Sending up the Bat Signal to funders

Off-year funding shortages force organizations to pull their punches.

It’s late summer of the off-year, which means that many pro-democracy organizations are running on fumes. This year, many are reporting that the shortage is especially acute. I and other funders are getting emails warning of organizations about to run out of cash entirely or become hobbled. Some of the most clearly cost-effective (and c3!) opportunities I’ve seen are going unfunded. The Movement Cooperative reports that funding shortfalls have pushed some of its members to slash voter contacts by 65-90% versus 2021.¹

Large-dollar funders are seeing large drops

The donor collective Movement Voter Project just released a paper, "Sending Up the Bat Signal.” Their ED Billy Wimsatt writes:

In the 2019-2020 election cycle (and to some extent in 2021-2022), donors gave like our lives depended on it. This has not happened yet in the 2023-2024 election cycle.

Other well-connected funders are saying the same. “Every leader I know is currently experiencing a serious decline in fundraising,” one told me.

As I’ve written before, the first 6-9 months of a cycle (i.e. January to September of odd-numbered years) are a time when funders learn, evaluate, and plan. That’s well and good, but it creates a dangerous period for the many organizations that don’t end each cycle with a long runway.

Small-dollar donations also cause shortfalls

The typical organization on ActBlue is receiving less. While ActBlue reports small-dollar donations 10% higher than in 2019, that’s spread across nearly twice as many recipients.

For philanthropy broadly, donations in 2022 dropped 3.4% (or 10.5% adjusted for inflation) according to the Giving USA project, albeit after two record-setting years.

A tiny silver lining

Funding shortfalls aren’t all bad. Not every organization or program makes cost-effective impact, and those should be revamped or shrink, merge, or close. Few organizations will take those steps unless forced, and that force mostly needs to come from the funding marketplace.

But the funding marketplace is very imperfect (an “inefficient market” in technical terms), so a funding shortage hurts many good projects even if it also culls some less-effective ones.

Same old: Democracy needs more, bigger, earlier funders

Preserving American democracy remains a central challenge of our time, but political giving remains tiny in the scheme of things; just 1% of overall philanthropy, and roughly the same amount as Americans spend on Halloween(!).²

As donors inevitably come and go, it remains a critical and underserved task to bring new faces into the movement, and to better steward the ones already engaged.

Some folks doing good work on this include Movement Voter Project mentioned earlier, as well as Donor Organizer Hub, Flip the Vote, Focus For Democracy, Force Multiplier, and many others. Being a “volunteer donor organizer/advisor” remains a highly impactful role for volunteers, and one that the movement continues to overlook. And the Democracy Donors guide remains a good resource for newcomers.

1. For more information, contact Andrea Catone at andrea.c@movementcooperative.org.

2. Halloween spending is $10.6 billion per year, or $21.2 billion per two-year cycle; all Federal campaigning cost in 2019-20 cost $14.0 billion, plus ~$6 billion for all state-level campaigns as of 2018.