Comparing Political Donation Platforms

Q: Should you use PayPal for political online donations?

While the fees are low, PayPal lacks many features that political-based donation processors have, including donor information recording, donor management, and integrated social media tools.

We are often asked by our political website clients (and potential clients) what fundraising services and tools we recommend for their online campaign.

In this article, we’ll look at several donation software platforms that we suggest to clients.

Key Takeaways

Political donation platforms allow users to donate online to political campaigns, candidates, and causes.
Candidates should consider using a donation platform that is specifically geared for political campaigns.
There are both partisan and non-partisan donation platforms that have similar fee structures.
Before you accept online donations, you should first establish a political campaign bank account.

What is a political donation platform?

Political donation platforms are websites that allow users to donate online to political campaigns, candidates, and causes. If you are running for office, raising money is vital to success and to help you get your message out. Digital campaigning has made it easy to collect donations online.

Although wealthy donors still contribute the majority of donations to political campaigns, small donors – those who give $200 or less – now make up a significant chunk of the money being raised by candidates. Small dollar donors contributed $1.8 billion to federal candidates through mid-October, 2020. And overall, small donors accounted for 27% of those contributions.

These days, political campaigns and nonprofit organizations face many challenges, such as a lack of time and restrictions on seeing people in-person. A political donation platform can help campaigns of any size raise more money both online and offline.

Finding the right donor system for your needs

Nonprofits have historically relied on the personal relationships between staff and donors to develop a successful fundraising strategy. However, technological advances have helped improve this process. A donor database is a powerful tool for fundraising and donor engagement. It helps you store and manage your donors, track donor activity over time, and measure the impact of your fundraising efforts.

There are many options for organizations to choose from when it comes to finding the right donor contact management system. For political candidates, we recommend using a service that is specifically geared for political campaigns. This is important for reasons discussed below.

Features to look for in political fundraising tools:

A flat-rate pricing structure.
No setup fees or monthly fees.
Payments and fees as a percentage of contributions.
Forms that can be customized with logo and colors to match the organization’s branding.
Proper donor information is collected, such as employer, occupation citizenship status, and more.
Optional recurring contributions.
Tie into virtual fundraising events.
Automatic deposit of funds to your campaign bank account.
Analytics to track incoming funds.
Tools that help simplify local, state and FEC reporting and disclosure requirements.

Donation platforms for non-profits may be able to handle some of these requirements. But to make life easier on your campaign treasurer, go with a system specifically designed for political donations and reporting.

Your next question is whether you want to go with a partisan service or a non-partisan service. The transaction fees range between 2.9%-3.9% + $0.30 per transaction.

Below is a summary and comparison of popular online donation services. They all vary a bit in functionality and pricing, but they are all easy to set up and maintain.

Each of these services can be integrated into the Online Candidate content management system in one or more ways. It’s simple to do. It is done typically through embedding a donation form or linking out to a branded donation page on the service’s website.

Non-Partisan Fundraising Services

Anedot – Donation and payment system for non-profits, political campaigns, and causes. Integrates with multiple services.
RaiseTheMoney.com – Provides campaigns and organizations with a streamlined way to accept online contributions.
FundHero.io is a fundraising service with built-in Contact Relationship Management system. It has a flat monthly fee in addition to its transaction fees.

Partisan Fundraising Services

ActBlue.com – Fundraising platform for Democratic campaigns.
WinRed.com – Fundraising platform for Republican, conservative and center-right groups.

Particularly for the partisan fundraising services, double check the terms of use and refund policies before making a final decision.

Some state or congressional campaigns may look to more extensive systems that combine customer relation management (CRM), social media and email marketing. Integrated services are more expensive. Most of our clients are simply looking for a way to easily accept online donations through political candidate website, social media accounts, and email links.

What do you need to start taking donations online?

To get started, you’ll need a campaign bank account in order to accept funds. You’ll also need an EIN, and in most cases, you’ll need to provide some sort of photo ID. If you have those items ready, you can create an account.

Review your fundraising platform options before choosing which you will use. After you sign up, your credentials will need to be verified before your donation account is activated. You’ll want to start the signup process early just in case there is a glitch in verification. Don’t wait until a few days before your first fundraiser to start the process.

Should you use PayPal for political contributions?

While the fees are low, PayPal lacks many features that political-based donation processors have, including donor information recording, donor management, and integrated social media tools.

While the Online Candidate system supports PayPal by first taking required donor information, it makes the donation a two-step process. While some of our clients today still want to use PayPal, we don’t recommend it.

In this article, we outline the reasons why you don’t want to use PayPal for political campaigns or PACs.

Other non-political services

For the same reasons that we do not recommend PayPal for political donations, we also discourage the use of other business-based payment processing services like Stripe, Venmo, Braintree, WePay, etc. The lack of proper donor data collection and ease of reporting makes it harder for campaigns to comply with political fundraising laws and regulations. If you do go with one these services, it’s likely you’ll need custom programming by a web developer to integrate proper data collection.

Comparing costs between generic and political-specific donation processors

Fees aren’t everything. Just because one vendor charges a higher fee than another doesn’t mean that your campaign will take in less money.

Here’s an example of a local campaign using hypothetical numbers to show how effectively using features can make one platform far more effective than a ‘cheaper’ option.

Suppose one online processor service has a 3% transaction fee. The second has a 6% transaction fee. Which service will leave your campaign with the most money? The first, of course. After all, it takes a smaller bite out of every donation.

Unfortunately, the math isn’t quite that simple…

Say the 3% service is bare bones and allows you to just add a button to your campaign website and a contribution link for your email. Let’s say you bring in $10,000 in donations. After expenses, you are left with $9,700.

Using the 6% service is twice as expensive. It leaves your campaign with $9,300 after deducting costs.

But suppose the higher-cost service has additional tools to facilitate online fundraising. Let us say that besides buttons and email links, the 6% service provides custom contribution pages, social media widgets, and online viral tools. Suppose that extra functionality helps bring in just 10% more in donations.

That extra 10% would provide an additional $1,000, for a total of $11,000. After taking away the 6% fees, you are left with $10,340. That is $1,040 or 11.2% more money in your coffers than the 3% service brought in.

If you can leverage the tools of the 6% service to bring in 20% more, then you could bring in an additional $1,980 or 21% more money.

Keep in mind that the scenario above is just an example, and results can and will vary. Your fundraising success will not only depend on your payment processor, but also how you use your online tools, the size of your campaign, and other factors.

Online fundraising platforms come with bells and whistles for a reason. Plan to use those features to get the most from your efforts.

Which fundraising solution is best for you?

The fundraising system you’ll want to use will depend on your needs and political affiliation. If you are appealing to partisan Democratic or Republican donors, then ActBlue or WinRed might be a good choice. Otherwise, you might want to go with Raise The Money or Anedot.

We recommend these vendors because we have clients that have successfully used those services.