WASHINGTON — WinRed, the GOP’s small fundraising platform, created in response to Democrats’ proposed ActBlue, lost millions of dollars during the midterm election cycle, according to top Republicans.
One Republican familiar with the private entity’s finances said it lost about $6 million in 2021 and 2022. A second confirmed the loss but believed the number was not high enough. Both spoke on condition of anonymity.
In either event, a seven-figure loss would be a stunning turnaround for a Republican company just two years ago in response to the fundraising giant ActBlue, which has helped progressive candidates and raised billions of dollars over the past dozen years. .
“If you don’t understand payments, it’s easy to go bankrupt,” said one online payment processing expert who also spoke on condition of anonymity.
Neither WinRed nor Gerrit Lansing, the startup’s founder whose software is still the foundation for WinRed’s services, responded to HuffPost’s inquiries for this story.
Republicans introduced WinRed during the term of former President Donald Trump who attempted a coup, all but forcing candidates, national parties and even state parties to use it as a way to increase the number and frequency of small dollar donations, an area that for a decade has been dominated by Democrats.
“I am pleased to announce the launch of http://tmagac.winred.com. This new platform will allow my campaign and other Republicans to compete with the Democratic money machine,” Trump declare via Twitter in June 2019. “This has been my priority and I’m happy to share that it’s live!”
But unlike ActBlue, which was founded as a non-profit organization, WinRed is organized as a privately held company. Profits are to be split 60-40 between the other two for-profit companies, Revv and Data Trust.
PATRICK T. FALLON via Getty Images
The Data Trust was created in 2011 as a repository for voter data used by the Republican party, candidates and causes, and essentially operates as a non-profit by generating net profits back into its operations.
Revv, however, was founded by ex-RNC and ex-Trump White House staffer Lansing – which means that more than half of all WinRed profits will flow to Lansing and his group of investors, instead of helping broad Republicans.
The frustration deepened during the 2020 election cycle, when WinRed, according to Republicans familiar with the finances, raised more than $10 million.
In 2021, after many candidate complaints, the Republican National Committee, the National Republican Senatorial Committee and the National Republican Congressional Committee asked WinRed to reduce its costs, arguing that it would still be profitable with all the money that would be collected in the midterms using the platform.
“We used leverage to lower prices. And they did,” said one RNC official who spoke on condition of anonymity.
In the fall of that year, WinRed announced publicly that it would eliminate 30 cents per transaction fee and instead raise the commission slightly, from 3.8% to 3.94%.
It pointed out that the change will also make WinRed cheaper than ActBlue, which has and continues to charge 3.95% without a separate transaction fee. (Nonprofits also receive tips from donors.)
“When we take the full cost of ActBlue costs and tips, WinRed is always low. Today we exceed the leadership and expect even greater things during the successful midterm elections for the GOP,” said Lansing in a press release September 21, 2021.
But when the Supreme Court overturned the abortion decision Roe v. As Wade and Trump entered the final months of the election, the political winds began to shift toward Republicans, including small-dollar fundraising.
While ActBlue reported raising $2.2 billion over the past two years for federal elections, WinRed reported processing only $1.2 billion in contributions, as GOP candidates across the country complained about being outspent by Democratic opponents.
WinRed has also made a large investment to try to develop an in-house credit card processing system if the one that uses it, Stripe, decides to end its relationship with WinRed after the violent coup attempt by Trump on January 6, 2021, said a Republican familiar with the business strategy.
It’s unclear whether those efforts are close to fruition. As of Friday, the RNC’s fundraising page was still dependent on Revv, a Lansing company, and Stripe.
Between the elimination of the per-transaction fee and the money spent trying to emulate Stripe’s service, WinRed isn’t even close, despite its universal adoption by Republican candidates.
One top Republican with knowledge of the financial structure says dropping 30 cents per donation is a killer. “They have to eat the transaction costs. And that’s how they lost their ass,” the Republican said. “If they raise it like they think they will, they’ll make a few million dollars.”