Republicans Flag Problems in Small-Donor Cash Crunch

Dubbing it WinRed, the Republican Party and the Trump campaign forced members of Congress and state parties onto the platform, and the threats if they refused weren't subtle: The RNC and other party committees would not back – and likely wouldn’t fund – recalcitrant campaigns at critical election junctures down the road.

The idea was for most, if not all, federal Republican candidates to consolidate around a single fundraising platform and marry the technology to the GOP's superior voter data repository, Data Trust, which is housed at the RNC. When melded with Trump's massive, small-dollar donor list, supporters promised a never-ending river of donations flowing to Republicans.

In doing so, they forced most Republicans off some trusted private fundraising platforms they had been using for years, creating lingering resentment over Washington's heavy-handed, top-down decree. The critics labeled the push a money-and-data grab antithetical to bedrock GOP free market principles.

But the proponents, many of whom stood to make a killing in profits with the new platform, promised a small-dollar windfall that would be reinvested in the Data Trust. The party pledged that those additional funds would help micro-target voters and boost Republicans' notorious get-out-the-vote disadvantage vis-a-vis Democrats' legion of union door-knockers.

Everybody in the GOP wins, the argument went – except, of course, the fundraising platforms suddenly losing candidates/customers they spent years cultivating and who were satisfied with their previous service.

Fast-forward five years, and very few of those promises have been fulfilled, according to Republican critics interviewed for this article.

In its first year of operation, WinRed and Trump's combined efforts had a good track record. Trump, for instance, amassed $626.6 million from small-dollar donors, 35% more than Joe Biden did during the 2020 cycle.

So far in the 2024 campaign, however, Trump can't count on such a significant small-dollar advantage to make up for Democrats' overall grassroots fundraising advantage. Last year, he raised just $51 million from small donors, less than half what he raised in 2019.

Meanwhile, ActBlue collected $959,627,475, nearly a billion dollars, in small increments through the end of February, compared to WinRed's $430,965,507 as of December of last year, the latest federal election records available.

The RNC says that large and small donations to entities supporting Trump have steadily risen since November when it became clear that he would be the nominee. They also point to the former president's April 6 Palm Beach fundraiser, which hauled in a record $50.5 million following Biden's star-studded event on March 28 in New York that brought in $26 million.

"We are not only raising the necessary funds, but we are deploying strategic assets that will help send President Trump back to the White House and carry Republicans over the finish line," Steve Cheung, the Trump campaign's communications director, said in an emailed statement.

Republicans privately acknowledge that they don't expect the RNC and the Trump campaign to amass as much money as Biden and the Democrats. The president didn't have a primary to compete in and spend money on, and Democrats can count on continued support from Hollywood and Silicon Valley. Nonetheless, Republicans hope to harness Trump's ratings and clicks to boost earned media and help strengthen the campaign in a way that dollars alone cannot.

The next Federal Election Commission filing deadline will provide a clearer picture, but many Republicans are on edge, angry that WinRed hasn't lived up to its hype and worried that leadership changes at the RNC and in the House and Senate will all contribute to a GOP money chase loss in a critical election year.

Josh Holmes, a longtime senior adviser to outgoing Senate Minority Leader Mitch McConnell, describes McConnell as a trailblazer in the brave new political fundraising world unleashed by the Supreme Court's Citizen United decision. Over the last decade, McConnell's super PAC, the Senate Leadership Fund, has raised $1.6 billion in large-dollar contributions.

"In the modern-day campaign infrastructure, McConnell was a pioneer in ensuring that you had a very robust outside entity that was able to supplement the efforts of committees and campaigns," he told RealClearPolitics in a recent interview.

McConnell and his team are focused on ensuring that the infrastructure remains as he exits the Senate leadership, Holmes said. There is a mix of large-dollar donors who give widely within the Republican Party and then some who are loyal to McConnell because he has a "well-earned reputation of always being the adult in the room when there are truly catastrophic problems – whether they be economic or otherwise."  

When it comes to small-dollar donations, however, Republicans are bracing for a big Democratic advantage despite Trump's renowned grassroots donor strength. With control of the White House, Senate, and the House on the line, the demands for new approaches are gaining strength.

Former Georgia Sen. Kelly Loeffler, who lost narrowly to Democrat Raphael Warnock in a 2021 runoff after being appointed to the Senate in 2019, views her loss as a result of Republicans' failed grassroots operations, both in fundraising and get-out-the-vote field work.

"In 2020, I saw what was happening with WinRed, and I experienced it firsthand,” Loeffler told RCP in an interview. “And four years later, we’re watching the impact of having shifted to a D.C. consultant-run centralized platform, as donations continue to decline for conservatives versus what we should be doing, which is what we believe in – free enterprise creating innovative technology that respects campaigns, candidates and donors.

"We're doing the opposite," she said. "We're driving donors away."

Loeffler isn't just complaining. She's using her wealth and experience in the technology industry to roll out RallyRight, a suite of products aimed at boosting GOP fundraising and turnout. It includes DonateRight, a donation processing platform intended to compete with WinRed; FieldRight, an app that locates canvassers for campaigns and verifies their work; and RelayRight, a texting tool.

So far, DonateRight has gained more clients at the state and local levels, with WinRed continuing its stranglehold on congressional campaigns. The platform was originally purchased from the powerhouse GOP fundraising firm Targeted Victory.

Loeffler said DonateRight has experienced rapid growth, processing seven figures and attracting campaigns in 26 states, as well as some federal clients who want to protect their data. And that's just in the first two months of the rollout. She also plans to continue investing in the products to build out GOP infrastructure without making a profit.

"We have campaigns across the country that need a trusted, secure, feature-rich, low-cost fundraising platform, and it's not being offered," she said. "I've built data companies. I've built payment companies. I've been in the technology world. We can do this for a fraction of the cost because we're not doing this for a profit. I've already made money in the private sector. My goal and mission in life is to support the conservative movement."

While WinRed has a virtual monopoly on federal campaigns, critics complain that it tried to raise its prices during last year's sharp downturn for small-dollar donations and contributed to grassroots donor fatigue by not securing its donors’ identities so other campaigns and firms could also target them. It also used deceptive practices, automatically opting donors into recurring payments. Numerous outraged donors demanded refunds, and some state attorneys general sued WinRed, which has since changed its practices.

"I'm doing this by providing tools to state and local campaigns – completely underserved market for fundraising at the local level," Loeffler said. "We're being used by federal campaigns that want to control the data, pay lower fees, and know that it's not going to WinRed."

Loeffler also tells RCP that she doesn't believe WinRed is following through on its pledge to provide some of its proceeds to the RNC's Data Trust, or else all of the profits have dried up with the sharp decline in small-dollar donations.

"Data Trust doesn't appear to have been enriched by this process at all," she asserted. "And it should have been when you think that more than a billion dollars has been processed through the platform, and [there have been] millions and millions in profit – $10 million in 2020. We should be talking about the robust data and analytics platform that is being built. Instead, we have a check-engine light that's on, and no one looking at the engine because the owners of the engine won't let people under the hood."

Gerrit Lansing, a former RNC staffer and one of WinRed's founders, didn't respond to an RCP inquiry. The RNC provided a general statement touting its uptick in fundraising but didn't respond to questions about Data Trust.

In 2019, sources familiar with WinRed's ownership breakdown told RCP that Lansing had a 60% stake in the company, with 40% going to Data Trust. Data Trust is a limited liability company that operates more like a nonprofit in that all of its profits are churned back into building a data repository.

"WinRed was specifically set up to fund Data Trust, which helps every GOP campaign in the country," Lansing said in a 2019 interview with RCP. "Democrats don't even have their own Data Trust, and they're having a huge battle over it now."

"The GOP just made a huge leap ahead in the party infrastructure battles over the Dems," he added. 

Loeffler doesn't blame Trump, whom she calls the most prolific GOP fundraiser of all time. Instead, she says campaigns need to have control of their own tools to generate fundraising opportunities.

Plenty of fundraising experts in the larger GOP sphere believe WinRed was working as planned in the 2020 cycle but argue that Trump's fundraising tactics burned through donor lists during his post-election efforts to fight the results.

The donor lists don't reside at WinRed but with individual vendors who rent them from each other and ultimately gather donor data, a senior GOP fundraising expert told RCP. Trump ultimately raised more than $100 million from small donors following the 2020 election, which helped pay for legal bills, but that gain may have come at bigger long-term price.

"What happened, there was just this frenetic push to just keep raising money post-election, for things like fighting the election results, which never came to fruition," the source said. "So, you had a combination of donor mistrust that developed there, and an even bigger problem when a bunch of unscrupulous vendors were sending 15-16 fundraising text messages a day."

Text messaging was a relatively new fundraising medium at the time, and vendors, some of whom make their money on a percentage of the fundraising haul, were blitzing previous GOP donors with aggressive demands. Some of the messages bizarrely threatened an individual's Republican Party membership; others labeled the prior donor a "traitor" if they decided not to pony up.

"That was a big, big problem," the source argued.

Others contend stronger forces are at play. In an effort to mimic Trump's success with small donors, other GOP elected officials hired fundraising firms to utilize similar text and emailing tactics that had worked in 2020. Those efforts meant the same reliable small-dollar donors were getting inundated with pitches mentioning Trump from dozens of candidates. Donors loyal to Trump and less to other GOP candidates were simply hitting unsubscribe on all the missives to stop the daily onslaught.

By 2021, the beginning of the 2022 congressional midterms, inflation was in full swing and the economic pinch hit small-dollar donors the hardest. Small-dollar donations were already naturally diminished because it was a midterm cycle, not a presidential year. Even so, Democrats managed to attain a significant edge in this realm.

One senior GOP digital strategist, who spoke to RCP on the condition of anonymity because of the sensitivity surrounding fundraising discussions this year,  argues the competition for small donors has become too crowded. After Trump's and others’ success in 2020, many GOP campaigns and consultants simply expect to get support from the same donors. They started hiring firms like his in greater numbers even though the Republican Party has done little to grow the pool of individual donors.

"The challenge is just the right has yet to match the intensity and depth of giving on the left," the strategist said. "Most people who begrudge it are the same people who stifle innovation by limiting dollars that go into things like prospecting and finding new donors and continue to only run traditional television at the end.”

He said the party also needs to focus on finding new donors, matching the Democratic Party's efforts with smaller, niche super PACs, such as those aimed at mobilizing Asian Pacific, women's, and youth turnout.

“We have super PACs that raise almost half a billion dollars but do no donor prospecting,” the strategist said. “More and more powers [are] accrued to fewer and fewer entities on the right. It has –  I would argue – drained the ecosystem from taking more chances.”

Another sore spot among Republican fundraising consultants is a study showing that Google Gmail is blocking Republicans' digital messages.

Nathan Leamer, the CEO of Fixed Gear Strategies who previously served as vice president at Targeted Victory, has said he and other Republican consultants have long suspected that many emails mysteriously end up in spam folders or are simply undeliverable.

During a House hearing with the CEOs of four big tech companies, Rep. Greg Steube pressed Google CEO Sundar Pichai on why his father and other supporters couldn't receive his fundraising emails even though they had physically opted in on his campaign website to do so. (Pichai replied that Gmail didn’t have the “context” to realize the campaign emails were being sent from son to father, not responding to the question of whether the email service had intrinsic bias against Republicans.) The Florida Republican's allegations that Gmail was biased against Republicans were lampooned on the left as a conservative conspiracy theory.

But in 2022, those skeptics got their proof. Researchers at North Carolina State University released a study confirming that spam filtering of major email providers, especially Gmail, demonstrated substantial political bias against Republican candidates in the months leading up to the 2020 election.

When it came to Gmail, most Democratic candidate emails were retained in the inbox, with less than 10% marked as spam, while a majority of Republican candidate emails were sent to spam folders, up to 77% in some cases. While email providers Microsoft Outlook and Yahoo didn't skew to the left, Gmail – the most popular email service in the United States, controlling 53% of the market share – exhibited a dramatic political bias.

The study didn't find that Google was purposefully embedding a bias against Republicans in its algorithms, but Republicans harbor deep suspicions. The roundly ridiculed Google Gemini image generator, which the company was forced to overhaul after it showed depictions of black Nazis and a woman pope, further underscores GOP consultant concerns with Gmail's spam practices.

"Google Gemini AI just gave us a snapshot of the interior of how these entities think," Leamer said. “What they don't perceive as bias is actually bias sometimes."

When it comes to blocking GOP emails, the bias amounts to a de facto tax on Republican candidates, who are forced to spend more resources in response. Leamer estimates the impact equates to hundreds of millions of dollars in lost fundraising revenue and other political communications that impact elections, such as get-out-the-vote efforts.

The documented disparities should fuel greater scrutiny from election watchdogs, Leamer argues.

"If one party's TV and radio ads were stifled, there would rightfully be inquiries," he wrote in a piece on Medium. "The spam filtering bias by Gmail should be no different."

Even for some GOP activists, the sheer number of emailed fundraising pitches that do get through has saturated inboxes so much that they simply ignore all of them. John Feehery, a longtime Republican communicator, says he's seen a dramatic surge over the last five years in fundraising pitches he receives – so much so that it's a challenge to simply find emails he wants to read.

"I would say 75% of the emails I get and 40% of the texts I get are campaign fundraising appeals, and I just ignore them all," he said.

The emails are just one of several factors contributing to the slowdown in grassroots donations, Feehery argues.

"There are concerns that the money [raised] is going to pay for [Trump's] lawsuits, and there's a bad economy – Biden inflation is hurting Trump with donors and small donors," he said. "It really is that basic."