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The Political Edge: What Is ActBlue And How Does It Work?

ActBlue, the fundraising platform for Democratic candidates and left-leaning groups, played a significant role in the 2018 midterm. The group helped Democrats raise $1.6 billion from 4.9 million unique donors in the 2018 cycle, giving liberal candidates an upper hand in fundraising.

ActBlue will no doubt play a major role in 2020. However, for many in the political world, the group remains mysterious. How does ActBlue operate and how is it financed? How did it impact the 2018 election and what are some stories to keep an eye on the next two years?

We’re changing things up in this week’s Political Edge by providing an in-depth research analysis of this growing force in politics.

What Is ActBlue And How Does It Work?

ActBlue is a fundraising platform designed to allow grassroots donors to easily give to Democratic candidates. It operates as a federal PAC that passes contributions through to other committees or candidates.

  • Any Democratic candidate or left-leaning organization can use ActBlue’s tools to raise money. However, ActBlue itself doesn’t fundraise for any candidate, it just processes and forwards individual contributions.

  • In order to start fundraising through ActBlue, a candidate or organization creates a contribution form on their website. That candidate or organization then asks supporters to make a contribution on the form (through a fundraising email, an ask on their website, at an in-person event, etc). When the supporter makes a contribution on their form, ActBlue processes the contribution and sends it straight to the candidate or organization. ActBlue then reports the contribution to the relevant reporting body (like the FEC, IRS, or your secretary of state).

  • ActBlue itemizes (i.e. lists the donor name & information) every single federal donation that comes through their platform, including donations under $200. Contributions made through ActBlue are not considered to be PAC donations but rather are treated as individual contributions which the group then processes/transfers to the campaigns and organizations that use their fundraising platform.

  • CNN: “ActBlue occupies a unique space on the political landscape, serving as a one-stop giving vehicle for virtually every candidate and organization on the left. More than 14,800 groups and candidates use the platform.”

How Does ActBlue Make Money?

Unlike a for-profit company, ActBlue doesn’t make money off of contributions. They instead allow individuals to add an optional “tip” on the contribution form that goes directly to ActBlue itself. According to the group, these “tips” are the organization’s primary source of revenue.

Nearly 100% of an individual’s contribution through ActBlue goes directly to the candidate. ActBlue charges candidates/organizations a 3.95% credit card processing fee on each contribution that they pass along. According to ActBlue, they do not profit from the processing fees.

ActBlue also runs their own fundraising campaigns by sending out emails that “are clearly branded as coming from ActBlue and not a candidate.” The money raised through their own fundraising program goes to helping improve and grow their tools.

NOTE: ActBlue claims they do not share email addresses with anyone other than the campaign or organization to which individuals give.

The ActBlue Advantage

In addition to providing Democratic donors with a one-stop site, ActBlue allows them to store their credit card numbers and, with one click, donate to virtually any Democratic candidate or liberal cause through a process called ActBlue Express, which the group says has 5.8 million users.

  • CNN: “Nearly 6 million users maintain ‘express’ accounts that store donors’ payment information and addresses, making it easier to donate to multiple candidates over an election cycle.”

Who Started ActBlue And Who Manages It?

ActBlue was founded in 2004 by two friends (Matt DeBergalis and Ben Rahn) and is based in Somerville, Massachusetts.

Erin Hill currently serves as the executive director of ActBlue

  • Hill: “Small-dollar donors are going to pick the Democratic nominee [in 2020].” Because of the “unprecedented volume” of online money expected to flow to Democrats in 2020, Hill said she expects ActBlue to double its staff of 100 over the next two years.

ActBlue Facts

2018 Midterm Impact

ActBlue said it helped raise $1.6 billion from 4.9 million unique donors in the 2018 election cycle, including money it collects for interest groups and state candidates. The average donation was $39.67.

  • Donations flowed through ActBlue to 14,820 different Democratic candidates and causes in the 2018 cycle.

  • 8% of donors in the 2018 cycle were first-time givers on the platform. 37.3% of total dollars came from first-time donors.

  • Grassroots donors made 41,352,999 contributions on ActBlue in 2017 and 2018.

ActBlue funneled more than $700 million in small donations to House and Senate candidates over the course of the 2018 campaign.

  • In the battle for the House, 54.9% of dollars from individual contributions to Democratic candidates came from through ActBlue, and that figure was 61.3% for the Senate.

ActBlue Has Grown Every Election Cycle

When it was founded in 2004 (during President George W. Bush’s re-election campaign), ActBlue processed less than $1 million across all federal races. In 2006, it processed $16 million. By 2016, it had hit nearly $695 million before nearly doubling to more than $1.2 billion in the 2018 election.

  • ActBlue boasts that it has raised more than $3 billion since its founding in 2004.

Implications

Out-Of-State Donors Are Potentially Influencing Elections

From January 2017 to October 2018, 57% of dollars directed to congressional candidates via ActBlue went to out-of-state races.

  • During that same time period, donors in California and New York combined to contribute roughly one-third of the dollars that flowed through ActBlue to House and Senate candidates.

  • Donors from Texas give the third-largest amount to Democratic congressional candidates via ActBlue — slightly more than 8% of all the money going to congressional candidates through the platform.

ActBlue Helped Democrats Outraise Republicans In 2018

The New York Times: “Individual Democratic candidates for House and Senate seats outraised their Republican counterparts overall, $1.4 billion to $880 million and a significant portion of the difference can be attributed to small donations whose impact has increased significantly.”

  • The New York Times: “Overall, Democratic candidates in the general election collected nearly $296 million in small donations, more than three times the $85 million collected by Republicans.”

GOP Challenge: Creating An ActBlue “Counterweight”

While ActBlue is a nonprofit, Republican efforts at collecting small-dollar donations are fragmented among for-profit processing vendors. Republicans have several online fundraising platforms, including Revv, Victory Passport and Anedot but the party has not consolidated around any of them the way Democrats have with ActBlue.

  • In 2017, NRCC officials undertook a project to examine how ActBlue functioned and whether it could be replicated, but the team determined that reproducing it would be difficult in a short period of time.

  • In July, the Republican Jewish Coalition, an organization partly funded by Sheldon Adelson, launched an ActBlue-like portal inviting supporters to give small donations to a list of endorsed candidates. The effort generated about $400,000 in contributions, an indication to its proponents that conservative small donors could be drawn to such a platform.

According to Josh Holmes, a top McConnell political adviser, an ActBlue counterweight would require buy-in across the splintered Republican Party groups and the processing vendors.

  • Gerrit Lansing, the founder of Revv, said it would be technologically difficult to share information among the three most frequently used processing vendors because they use different payment platforms.

Sources

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