Voting With Credit Cards: The Growing Importance Of Recurring Contributions In Politics

About 62% of incumbent senators and governors ask for recurring donations on their campaign websites. As the importance of small individual donations rises, candidates seek to offer donors a range of ways to contribute. Subscription-style donations are one of those ways.

We Americans live in an age of political polarization. And in an environment of heightened partisanship, more and more Americans are becoming politically aware and engaged — and are donating substantial sums to candidates they favor. In fact, for some candidates, support from individual donations is a point of honor. For example, see this Daily News article on celebrity New York State gubernatorial candidate Cynthia Nixon: Cynthia Nixon brags about raising more small donations in a day than Gov. Cuomo has in 7 years.

It’s a trend that covers the entire nation. Take a look at this research from Pew, covering 1992-2016, showing the percent of Americans who said they made a political donation over the preceding 12 months.

Source: Pew Research Center

In the data above, look at how candidates rather than parties and other groups ar leading the way in this. The personalization of politics is key here, and individual supporters are identifying — and forming relationships — with candidates rather than parties.

That personal relationship, nurtured through email contacts and social media, in alignment with strong feelings of identification and loyalty, should sound familiar to readers of this column. In a high-engagement, continuing relationship, whether with a brand, with a nonprofit, or with a political candidate, individual fans and supporters become “subscribers” to the relationship. I wrote about that late last year: Delivering Donations: How Nonprofits Can Use Subscription Marketing to Build Recurring Revenue.

For a product, say a magazine or a cosmetics box, the fans know that they are subscribers. In a recurring payment relationship with a nonprofit, whether that’s PBS or the Catholic Church or the World Wildlife Foundation or Donald Trump, individual supporters don’t necessarily think of themselves as “subscribers,” but for our purposes, they certainly are.

That means these organizations can take advantage of the advances in recurring revenue generation that commercial enterprises have developed. And more and more political candidates are offering the option to a growing number of engaged citizens who want to vote with their wallets as well as with their ballots.

In an August 2017 article at CMDI, a GOP-aligned solutions provider, Adrienne Royer has more Pew data on this trend:

  • Donations to individual candidates doubled. Since 1992, the number of Americans donating to an individual candidate doubled from 6% to 12%.

  • Political party donations more than doubled. While not as big an increase, the number of Americans donating to a political party increased from 4% in 1992 to 9% in 2016.

I looked for hard data on candidates using recurring revenue, and I just did not find it. So I put on my investigative reporter’s hat and did some web surfing. I visited the campaign websites of all 100 sitting senators and all 50 incumbent governors in the United States. I thought about also cataloging the 400 reps in the House, but there are only so many hours in the day. For the 150 politicians that I surveyed, I looked at their donation options, logged if they allow recurring donations online, if they put the option front and center or if they bury it, and who powers their donation payments. The results show that while many politicians are moving to a subscription model, this is very much a trend in motion.

Consider the basic question: Does the politician have an online option for recurring donations? Here’s the aggregated data, and the breakdown for senators and governors:

American National Election Studies)

There are interesting differences when you look at party breakdown. Democrats are much farther along in using recurring revenue than Republicans. While 59% of Republican senatorial campaign websites offer a recurring donation option, 90% of Democratic senatorial campaign websites do. Among governors, 36% of those in the GOP and 47% of Dems offer the option.

Source: Subscription Insider

I also looked at where the subscription option was located on the site. Some put the recurring donation check-box front and center; others bury it towards the end of the donation process.

Source: Subscription Insider

You may think, OK, 38% of incumbents are not running for re-election, or they are not tech savvy and have not upgraded to a recurring donation model. That’s understandable. But why do 31% — half of incumbents offering a recurring option — bury the “Donate Monthly” option? After all, recurring revenue is the bees’ knees, and everyone wants subscription revenue, right? Well, sorry to say, Subscription Insider fans, but politicians have reasons to hesitate.

First of all, recurring revenue has a bit of a bad rep among some consumers. Some candidates have continued to charge recurring donors after the election is over, even if they lost. That’s what happened with this worst-case story in the LA Times about the Hillary Clinton campaign:

  • As with all customer-service horror stories, this speaks to an institutional failure and an inability to treat those you count on – in this case, voters – with appropriate courtesy and respect. The Clinton campaign’s shortcomings are no different from a business forcing customers to navigate a complex phone tree and then being kept on hold for a half-hour (or longer).

For a bit of journalistic equal time, here’s a similar article from Snopes about how hard it is to cancel recurring donations on the Trump website.

The LA Times article points out that this level of poor service is unusual, but on the other hand, TrueBill (a service for managing subscription payments) felt it happened often enough to merit a blog post, How to Cancel Recurring Campaign Contributions.

Second, those who donate regularly are much less receptive to further donations later. Writing at the WidgetMakr blog, Elise Kostial explains it this way:

  • Recurring donors rarely give donations in addition to their recurring contributions, so campaigns shouldn’t rely on these donors if they suddenly need funds. Single gift givers are more likely to give larger contributions in future years, but donors usually don’t switch between giving recurring and single contributions.

So it is possible that politicians prefer the soft sell approach. They may also prefer to keep a reserve of one-time donors who can be reliably approached for donations when funds are desperately needed — say for a last-minute TV advertisement or direct mailing.

I also took a look at the vendors that “power” the donation process for campaign sites. Here they are from most used to least, with the numbers reflecting how many campaign websites use the service among those politicians I researched. The colors reflect the party affiliation of clients, with blue representing Democrats, red Republicans and purple a mix of clients.

Source: Subscription Insider

Note: The n/a category includes incumbents who have no campaign site, or who do not ask for donations, or who do not reveal the provider online.

The remarkable story here once again is a difference between parties. On the Democratic side, ActBlue, a partisan nonprofit, dominates blue candidates. On the Republican side, a range of for-profit vendors competes for GOP candidate business.

ActBlue was the subject of an excellent analytical report in the New York Times, How ActBlue Became a Powerful Force in Fund-Raising.

  • ActBlue has led the movement toward small online political donations. As much as any other organization, it has made such donations easy and common … In 10 years, more than $619 million has passed through the start-up on the way to Democratic candidates and causes. For comparison, over the same period, the August Democratic National Committee brought in a total of $1.4 billion.

ActBlue has been willing to do research, to experiment, and to be transparent in reporting on all of that. Per the Times article:

  • ActBlue regularly runs randomized experiments to increase the efficiency of its donation forms. Among its findings: Women are more likely than men to be recurring donors. … many nonprofits ask donors to make recurring contributions on a monthly basis, and political campaigns have picked up on the tactic. ActBlue started with monthly donations, but in the final weeks before the election has offered a weekly donation form option.

On the Republican side, the providers serving the most incumbent senators and governors are DonorID/Anedot, Victory Passport, and Revv. These have not been as media savvy about sharing data, and the press has been a bit mixed — but I’ll leave the googling to the interested reader.

Insider Take

As more and more politicians seek to establish their populist cred, they are looking for ways to engage with smaller donors. Although sitting Republican senators and governors are lagging the recurring revenue trend, it is clear that politicians of every stripe are seeing the value in convincing supporters to donate regularly.

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