Hill, who joined in 2005. “And now in 2018, it’s how campaigns are building from the first day, knowing that small donors are a strategic part of their constituency, and that they have to build these small-dollar networks in order to be viable.”

Candidates have traditionally raised money one of two ways, either by “dialing for dollars” (calling wealthy donors and asking them to donate) or holding expensive fundraisers for a large group of contributors. Either method empowers rich donors to set the Democrats’ priorities — deciding what kind of candidates receive funding and what issues receive attention.

The increase in small-dollar money turns that dynamic on its head. Since Donald Trump’s election, hundreds of grassroots progressive “pop-up” groups have received key support for online donors. Many of those groups, like Indivisible and Swing Left, are enormously influential among liberal activists.

“They’ve been great partners — not just for us but for our candidates, too,” said Amanda Litman, co-founder of Run for Something, a liberal group that encourages younger candidates to run for office. She said that during her group’s first year, half of its fundraising came from ActBlue.

To Hill, the surge in online donations created a marketplace for groups like these to exist, a marketplace that better reflects the priorities of the party’s rank-and-file members. Since 2017, ActBlue has attracted 1.6 million new donors.

“There was a new whole crop of people who were excited, saw donating as part of resistance and wanted to get involved,” said Hannah Brown, ActBlue’s director of marketing.

These six bellwether districts will help to determine whether the Democrats can engineer a wave election to regain control of the House of Representatives in 2018.

Hill doesn’t think small online donations will replace big donors, seeing the two sides as complementary rather than competitive. But she does see small-donors playing a huge role in the party’s 2020 presidential primary, a wide-open race widely expected to draw dozens of challengers.

They’ve already played a big role in presidential campaigns before: The single largest spike of activity for ActBlue came in 2016, on the night Bernie Sanders won the New Hampshire primary, when during his victory speech he requested people donate to his campaign. ActBlue processed about 20,000 contributions in ten minutes.

Sanders used small-dollar donors to great success in 2016, but they are poised to be an even more essential part of any winning campaign in 2020. Part of it is about the money itself, of course: Hill estimates that any winning Democratic nominee will receive half of his or her money from small-dollar donors. (Unlike larger contributors who quickly reach the legal limit of how much they can contribute, candidates can tap into their small-dollar donor network throughout a campaign.)

But she describes a candidate’s small-dollar contributors as something akin to their board of director. Everything a candidate does — from rolling out a new policy to the amount of time spent on the campaign trail — should be done with small donors in mind.

“You have to give your small-dollar donors a seat at the table when you do anything in the campaign,” Hill said. “Folks are going to need these communities around them. They’re going to need these communities of small dollar donors and think about how they’re building that from day 1 … it’s not going to be something you can make up for later in the process.”

After all, whomever the Democrats nominate will face the biggest-ever recipient of small-dollar donations.

“The person who has highest amount of small-dollar contributions ever is sitting in the White House right now,” Hill said. “He sold a lot of those damn hats.”

Alex Roarty: 202-383-6173, @Alex_Roarty