SOMERVILLE — Confetti strings still hung in the air in the office — left over from the balloon drop to celebrate processing yet another billion dollars — as the Democratic fund-raising platform ActBlue became a subject of Republicans’ post-midterm frustration.
The 98 employees at the Somerville-based nonprofit had even more to celebrate: Democrats won more than 30 House seats and blunted losses in the Senate, and ActBlue had processed $706.7 million in small-dollar donations for the party’s congressional candidates. This little-known organization is so successful it’s become a target for Republicans who want to copy it.
The bounty from online donors that Democrats collected using ActBlue’s tools helped power the party’s cash advantage in the midterm elections. All told, the nonprofit says, 4.8 million donors used its tools to give a staggering $1.6 billion to thousands of Democratic candidates and left-leaning organizations during the 2018 election cycle. The average donation? $40.
Some Republicans have darkly suggested — without evidence — that the organization’s methods were shady or illegal. One derided it as a “group in Massachusetts” — as if that said it all. But when Election Day was over, Senator Mitch McConnell, the Republican majority leader, was among the GOP leaders and party strategists saying they desperately needed to figure out how to compete with Democrats and draw more online small-dollar donations for their candidates.
“If they don’t, they won’t be around in the majority any time soon,” said Representative Tom Cole, an Oklahoma Republican and former chair of the National Republican Congressional Committee.
Employees at ActBlue, which is housed unobtrusively in a brick building in Davis Square, slyly suggested it would not be so easy for Republicans to replicate what they have built since the company was founded in 2004.
“I’m not interested in helping them kind of figure that out, but it’s not just a tech problem,” said executive director Erin Hill. “It’s really exciting to see the world wake up to that, and to see the results of what all these small-dollar donors did.”
Born out of the online activism among Democrats that popped up around the 2004 presidential campaign, ActBlue is now part of the fabric of the party’s fund-raising: 14,500 campaigns and organizations used it in 2018, the organization says. Republicans know it works, and, despite their own strengths with billionaire donors and political action committees — and President Trump’s ability to draw small-dollar donors — they can barely contain their envy of the Democrats’ centralized system for donors to send cash directly to candidates in races around the country, and so much of it.
“We’ve seen millions of dollars raised in congressional races almost overnight from what have been seemingly unknown candidates,” said Corey Lewandowski, a former campaign manager for Trump. He expressed confidence Republicans would find a way to do it themselves — though he, like other Republicans interviewed for this story, was unsure what that method would look like.
Here’s how ActBlue works: It offers, to put it simply, an online toolbox that quickly processes political donations. The organization allows Democrats up and down the ballot, as well as progressive organizations and committees, to set up fund-raising pages, which they use to spread the word about themselves. It processes credit card payments from donors and either wires the money or sends it by check directly to campaigns, which can spend it as they like.
Often, multiple candidates in the same primary contest will use its tools. The group stays out of internecine party fights, and does not have preferred candidates. Nor does it raise money directly on behalf of anyone. In other words, it offers Democratic candidates a piggy bank to fill, and leaves it to individual donors to decide how to spend the money.
In the 2018 election cycle, Democratic enthusiasm was turbo-charged by opposition to Trump, and ActBlue processed more donations than ever. Many donors stored their credit card information with the organization, which allowed them to donate to one Democrat after another — say, Beto O’Rourke in Texas, and then Abigail Spanberger, who won a close House race in Virginia — with only a few clicks. And many of those same donors are expected to come back in 2020.
“They’ve taken advantage of a high-enthusiasm cycle in a way that will benefit their party for decades to come,” said Josh Holmes, a Republican strategist and former aide to McConnell.
The nonprofit group was founded in 2004 — the same year as Facebook — by a physicist, Ben Rahn, and a computer scientist, Matt DeBergalis, who had turned to the frontiers of election technology after an unsuccessful run for Cambridge City Council the year before.
At the time, politics and the Internet were colliding in new ways. Howard Dean, the Vermont governor, had experimented with online fund-raising during his unsuccessful campaign for president. And outlets such as the Daily Kos were building online communities of progressives. But there was no simple way for them to pool their resources.
“When a blog endorses 12 candidates, and the ask of the readers is to go to 12 websites one at a time, and it’s 2004 — these aren’t the most advanced digital experiences,” said DeBergalis, now chairman of ActBlue’s board. “Politics has always been challenging. It’s more complicated than purchasing a book online. It shouldn’t be more complicated than that.”
The organization grew slowly. ActBlue processed a little less than $1 million in its first year, Hill said, and has been growing every election cycle since 2012. It processed its first $1 billion in 2016 and now has exceeded $3 billion.
Part of what makes ActBlue unique — and so successful, some would say — is its nonprofit status. There are gobs of money to be made processing political donations and building lists of donor data, but ActBlue is funded mostly through tips and donations. It takes 3.95 percent of donations for transaction costs, like credit card fees. ActBlue leaders are well-paid, with salaries in the low six-figures, and its tax returns show executives have received annual bonuses or incentive compensation ranging from $20,000 to $80,000 in several recent years.
The approach stands in contrast to online fund-raising for Republicans, which is done through a number of competing platforms. That means, Holmes said, that they do not share information or tactics, and the system is not as centralized.
“It’s not good when you’re unable to share donor info in a way that lifts all candidates,” said Holmes, the Republican strategist. So, as Republicans try to find some kind of equivalent, “there’s going to be a request for some altruism, too, for the betterment of the Republican Party.”
Last year, the National Republican Congressional Committee began a project to study ActBlue to see if it could replicate its success. Some Republicans, however, cautioned against overstating the role of any one particular tool or approach.
“The tactics used by ActBlue need to be studied, but the Trump campaign is already doing many of those things as or more effectively,” said Charles Spies, a Republican lawyer for campaigns and super PACs. “The bigger issue than any tactic is messaging. That’s what inspired people to give.”
What’s more, support from out-of-state donors using ActBlue does not necessarily propel candidates to victory. Donors used ActBlue to send $45 million to O’Rourke’s ultimately unsuccessful campaign to defeat the Texas Senator Ted Cruz, according to one analysis. And ActBlue said donations through its platform spiked after Heidi Heitkamp announced she would vote against confirming Justice Brett Kavanaugh, but she lost her North Dakota Senate race.
Still, ActBlue’s leaders says they have never worried about donors giving to candidates who will not win. The point, they say, is to empower donors to give to any Democrat, and to offer the same fund-raising tools to little-known challengers and political stars alike.
“It lowers the barrier for entry for who can run for office,” Hill said.
Dean, who also once served as chairman of the Democratic National Committee, said ActBlue’s success is a harbinger of a broader shift within the party.
“This is going to be a much more decentralized party,” Dean said.
Many ActBlue employees view themselves not as partisans for any particular candidate, but as technologists embroiled in the nitty-gritty of the fund-raising machinery. The open-plan office is stuffed with desks and tangled cords. Company lawyers parse campaign finance laws for each state, and the reports ActBlue files with the Federal Election Commission are so large they sometimes crash the agency’s website. ActBlue engineers focus on making donating ever faster, and preparing the system for the next surge.
“We’re always making sure that we’re ready for whatever happens,” Hill said, “because we don’t know what that’s going to look like.”