In life, they say you get what you pay for. That is no less true in
politics, which is fueled by campaign donations and lobbying dollars that move
policy on every important issue under the sun. The disclosed expenditures of
the DC lobbying industry are more than $3 billion per year, while just the
presidential political campaigns spent more than $1.5 billion in 2016.
Despite the key role
that money plays in American politics, almost no one actually donates to a
political campaign. According to the campaign finance watchdog OpenSecrets,
just 0.68% of American adults donated more than $200 throughout the 2016
campaign cycle.
A $200 contribution
may sound like an extraordinary sum, but it’s roughly $8.33 per month
throughout the two-year election cycle. Compare the 1.67 million people engaged
with politics against the subscription numbers elsewhere in the economy: The
New York Times is approaching 3 million digital subscribers while Spotify and
Netflix had 70 million and 118 million subscribers respectively in January this
year.
Watching House of
Cards is certainly more fun than funding the real House of Cards, but the lack
of engagement from voters in the money side of campaigns has serious,
deleterious effects. As The New York Times pointed out, just 158 families
donated roughly half of the early dollars in the 2016 election, giving this
remarkably small sliver of the American people extraordinary influence over the
course of policies that affect all of us.
Unsurprisingly, the
report cards for political institutions remain near their historical nadirs in
the United States .
Gallup polls
show that just 15% of Americans approve of the work that Congress is doing, and
cynicism increasingly runs rampant about the government’s ability to improve
the quality of life for citizens.
At their heart,
political campaigns are no different than any other organization: they need to
raise revenues and then spend it to meet their objectives. Organizations are
responsive to who pays them, and therefore, the only way to connect politics
back to the everyday lives of people is to connect more pocketbooks of voters
directly into the revenue model of DC.
Lawrence
Lessig, in his book Republic, Lost, believed such a system would likely
tamp down the passions that exist in the present system. He wrote, “Yet in a
system that was exclusively a small-donor system, candidates could not afford
to fund their campaigns from the extremes only. Instead, with, for example, a
voucher system, they would need to reach a much wider range of citizens. That
breadth would preclude extremism. Like a mandatory voting system, a
small-donor-funding regime would put constant pressure on representatives to
hew to the mainstream.”
Small donations have
become popular on both the left and the right. Bernie Sanders raised tens of
millions of dollars from donors giving less than $200, and Donald Trump has
effectively leveraged his various platforms to drive Republicans to the highest
small donor numbers in the party’s history.
Yet, it’s not just
small donations that are needed, but reliable streams of small donations, so
that politicians could start to transition from dialing-for-dollars
around-the-clock to actually doing the actual work of politics. It’s the
difference between selling songs one at a time, and a subscription service that
has dedicated customers paying every month. In short, it is SaaS, but for
politics.
That’s where startups
like GiveMini become interesting. GiveMini, the product name of Progressive
Labs, was started by Joel Aguero as a progressive-focused platform to help
people donate their spare change to progressive candidates. Inspired by apps
like Acorns and Digit, which help users save money for retirement, GiveMini’s
algorithm looks at your credit card transactions using Plaid, and then rounds
up each transaction to a whole dollar, aggregates all this change, and sends
the check to a campaign.
In others words, it is
change for change.
“All of these little
purchases are small acts of civil engagement,” Aguero explained. His model
works as follows. The average person has 32 transactions a month, and his
rounding algorithm averages about 45 cents for each of those transactions. That
comes out to about $14.40 a month, or just shy of $350 across a two-year
election cycle. GiveMini scrapes a fee of 10% to cover its costs.
The typical victorious
congressional campaign spent $1.3 million, so if campaigns could sign up about
4,200 people for the entirety of an election cycle, they could cover all of
their costs without resorting to tapping high-net-worth individuals at all.
Aguero, who studied
product design at Stanford, worked at such startups as Coursera and Nextdoor,
as well as corporate behemoth Palantir. The 2016 election was a surprise to
him, and he decided to find new ways to engage in politics using his background
as a product designer. He was inspired by Bail Bloc, a cryptocurrency miner
developed by The New Inquiry that generates money for people who couldn’t pay their
court bail. “What if we did that, but for progressive political campaigns,”
Aguero asked. He proceeded to build a prototype over the next few months that
would become GiveMini.
The platform targets
progressives, which as a term doesn’t necessarily mean any Democrat. Its
website says that “GiveMini is for progressives. This includes many Democrats
and Independents, and potentially some Republicans. We assess fit on acampaign-by-campaign basis and reserve the right to cease support for any
campaign, candidate, or individual at any time.”
The platform has built
its first partnership with the campaign of Bryan Caforio, a Democrat running in
California ’s 25th congressional district,
which is located to the north of metro Los
Angeles and is currently represented by Republican
Steve Knight. “They are really excited about it because normally small donor
donations go after existing supporters, and this has the potential to unlock an
entirely different subset of donors,” Aguero said. As the 2018 election heats
up, “I’d like to get 100 campaigns on the platform by summer,” he said.
GiveMini has joined the most recent batch of Higher Ground Labs, which bills
itself as an accelerator for progressive startups.
One hundred campaigns
is an ambitious target in an industry where the idea of small dollar
subscriptions remains anathema. Candidates, particularly those running for
national office, need to prove that they can raise large checks from largedonors early on to be “viable,” in what is commonly known as the money race.
Strong early money will often be leveraged with additional campaign committee
dollars from DC, making it of critical importance to electoral success.
Aguero understands
that success around these new models of campaign financing may not pan out
right away. “We have to be intentional about who we can really support and make
sure it is a positive experience for them,” he said. “If we can walk out of
this with some really compelling case studies, even if they are not very
favorable,” then GiveMini will have met its goals.
Long term, Aguero
hopes that “we can build an open source model among progressive campaigns.”
He’s also not limiting his focus to politics, but hopes to include relevant
non-profits on the network in the future, saying that “A lot of the lessons we
take from politics can be applied to the non-profit world as well.” He thinks
non-profits could be an important opportunity in the downtimes between
elections.
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