The term of choice in political giving these days is straight out of the world of finance - donors have become "investors." Now, liberal California venture capitalists have come up with the natural corollary - political "mutual funds."
The new venture, being launched Monday, is the work of Andy and Deborah Rappaport's New Progressive Coalition, a San Francisco-based organization they like to call the Charles Schwab of politics.
Through a rigorous vetting system, the coalition identified 37 Democratic-leaning organizations and distributed them among three funds. The idea is to guide potential contributors through the myriad liberal causes and groups that dot the political landscape.
For Andy Rappaport, the plan is simply a way of looking at political groups as startups and donors as the source of capital. It also is a way to expand a liberal donor base that Rappaport finds disturbingly small.
"Progressive funding is in a pretty sorry state," he said in an interview.
Searching for long-term missions
The Rappaports are Silicon Valley millionaires and among the biggest contributors to liberal and Democratic political groups, along with financier George Soros and Hollywood producer Steve Bing.
"We are really one of a very small handful of very large donors," Rappaport said. "Our view is that is an unstable and undesirable situation."
The effort is part of an evolution in liberal giving, where donors big and small are looking to organizations with proven track records or long-term missions instead of funding new, fleeting groups that disappear at the end of an election cycle.
A coalition of top dollar Democratic donors - the Democracy Alliance - met in Washington this month to hear formal presentations from established political groups eager for a share of the tens of millions of dollars the alliance is expected to have at its disposal.
The alliance, whose membership is by invitation only, has helped finance such Democratic-leaning organizations as the New Democratic Network, Media Matters and the Center for American Progress. These are high-profile operations, some with big budgets, that seek to influence the political debate in Washington.
A broader base of contributors
Similar efforts are under way in a handful of states, modeled after a Colorado coalition of wealthy donors who helped raise funds for state legislative races. Donors and strategists recently met in New Mexico to create interest in similar funding organizations to assist liberal and Democratic-leaning organizations at the state level.
The Rappaports and the New Progressive Coalition are looking beyond electoral politics. Their biggest "mutual fund" is Victory 2008 and Beyond, which finances groups that mobilize voters, train candidates and help elect liberal office holders. But it also has two other funds, one for organizations dedicated to expanding health care and another for environmental causes.
Instead of limiting the donor pool to wealthy donors, as the Democracy Alliance does, the coalition also hopes to tap into a broader base of contributors.
"NPC sees itself as the talent scout for the more entrepreneurial organizations," said Kristin Falk, the coalition's chief executive officer and a veteran of liberal fundraising and organizing.
She said large political organizations, many of them so-called 527 organizations that can raise large sums of money from wealthy individuals, rely on the same limited list of big donors.
"We're going for people who are not on those lists," she said. "We're going after individuals who don't consider themselves political donors."
Donors who want to give through the coalition can examine the portfolios of each of the three mutual funds and "invest" in one or more of them. The money is then distributed based on an allocation to each of the organizations in the fund.
Though the coalition is a for-profit venture, potential donors would pay no fee to invest in the funds.
Falk said the coalition staff received 129 applications from different organizations. Of those, 80 put themselves through a coalition evaluation designed to measure performance.
Jesse Lava, executive director and co-founder of Faithful Democrats, said his organization ended up on the coalition's mutual fund after an involved process that required digging up information about his group's strategy and track record as an organization of Christian Democrats.
"Their approach is sound," Lava said. "It makes a heck of a lot of sense, that's why I spent a lot of time to do it."
Other organizations on the coalition's Victory 2008 mutual fund include ActBlue, which is a conduit for online political donations, the League of Young Voters, 21st Century Democrats and Voter Action. Environmental groups include the League of Conservation Voters and the Vote Solar Initiative. Among the health care groups are the Campaign for America's Future and the Universal Health Care Action Network.