A fundraising platform with a tips-based business model wants to help allocate fundraising dollars more efficiently on the left.
Brian Derrick told C&E that helping align donors with Democratic candidates who can potentially flip seats was the impetus for him and co-founder Taylor Ourada to launch Oath in 2022.
“We talk a lot about the problem that we’re trying to solve as an information asymmetry that exists between political experts and donors, where donors are just barraged with requests for $5 or $20, and they have really no resources to evaluate the substance of those requests,” Derrick, a fundraiser by trade, told C&E.
He noted that well-heeled donors have teams to help them research where to make contributions whereas small-dollar donors tend to give based on advertising or solicitations landing in their email inboxes.
“We’re trying to be that resource for donors, and that is going to change their behavior. That’s going to lead people to change where they are giving,” he said. “And we think, overall, that is a good thing. There are a lot more people who will benefit from that in the ecosystem. It’s a disruptive technology, and if the end result of that disruption is fewer beach houses [for consultants] then we’re okay with that.”
The worry over small-dollar donations being funneled away from races that need it most is something several practitioners consider an urgent issue for Democrats heading into a presidential year. For instance, the Democratic firm Mothership Strategies recently faced some renewed criticism from practitioners who think its fundraising approach does just that. The firms’ owners reject that characterization, and say they’re helping bring more resources to the table for Democratic campaigns.
Oath’s platform, meanwhile, is aiming to distribute $30 million to candidates by the end of 2024. But that doesn’t mean it will receive a percentage of that eight-figure number. Instead, Oath relies on a tips-based model to generate revenue and pay its staff. Derrick compared that business model to crowdfunding platform GoFundMe.
“We think it’s important that we’re not taking funding from candidates because we want donors to trust that the recommendations we’re making to them are objective,” he said. “We don’t charge candidates. … We also don’t want to deter donors from using the platform because our whole intent is to help them maximize the impact of every dollar.”
While it relying on gratuities might sound like a shaky business model to some practitioners — especially those who’ve seen client invoices go unpaid — the company received backing from Higher Ground Labs (HGL) earlier this year after it demonstrated that an early version of the platform got 10,000 donors to give more than $2 million.
Derrick said: “As long as you’re moving a huge volume through the platform, then we can cover our own operating costs.
“It’s never going to be a business that makes tens or hundreds of millions of dollars or anything like that. That’s not the goal. And that’s why we really went to go find mission-aligned investors who weren’t looking to thousand x their investment.”
Rather than funding, the biggest obstacle for the startup has been gaining adoption: “How do you acquire new users and reach new donors in a really cost efficient manner?”
In 2022, they cracked the code: social media and peer-to-peer marketing to bring people to the platform instead of list buys and unsolicited emails and text campaigns.
“We’ve really anchored in short-form video content that we put out, and that attracts people to the platform as well as empowering the super users and the people who are really enthusiastic about our mission to go and bring their network onto the platform as well,” he said.
For now the platform uses its own staff together with an algorithm they created internally to rank the impact of a donation to a candidate. “That score is composed of three sub metrics. The first is competitiveness … we take a look at expert ratings like Cook [Report] and the like. We also look at fundamentals for the district, whether that’s state legislative or an entire statewide race, and try to evaluate how likely is this race to be decided by less than 5 percent [of the vote],” Derrick said. “There’s an added emphasis if winning a seat could flip an entire chamber, whether that’s state leg or Congress.”
The goal is to expand the platform eventually to include even more local races.
For now, users can find all federal candidates, all competitive state legislative chambers, all 2024 competitive statewide races and then select local races all the way down to school board. Candidates running in competitive primaries are excluded.