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Big problems with small money? Republicans catch up to Democrats in online giving

For the first time in modern history, both parties are growing reliant on — and beholden to — their online constituents.
Image: A man points towards the stage ahead of former President Donald Trump's appearance at the Rally To Protect Our Elections conference on July 24, 2021 in Phoenix.
A man points toward the stage before former President Donald Trump's appearance at the "Rally to Protect Our Elections" conference in Phoenix on July 24.Brandon Bell / Getty Images

WASHINGTON — Republicans are beginning to catch up with Democrats in online fundraising, creating for the first time in modern history a political landscape where both parties are largely funded by small donations — for better or, some say, for worse.

Democrats, who have dominated online fundraising since the early days of the internet, have claimed that the billions they raise in small donations are evidence that they are the party of the people, less reliant on wealthy donors and business interests than the GOP.

Republicans have spent years playing catch-up, mostly unsuccessfully. But now, just in time for the 2022 midterm elections, they are starting to pull even, thanks in large part to former President Donald Trump and his army of online devotees.

“This is the harvest of the seeds of digital infrastructure Republicans have been planting for years,” said Matt Gorman, a GOP strategist who worked for the party’s congressional campaign arm during the last midterm election. “That's why you’re seeing things like freshman members of the House raising over $1 million (in a single quarter). In 2018, we were begging folks to raise a fifth of that.”

Even out of office, Trump continues to raise massive sums of money, largely online. He announced Saturday that his political groups had collected nearly $82 million in the first half of the year (a total that includes transfers from other committees), giving him a war chest of more than $102 million.

In the last quarter, the GOP’s three main party committees raised nearly identical amounts as their Democratic counterparts in small donations.

The Republican National Committee, the National Republican Senatorial Committee and the National Republican Congressional Committee together pulled in $77.65 million in donations of less than $200 in the quarter that ended June 30, compared to Democrats’ $77.7 million for their corresponding groups.

Each sum accounted for an identical share, 57 percent, of the committees’ take from individual donors, according to an NBC News analysis of campaign finance reports.

Leveling the playing field

The fundraising totals are thanks in part to WinRed, which was created by Republicans in 2019 and is their version of Democrats’ ActBlue.

Like an Amazon for causes and candidates, the platforms streamline the giving process by saving donors’ credit card information to allow for one-click contributions, providing a central hub for the parties and their allied groups.

ActBlue has processed nearly $8.9 billion in donations since its founding in 2004. Republicans had fought for years among themselves over how to create an alternative and who would run it. It finally happened two years ago, when Trump and his allies pressed party bossesto coalesce behind one platform ahead of his re-election campaign.

Building on the foundation of Trump’s unusual-for-Republicans success in online fundraising, WinRed has helped raise $2.3 billion for GOP candidates since it launched, with an average contribution of about $50.

“Republicans would always lose small-dollar donations. Now we win, or do very well, because we are the Party of Working Americans, and we beat the Democrats at their own game,” Trump said in April. “We learned from liberal ActBlue — and now we’re better than they are!”

Or as Gerrit Lansing, president of WinRed, told Fox News, "The good guys have leveled the playing field of online fundraising.”

The money could be critical in next year’s midterms — and beyond.

Small donors are especially valuable to the GOP as they try to fill the void left by the Republicans’ traditional allies in corporate America after many businesses announced that they would withhold contributions to Republicans who voted against certifying President Joe Biden’s election on Jan. 6.

Meanwhile, as the GOP has grown increasingly populist under Trump's leadership, it has become more hostile to corporate power, so once-loyal allies like the U.S. Chamber of Commerce have begun to hedge their bets by supporting Democrats as well as Republicans.

Campaign finance laws give an advantage to raising lots of small donations instead of big checks from wealthy individuals, because donations are maxed out at $2,900. And although wealthy donors can write big checks to outside groups like super PACs, those groups have to pay steep prices for television advertising, typically the biggest expense for any campaign, diluting the power of each dollar.

Democrats still have the edge, having spent nearly two decades cultivating a culture of online giving. ActBlue took in $289 million last quarter, compared to WinRed’s $131 million.

“Small-dollar donors are deepening their investment and propelling grass-roots movements forward like we have never seen before,” said Erin Hill, the executive director of ActBlue.

‘Fires of polarization’

For the first time, both parties are increasingly funded by, and beholden to, their online bases.

While small dollars tend to be romanticized — Democrats’ voting rights bill includes provision to encourage such giving by matching $6 in public funds for every $1 in small donations — some see a big downside to empowering small donors, who tend to be the most ideological and online.

“The same dynamics that fuel virality on social media in general also apply to small-donor fundraising,” said a leading scholar of democracy. Rick Pildes, a constitutional law professor at New York University.

“The more extreme appeals, the more extreme candidates, the candidates who have the highest profiles because they're dominant presences on social media or on cable news tend to attract and rely most heavily on small donors,” he said. “There's a real risk that the rise in small-donor fundraising will throw further fuel on the fires of polarization that are burning so strongly.”

Research has shown that people who give online are more ideological than the general public and that more ideologically extreme lawmakers raise larger proportions of their campaign coffers from individual donors.

In the first quarter of this year, for instance, the member of Congress who raised the most money from small donors was Rep. Marjorie Taylor Greene, R-Ga., according to the transparency group Open Secrets, thanks to a flood of donations around the time she was kicked off her congressional committees for inflammatory and conspiratorial rhetoric, notably about fictional Jewish space lasers.

The second-best-performing House candidate among small donors was Rep. Alexandria Ocasio-Cortez, D-N.Y., a lightning rod for progressive supporters. Also on the top-10 list were Republicans Reps. Matt Gaetz of Florida, Jim Jordan of Ohio and Dan Crenshaw of Texas, some of Trump’s most flamboyant allies on Capitol Hill, who excel at courting controversy.

“This is the rise of politics as performance instead of governance or legislation,” Pildes said. “Candidates know that if they can successfully stoke this culture of outrage, that is likely to open the spigot of small donations.”