Is There a Fundraising Drought on the Left? And, If So, Why?

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Aug 1

The only upside of the trauma of the past seven years is that huge amounts of new money have poured into progressive organizations and Democratic campaigns, starting right after the 2016 election.

This flood continued up through 2020 and into last year’s high-stakes election cycle when Democratic candidates in battleground states — even those running for once-obscure offices like secretary of state — raised record sums. Meanwhile, the budgets of many liberal groups skyrocketed.

But are these boom times now finally over?

That would seem to be the takeaway from a spate of recent stories about lagging political fundraising and layoffs at progressive organizations. Politico recently reported on what it called “a dramatic downturn in small-dollar donations across the board,” based on an analysis of federal fundraising data. The consulting firm Middle Seat found much the same thing from its deep dive into the numbers.

Nonprofit funding numbers are harder to come by, given the lag in filing 990s. But what we do know is that lots of jobs are being eliminated in progressive organizations, including:

The Sierra Club is downsizing to the tune of 100 people as it scrambles to cut spending.
Planned Parenthood Federation of America also reportedly laid off 100 staff in June.
Color of Change let go 49 people last month as it slashed its budget by nearly $20 million.
Arabella Advisors — the largest consulting firm servicing donors on the left — recently laid off 10% of its staff, including its CEO.
ActBlue, another key piece of the progressive infrastructure, laid off 17% of its staff in April.
Movement Voter Project, which Blue Tent often relies on for donor recommendations, reportedly laid off more than a dozen people in May, including much of its leadership team.

And those are just the layoffs that have become public. I suspect that many other groups have quietly shed staff as funding has fallen.

It makes intuitive sense that the left’s money machine would be slowing down. Fundraising challenges are one factor. Besieged by spam emails and texts, many of which are misleading, you can see why many donors might retreat from this whole ugly business. Growing tech obstacles to getting emails delivered and tracking their open rates is another problem.

Then there’s the wobbly economy of the past year or two, with inflation hurting ordinary people, while the affluent have seen sharp drops in their stock portfolios. The so-called “richcession” that hit the upper class has been bad news for any organization that depends disproportionately on major donors or endowed foundations — which is true, alas, of a lot of progressive groups, many of which have very narrow funding bases and embarrassingly few small donors. If just one or two top benefactors or grantmakers pull the plug, it can blow a massive hole in a group's operating budget, triggering layoffs.

New data from Giving USA, the leading tracker of philanthropic giving, confirms that there was a notable drop in nonprofit donations in 2022 — totaling 10.5% when adjusted for inflation, with giving by individual donors falling the most. The authors of the report cited economic factors as the most likely cause for this decline.

Finally, and perhaps most obviously, it makes sense that giving on the left would fall as threats from the right recede. We’re not out of the woods yet, of course, and things have recently grown far worse for some groups thanks to Dobbs and the targeting of trans people. There’s also a very real chance that Donald Trump could regain the White House — especially if No Labels (or even Cornel West) provide an assist in razor-thin states. But the overall picture has brightened, with Trump out of office, criminal charges piling up and Democrats still basking in the glow of a fantastic mid-term election.

If we are heading into a post-Trump era, however fitfully, it’s likely that progressive and Democratic organizations will face ongoing fundraising challenges.

On the other hand, seeing positive results can be a big motivator for donors. It feels nice to win. And the victories won by ever-more effective groups on the left — both in the electoral and policy arenas — show that progressive and Democratic donors can get a strong return on their investments. This linkage is one more reason why it’s so important to steer donors toward the highest-impact giving options and root out bad fundraising practices. People who learn how to give smart and are treated with respect by fundraisers are likely to give more.

Donors on the left — numbering in the millions and giving billions — have a lot to be proud of. They’ve bankrolled a powerful pushback to authoritarianism that looks likely to succeed, fingers crossed. Now they need to be brought along for the next big job: building the America we ideally want to see.