A large Republican fundraising vendor is pushing its clients to reorient their strategies around small-dollar contributors as PAC donations have dried up in the wake of Jan. 6th and a move away from DC lobbying by corporations and trade associations.
Fundraising Inc., a vendor that’s under the Axiom Strategies corporate umbrella, announced this week that it has “revamped the traditional PAC-focused GOP fundraising model” to an “updated approach … to better compete with Democrats for small-dollar donations.”
“Many members, 60 percent or more of their fundraising came from Washington, D.C.-based PACs that represented trade associations and corporations,” Alexandra Kendrick, president of Fundraising Inc., told C&E. “After [Jan. 6th], most of those PACs shut down and it was so dramatic that the majority of our clients missed their PAC fundraising goals by 95 percent in Q1.”
PAC fundraising, even before the Jan. 6 insurrection, was already trending downward, according to Kendrick, a longtime PAC fundraiser.
“The PAC dollars were just getting less and less as trade associations and corporations really started lobbying more on the state level than they did on the federal level because there’s just so much [legislative gridlock] here in Washington, D.C. So those dollars were already becoming harder to chase,” she said.
COVID also hit that type of fundraising hard, shutting down in-person events and causing many lobbyists to move to Florida, Colorado or Montana.
“They left the city and nobody wants to lobby or attend a fundraiser via Zoom. It’s just not effective,” Kendrick said. “Those dollars were taken off the table. Then you bring on top of that Jan. 6th and it was just a death knell to Republicans who voted [against certification of the election].”
Fundraising Inc., which acts as a kind of GC for fundraising, has a list of preferred vendors that it works with to help clients raise money via direct mail, digital and in-state or field events. Getting clients who were accustomed to turning up at a posh DC event and raising thousands in the process to reorientate their strategies around small-contributions from thousands of donors is a challenge.
“It’s a big investment on the front end for these members. You’ve got to stick with it. A lot of times, they don’t make money that first year. They barely break even,” Kendrick said. “But it’s a funding source that, if you will stick with it, will be with you for the long haul — [and] will translate into votes for you as well. If someone is willing to give you $1, they’re going to be willing to vote for you.”
Part of the hurdle rank-and-file Republicans face is that raising small-dollar donations often requires a media profile and a significant digital operation to capitalize off high-profile appearances.
“You can usually tell within the first two quarters whether or not it’s going to work,” Kendrick said. “If you’ve got an ROI that’s 37-50 percent in your first two quarters you’ll eventually be able to bring in some good money.
“If you’re looking at an ROI that’s a lot lower than that, I’m going to say to my client, ‘This just isn’t right for you.’ That’s usually because the client’s not willing to have the right kind of message or they have an institutional issue within their campaign where they’re not able to approve content and get it out in a consistent manner.”
She added: “Frankly, all Republicans need to work on their small-dollar fundraising.”
If client education around building a small-dollar program wasn’t enough of a challenge for Kendrick and her team, she also has to convince clients to invest in compliance, which is generally an afterthought.
Kendrick noted that one client had been hit with a $20,000 fine from the FEC after relying on his tax accountant who was unfamiliar with the rules around reporting last-minute expenditures. Others have relied on campaign volunteers to handle their campaigns’ compliance.
Kendrick noted the firm road tested their small-dollar offerings before formally rolling it out this week.
“After Jan. 6th, we had 32 clients and nine of them raised exclusively PAC dollars. Out of those nine, eight of those clients expanded their operations to include email, digital or direct mail, and so we were able to really take folks who weren’t doing anything in those small-dollar spaces and move them into some small-dollar platforms and it worked really well,” she said.
For members and congressional candidates who want to persist with traditional fundraising methods, she has a stark message: “There is no going back,” she said. “It isn’t there, frankly. It just isn’t there.”
