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Republicans consider fundraising overhaul after getting crushed by Democrats in 2020

Digital operatives are in preliminary discussions about an attempt to overhaul the Republican Party's small-dollar fundraising apparatus, multiple officials with knowledge of the discussions tell Axios.

Why it matters: Democrats crushed the opposition in 2020 when it came to fundraising. Now, top GOP operatives are trying to craft a strategy and technology infrastructure that will get them closer to parity.

What's happening: Half a dozen Republican digital operatives, all of whom work or have worked in senior roles in the party, told Axios they're aware of or involved in efforts to create a centralized, party-wide apparatus to find and tap wells of grassroots financial support.

  • The goal, they say, is to take an industry that's highly fractured among candidates and their fundraising vendors, give it the party's official imprimatur, use scale to bring down costs and make fundraising operations more transparent and accountable.
  • All of those who spoke with Axios about the project did so on the condition of anonymity so as not to jeopardize existing business arrangements.

What they're saying: The project is in its infancy and visions for it vary, but a central component would be an "exchange" in which campaigns could establish agreements to share their donor contact lists.

  • Under the current system, campaigns frequently rely on vendors to find, or "prospect" for, new donors. The costs associated with that work can be immense and opaque.
  • Allowing campaigns and party committees to exchange that information directly, if done at scale, would significantly reduce costs, bring new donors to the table and provide a measure of transparency, those involved with the effort say.
  • It would also result in less reliance on middlemen to run paid prospecting campaigns. "The party should not be downstream from its vendors; it should be the other way around," one veteran Republican operative involved in the effort told Axios.

The big picture: The Republican grassroots fundraising game is dominated by a handful of players.

  • Firms like Targeted Victory and Campaign Solutions do tens of millions of dollars in business each cycle building grassroots fundraising programs through emails, text messages and other media.
  • Dozens of smaller firms also maintain donor contact lists and rent them out to candidates, party committees and independent political spenders.
  • Party officials generally have little visibility about how candidates' grassroots fundraising campaigns are carried out, which donors or how many of them are targeted and what portion of the money raised is going to the vendors themselves.
  • Candidates, meanwhile, frequently find themselves paying to acquire some of the same donor names multiple times as they rely on vendors to prospect for new fundraising leads. And donors, who might find themselves on multiple fundraising lists as they're rented and sold, potentially burn out with incessant dollar asks.

Yes, but: Getting such a system in place will be an immense challenge, those involved admit.

  • The GOP's rapid adoption of the payment processing platform WinRed in 2019 and 2020 provided a model, they say. It standardized a key piece of campaign technology across the vast majority of its political operation.
  • That was largely thanks to team Trump and the national GOP getting on board, but future endeavors may not enjoy that level of party cohesion.

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