Tech takes over political fundraising

Small-dollar political donations have exploded this campaign cycle, thanks in large part to technology that makes it possible for candidates to target potential donors with cheap ads and easy-to-use online donation platforms.

Why it matters: A surge in fundraising for contributions under $200 has expanded the 2020 election field, propelling lesser-known candidates to the debate stage and political stardom.

• It has also brought more Americans into the political donation process than ever before.

Driving the news: Alexa is going to let users donate to presidential campaigns, Bloomberg reports. Amazon has invited all 2020 U.S. presidential candidates to sign up to receive donations through its voice software, although it's unclear at this point which campaigns will participate.

• According to Bloomberg, Amazon will let campaigns sign up to receive voice donations starting at just $5, and will process up to $200 per donor for each campaign, which is a much lower limit than on most digital platforms.

Our thought bubble: It‘s a big deal because it would be the first time ever that candidates could solicit donations through highly-accessible voice technology. About one third of Americans use voice assistants today, with Alexa being the most dominant technology.

Yes, but: It's not just voice technology, which is still new to the political game. Where the real change has been happening over the past three cycles, and increasingly over this presidential cycle, has been on Google and Facebook, as well as with online fundraising software.

• Experts on digital advertising anticipate that well over $1 billion in digital ads will be spent on Google and Facebook alone this presidential cycle.
• Most of that spending will be geared toward soliciting small-dollar donations from voters early, so that candidates can try to reengage them for larger donations later.

Online fundraising platforms, like ActBlue for Democrats and now WinRed for Republicans, will also be key to driving small-dollar donations.

• ActBlue, a payment processing software used by most of the major Democratic presidential candidates, has pioneered small-dollar donations and donation tracking. It helped boost Bernie Sanders' campaign against Hillary Clinton in the 2016 Democratic primary.
• WinRed, the Republicans' version of ActBlue, launched in July with the backing of President Trump’s re-election campaign and Republican party leaders to help the GOP catch up with Democrats.

"There is a revolution happening with online fundraising because it is easier than ever for candidates to target the exact right people who will be most receptive to their message. At the same time, platforms like ActBlue are so widely used that the barrier to entry for online giving is almost nonexistent."

By the numbers: At least 2.4 million people have given to the campaigns of major Democratic presidential contenders during the first half of 2019, per an analysis of campaign finance data by the Center for Public Integrity and FiveThirtyEight. The data analyzed ActBlue figures that were reported to the FEC.

• They gave about $209 million to the candidates — over 70% more than the amount that individual donors gave to candidates from both parties last cycle at the same point in 2015, per the report.

• The same thing is happening on the Republican side. A Fox News analysis of campaign finance data in August found that 61% of money raised directly by the Trump campaign so far this cycle has come from small donors, per FEC figures.

The big picture: Small-dollar donations have been notoriously hard to trace back to the donors, but some of these online fundraising platforms are helping to bringing some transparency to that process.

• Before Big Tech became a campaign staple this century, candidates relied mostly on email and direct mail to fundraise, but those platforms didn’t make donations as efficient or easy for people to participate.
• "Platforms like ActBlue and Facebook have made a number of improvements that result in quicker checkouts, recurring donations and higher conversion rates. These fixes allow for a better experience for the user and a higher ROI for campaigns," says Tara McGowan, CEO and founder of ACRONYM, a digital progressive non-profit.

The bottom line: "[T]he scalability of internet fundraising has certainly played a huge role in the rise in small donor giving, but it's hard to say exactly how large of one, and more challenging yet to say which technologies have had the biggest impact," says Joe Ready, program director at U.S. Public Interest Research Group.