‘Adapt immediately or find a new job’: Senate GOP confronts fundraising emergency

‘Adapt immediately or find a new job’: Senate GOP confronts fundraising emergencyJuly 13, 2020

Last month, the National Republican Senatorial Committee prepared a slideshow for Senate chiefs of staff full of bleak numbers about the party’s failure to compete with Democrats on digital fundraising. For anyone not getting the message, the final slide hammered home the possible end result: a freight train bearing down on a man standing on the tracks.

The slideshow, obtained by POLITICO, painted a grim picture of the GOP’s long-running problem. Republican senators and challengers lagged behind Democrats by a collective $30 million in the first quarter of 2020, a deficit stemming from Democrats’ superior online fundraising machine. Since then, Democrats’ fundraising pace accelerated further, with the party’s challengers announcing huge second-quarter hauls last week, largely driven by online donors giving through ActBlue, the party’s preferred fundraising platform.

The money guarantees Democrats nothing heading into November 2020. But with President Donald Trump’s poll numbers sagging and more GOP-held Senate races looking competitive, the intensity of Democrats’ online fundraising is close to erasing the financial advantage incumbent senators usually enjoy. That’s making it harder to bend their campaigns away from the national trend lines — and helping Democrats’ odds of flipping the Senate.

Republicans have a new online donation tool backed by Trump, WinRed, which they have hailed as an answer to their ActBlue problem. But a dozen Republican Party strategists and donors warned in interviews that not enough GOP campaigns are taking active steps to properly use the tools at their disposal to haul in money.

During the lunch meeting with senators’ top aides, NRSC staffers warned that if Republicans don’t improve — by investing in list-building, advertising regularly on Facebook and increasing email solicitations — the outlook was bleak not just for 2020, but for 2022 and 2024.

“It’s a slow-moving trainwreck,” said Eric Wilson, a Republican consultant who led Marco Rubio’s digital strategy in the 2016 presidential campaign. “The warning signs are flashing right now, and they’re ignoring it.”

Democratic Senate campaigns have outraised Republicans in small-dollar donations (under $200) in 10 of the 12 most potentially competitive races, according to a review of the most recent Federal Election Commission reports, which this week are due for an update covering the second quarter. Already, many Democratic campaigns have announced that they raised massive sums in the last three months, while few Republicans have tipped their hands. Unitemized donations also represented a higher percentage of individual receipts for Democrats in every competitive race featuring a GOP senator.

“Some GOP Senate candidates have made great strides online, but we’re still light-years away from where we need to be as a party,” Kevin McLaughlin, executive director of the NRSC, said in a statement. “2020 should serve as a canary in the coal mine to anyone on the ballot in 2022 and beyond. They have a simple choice: Adapt immediately or find a new job. We have better resources than Democrats, but they don’t do any good if no one uses them.”

A perennial problem

Over the last decade, Republicans have lagged behind Democrats in online fundraising. But the 2018 election clarified the problem like never before, when Democratic challengers swamped their opponents in online cash and flipped the House. Now, the same pattern is materializing again in 2020, in both the House and the Senate.

The NRSC, which has worked over the past several election cycles to build its own successful small-dollar program, is evangelizing about the importance of growing GOP online fundraising. Sen. Todd Young, the committee chairman, briefed senators during a party lunch about online fundraising the week after the meeting with chiefs of staff. And on July 1, the NRSC also assembled chiefs of staff for senators on the ballot in 2022 to emphasize the importance of starting early, according to people familiar with the meetings.

Some Republican party committees have caught up to or even surpassed their Democratic counterparts in grassroots fundraising. But the same can’t be said about candidates.

The numbers are also troubling for the House GOP. Vulnerable House Democrats raised a staggering $35 million in the second quarter and ended with a collective $117 million in their campaign accounts, building a layer of financial protection on top of the favorable polling currently shielding their majority.

“[Democrats] are better at online fundraising than we are — period,” said Corry Bliss, who as executive director of Congressional Leadership Fund, the GOP’s main House super PAC, warned of a Democratic “green wave” in 2018. Now, he said, it’s “back.”

“Thanks to WinRed and most campaigns understanding how important this is to winning, we have improved from last cycle,” Bliss said. But, he added, “You’re not going to change it overnight.”

There are bright spots for Republicans. Michigan challenger John James has been one of the party’s best online fundraisers and has outraised Democratic Sen. Gary Peters several quarters in a row. Sen. Martha McSally has consistently led her colleagues in small dollar donations, making her one of the party’s best fundraisers running this cycle alongside Majority Leader Mitch McConnell, who also raises big money online. But they’re running against Mark Kelly and Amy McGrath, respectively, who have both shattered fundraising records with even bigger online programs.

Trump is one of the best small-dollar fundraisers in history, shepherding donors to down-ballot Republicans’ WinRed pages when he tweets out endorsements. He’s spent more than $50 million on Facebook ads alone since May 2018, strengthening his small-dollar network and building a bigger online donor base for the whole GOP, as he entices some of the party’s voters to embrace digital giving.

Still, “there’s a giant fear that when Trump leaves the stage, Republicans are going to be logarithmically behind in terms of small-dollar donors,” said Dan Eberhart, a Republican donor. “The traditional model is slowly dying.”

‘For a long time, members didn’t understand the potential’

Republicans took a key step toward addressing Democrats’ online fundraising dominance last year, when WinRed launched and became the central hub for GOP money. Donors gave a record $275 million to candidates through the platform in the second quarter — more than the three previous quarters combined.

But technological capacity is only one issue, Republican operatives said. The party is still struggling to get Republican campaigns to buy into online fundraising and invest in its importance.

Many candidates have long assumed that “95 percent of the money you would raise would be from large donors, political action committees. Online fundraising was just to check the box,” said former Rep. Carlos Curbelo (R-Fla.), who lost his seat in 2018 after being outraised by his Democratic opponent. “For a long time, members didn’t understand the potential of online fundraising.”

Building a small-dollar machine requires a massive — and early — investment to vacuum up email addresses and cell phone numbers from list-building ads on Facebook, Google and other digital platforms. Operatives in both parties also emphasized that campaigns have to hire and elevate digital-focused staff members to senior positions.

That turns into big gains at key moments. Democrat John Hickenlooper’s campaign raised more than $325,000 online in 48 hours as he became the party’s Senate nominee in Colorado. Theresa Greenfield’s campaign in Iowa raised more than $200,000 online after a Des Moines Register poll showed her narrowly leading the Senate race.

Even tweets can bring in significant cash: Sens. Chris Murphy (D-Conn.) and Brian Schatz (D-Hawaii) have started posting tweets about Senate candidates as a way to boost their profiles and raise money. All told, they have raised more than $600,000 for 8 Democrats through Twitter, including six figures apiece for Iowa’s Greenfield and Georgia’s Raphael Warnock.

“This money is essential,” Schatz said in an interview, noting that the national parties always have to pick and choose where to spend their money. He continued: “The ability for the grassroots to make sure that we are funded in Texas, and South Carolina, and Kansas, and Montana and Georgia 1 and 2, is essential.”

Murphy added that full online buy-in across the Democratic Party, including senators and former presidential candidates with big email lists, has created a “multiplier effect” that’s feeding off online donors’ hair-on-fire enthusiasm for defeating Trump and other Republicans in 2020.

“The problem isn’t just that they’re behind on the tools to use, they’re also facing a massive enthusiasm gap,” said Stewart Boss, a spokesman for the Democratic Senatorial Campaign Committee.

House money

House Republicans, who have been sounding alarm bells on a fundraising crisis all year, said their candidates have largely stabilized things in the second quarter. Many challengers in top target seats raked in at least $500,000 or more, and those who cleared competitive primaries have enjoyed donation windfalls.

At least two House GOP challengers outraised incumbents in the second quarter. In northeast Iowa, state Rep. Ashley Hinson beat Rep. Abby Finkenauer (D-Iowa), bringing in over $1 million to Finkenauer’s $875,000. And in Minnesota, Marine veteran Tyler Kistner raised $744,000, narrowly beating Rep. Angie Craig (D-Minn.). Both Democrats have healthy cash on hand advantages, though, especially Craig.

Overall, at least 10 of the 42 members in the Democratic Congressional Campaign Committee’s “Frontline” program for endangered incumbents raised more than $1 million in the second quarter. (Only four reached that milestone in the first three months of the year.) By the end of June, 34 battleground members had at least $2 million or more in the bank.

Meanwhile, Democratic fundraising success in open and GOP-held seats, particularly in Texas, could put Republicans on the defensive in the fall, despite their aim of taking back the House majority.

Twelve Democratic challengers have at least $1 million in the bank, in some cases dwarfing GOP incumbents’ funds. Texas Democrat Wendy Davis, the party’s 2014 nominee for governor, has a whopping $2.8 million on hand, over $1 million more than GOP Rep. Chip Roy.

Unnervingly for the GOP, Democrats hope the gaudy numbers posted early this year could end up looking small next to what they raise online over the next four months.

In 2018, Beto O’Rourke raised an eye-catching $10 million in the second quarter — and then a record-shattering $38 million in the next three months. Several Democrats this year topped O’Rourke’s second-quarter 2018 number.

Shelby Cole, a strategist who was digital director for Kamala Harris’ presidential campaign and oversaw O’Rourke’s 2018 fundraising, said campaigns that “preemptively set themselves up for success” early in the election cycle will see massive gains.

“They’ve just done the boring work of building a good program over time,” Cole said. “And then you see explosive growth take off.”

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