Planting Liberally

On Monday, the New Progressive Coalition released its signature product, the Political Mutual Fund.  The mutual fund provides progressives with an easy way to donate intelligently to organizations which are pursuing a sound strategy towards a larger goal identified by NPC.  For starters, NPC has identified three large-scale goals which progressives can "invest" in: Victory in 2008 and Beyond, Health Care, and Energy Independence and the Environment.  To be selected for investment within a mutual fund, an organization must meet a variety of criteria. 
It must have a strategy consistent with NPC's goals; it must be effective; it must fill a gap in the political landscape; it must be innovative; it must provide a good "return", according to quantifiable metrics; it must have potential for growth and for changing the landscape; and it should have a good track record and a high-caliber staff.  Individual investors should not plan on getting their money back, except in progress made towards political goals.

The launch of the political mutual funds has been successful, with coverage at the New York Times, San Francisco Chronicle, DailyKos, ABC, CBS, Time, USA Today, CNN and Forbes.  In terms of real dollars, the three funds combined have so far pulled in just north of $100,000.  The mutual funds together include 37 progressive organizations, including Energize America, the energy legislation group begun on Daily Kos.  There is a relatively low barrier to entry; to join in the fun, progressive investors should chip in a minimum of $50, plus a 2% administrative fee.

The political mutual funds are the culmination of about two years of organizational soul-searching, market research, and some fairly intense grappling with the progressive political landscape.  When it first began, NPC's mission was to serve both progressive organizations (by providing them with resources, both monetary and otherwise, to help them succeed) and progressive investors (by giving them a chance to invest in effective organizations, and to participate in more meaningful ways as well.)  NPC devoted considerable resources towards studying the progressive political landscape.  It divided the alphabet soup of progressive organizations into six sectors: Advocacy, Electoral, Idea Generation, Infrastructure & Capacity, Leadership Development, and Media.  Inspired by the use of return on investing metrics in the world of financial investments, NPC developed the theoretical framework of a "Political Return on Investment" metric within each sector, measuring things like legislation passed per dollar invested.  Along the way, NPC shifted its focus; instead of creating a marketplace where investors would invest in, partner with, and mentor progressive organizations, NPC decided to create a pseudo-financial instrument for investors to "consume".  The political mutual fund is that instrument.

With the launch of the political mutual fund finally upon us, the progressive movement now has a broad-based mechanism which will allow individual investors of relatively modest means to participate in meaningful and intelligent movement-funding.  But what does the rest of the landscape for funding the progressive movement look like, and what is missing?



The movement-funding landscape
In a way, the political mutual funds are a blend of two radically different donation models.  One model, the ActBlue model, is familiar to most MyDD readers.  This model favors ad hoc social small-dollar giving.  Social networks, blogs, and other groups play a role in recommending candidates and organizations who deserve support via ActBlue, but aside from these sorts of peer-to-peer recommendations, very few donors thoroughly vet the recipients of their donations before making a contribution.  There is a very low barrier to entry - donations can be made for as little as $5, and the average ActBlue donation tends to be around $100.  Donors tend to be focused mostly on supporting candidates, and consequently donations tend to be higher during election years.

Another model, the Democracy Alliance model, is characterized by a very high barrier to entry, and a very thorough vetting process.  The DA expressly bills itself as an effort to build progressive movement organizations, and does not appear to participate in much electoral political work.  Membership in the alliance is on an invite-only basis, and donors must contribute a minimum of $250,000.  The vetting process for organizations funded by the DA, as well as the DA's larger strategic vision for building the progressive movement, have never been made public.

By way of contrast, NPC's barrier of entry is set very low, but not quite as low as ActBlue's; NPC mixes electoral work with movement-building work; and NPC has a rigorous vetting process and movement-building strategy, both of which are clearly outlined on its website.

Along different axes, there are mutual funds which focus on corporate social responsibility of various formats, including recent partisan arrivals like The Blue Fund and more traditional, non-partisan mutual funds, like Domini Social Investments.  These funds are financial instruments which purport to provide a return on investments, but have a secondary goal of supporting socially responsible corporate actors through their investing philosophies.  Furthermore, there are venture philanthropists who seek to invest in non-profit causes but want to see quantifiable results for their donations, and social entrepreneurs, who seek to create sustainable enterprises which create positive social change, and a variety of venture capitalists who invest in social enterprises.

While these various approaches to giving sound very similar, they are each fundamentally different from the other.  Socially responsible mutual funds give money to for-profit companies whose main goal is to sell a product or service, and which operate in socially responsible ways.  Social entrepreneurs seek to create social change through for-profit mechanisms, and are frequently not traded publicly (and are therefore usually incapable of receiving investments from socially responsible mutual funds). Venture philanthropists seek to apply the metric-driven approach of for-profit investment to the non-profit world, but ultimately their money goes to apolitical non-profit groups (rather than the blend of politically relevant non-profits and directly political PACs supported by the Democracy Alliance, NPC, and ActBlue.)

Despite comparisons made in the popular press, the Democracy Alliance, New Progressive Coalition, and ActBlue are not socially responsible investors, nor are they social entrepreneurs, nor are they venture philanthropists.  They are movement-funders, who are concerned with explicitly building a political movement by supporting political actors of various stripes according to a variety of metrics.

What's missing
What the Democracy Alliance, NPC, and ActBlue have achieved in the past four or five years is nothing short of astounding.  While Democracy Alliance (internally) and NPC (transparently) have developed sophisticated models necessary for evaluating the landscape of progressive movement organizations, ActBlue has created a social fundraising mechanism that coincides perfectly with the rise of the progressive blogosphere and participatory progressive political movement.  In terms of dollars raised, last year the Democracy Alliance poured $50 million into progressive politics, and as of today ActBlue is the largest Democratic PAC, with total disbursements of $32 million from small-dollar political donations.

Despite the impressive advances made by these movement-funders in recent years, there are three ways in which the movement-funding world has largely fallen short of the needs of the progressive movement:

• Movement funders are primarily involved with funding existing actors, and do not seek to instigate the creation of new organizations to fill gaps within the movement.
• Movement funders have not drawn up a picture of sustainability for the larger progressive movement.  The implicit model underlying donations made through the Democracy Alliance, NPC, and ActBlue is that political actors will rely on donations long into the future.  There is no concept of a self-sustaining segment of the progressive movement, perhaps started by seed funds but ultimately profitable in an ongoing way.
• Movement funders are largely concerned with the expressly political world.  They are concerned with actors who are pulling primarily political levers, whether they be engaged in making campaigns more effective, pushing ideas and narratives into the expressly political media, or recruiting leaders for political organizations.  They are not concerned with building and supporting progressive cultural institutions which will help construct the progressive cultural identity.

Now, to contradict a bit of what I just wrote, there is one movement-funding organization which I've not discussed very much, but is concerned at least partially with incubating new political organizations, and with creating sustainable political models: Skyline Public Works, which, like the NPC, is funded largely by Deborah and Andy Rappaport.  Skyline is primarily a grantmaking organization, and is largely concerned with mobilizing the remarkably progressive and civic-minded Millenial Generation through its GO! Grants Program.  (Although the organization temporarily suspended future funding of GO! Grants in August 2007, its website claims that applications for winter 2007 were accepted up until Nov. 15.)  While Skyline's list of grant recipients reads like a who's-who of progressive organizations, the group has also funded a few for-profit ventures, including Civic Space, the Huffington Post, and Goodstorm. 

So while my list of critiques of the progressive movement-funding world is not entirely accurate, it is largely true.  Building the progressive movement will require mechanisms for identifying gaps within our machinery; scratching together ideas for filling those gaps; developing sustainable business models for at least some of those ideas; and pulling together the venture and angel capital necessary to seed those ideas.

Moreover, this entire approach to intentional movement building must be under-girded by an understanding that the progressive movement will require not just a political infrastructure, but a cultural infrastructure composed of churches, schools, labor unions, political and cultural media, and other cultural institutions.  In other words, our movement-funders should be willing to incubate sustainable enterprises whose goals include building new cultural institutions, or strengthening existing ones.

This sounds like an incredibly tall order, and in some ways it is.  But of course, the progressive movement is not without cultural allies.  Labor unions, most colleges and universities, and many expressly or informally liberal houses of worship are already acting as organic creators of the progressive base.  In varying degrees, the progressive movement lacks strong connections to these cultural institutions.  Many of these institutions are also facing serious problems - including union-busting for labor unions, competition from charismatic conservative churches for liberal houses of worship, and a concerted effort to install conservative professors on college campuses.  Progressives should be aware of these assaults, and must be working to counteract or mitigate them.  At the same time, progressives should be working to pro-actively build the membership and cultural clout of their cultural allies.  These efforts are just as important as our expressly political work, and they should not be ignored by movement-funders.

The launch of the political mutual funds on Monday was another milestone in the evolution of the modern progressive movement, and in particular of the movement-funding world.  I wish the NPC the best of luck in building a donor base for its political mutual funds, and I look forward to the continued evolution of the funds.  At the same time, I also hope that there is more progress towards the incubation-minded, sustainable, and cultural movement-funding which I believe is necessary to the long-term growth of the progressive movement.