WASHINGTON — The GOP’s much-touted, small-dollar fundraising platform WinRed, created in response to the Democratic-aligned ActBlue, lost millions of dollars during the midterm election cycle, according to top Republicans.
One Republican familiar with the privately held entity’s finances said it lost about $6 million over 2021 and 2022. A second confirmed the loss but believed the total was not quite that high. Both spoke on condition of anonymity.
In either event, a seven-figure loss would be a stunning turn for a company Republicans just two years ago pointed to as their answer to the fundraising behemoth ActBlue, which has helped progressive candidates and causes raise many billions of dollars over the past dozen years.
“If you don’t understand payments, it’s easy to go broke,” said one online payment processing expert who also spoke on condition of anonymity.
Neither WinRed nor Gerrit Lansing, founder of the startup whose software still serves as the foundation for WinRed’s service, responded to HuffPost queries for this story.
Republicans introduced WinRed during the tenure of coup-attempting former President Donald Trump, all but forcing their candidates, national parties and even state parties to use it as a way of increasing the number and frequency of small-dollar donations, an area that for a decade had 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 Democrats money machine,” Trump announced via Twitter in June 2019. “This has been a priority of mine and I’m pleased to share that it is up and running!”
But unlike ActBlue, which was set up as a nonprofit, WinRed was organized as a for-profit, privately held company. Profits were to be split 60-40 between two other for-profit enterprises, Revv and Data Trust.
Ronna McDaniel, Chairwoman of the Republican National Committee, speaks during the 2023 RNC Winter Meeting in Dana Point, California, on Jan. 27.
Data Trust was created in 2011 as the warehouse for voter data for use by Republican parties, candidates and causes, and essentially operates as a nonprofit by plowing net revenues back into the operation.
Revv, though, was founded by former RNC and former Trump White House staffer Lansing — meaning that more than half of all WinRed’s profits would flow to Lansing and his group of investors, rather than helping Republicans broadly.
Frustrations boiled over during the 2020 election cycle, when WinRed, according to Republicans familiar with the finances, made over $10 million.
In 2021, following numerous candidate complaints, the Republican National Committee, the National Republican Senatorial Committee and the National Republican Congressional Committee requested that WinRed cut its fees, arguing that it would still be profitable with all the money candidates would raise in the midterms using the platform.
“We used our leverage to lower prices. And they did,” said one RNC official who spoke on condition of anonymity.
In the autumn of that year, WinRed announced publicly that it would eliminate its 30 cents per transaction fee and instead raise its commission slightly, from 3.8% to 3.94%.
It pointed out that the change would also make WinRed cheaper than ActBlue, which had been and continues to charge 3.95% with no separate transaction fee. (The nonprofit also accepts tips from donors.)
“When taking into account the full cost of ActBlue’s fees and tips, WinRed has always charged less. Today we extend our lead and look forward to bigger things to come during a successful midterm election for the GOP,” Lansing said in the Sept. 21, 2021, press release.
But when the Supreme Court overturned the Roe v. Wade abortion decision and Trump inserted himself into the elections’ final months, the political winds began to shift against Republicans, including with their small-dollar fundraising.
While ActBlue reported collecting $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 their Democratic opponents.
WinRed had also made substantial investments trying to develop an in-house credit-card processing system in case the one it uses, Stripe, decided to end its relationship with WinRed following the violent coup attempt Trump incited on Jan. 6, 2021, said a Republican familiar with the business strategy.
It is unclear whether that effort is close to fruition. As of Friday, the RNC’s fundraising page still relies on Revv, Lansing’s company, and Stripe.
Between the elimination of the per-transaction fee and the money spent trying to replicate Stripe’s services, WinRed did not come close to breaking even, despite its near universal adoption by Republican candidates.
One top Republican with knowledge of the financial structure said dropping the 30 cents per donation was the killer. “They had to eat that transaction fee. And that’s how they lost their ass,” the Republican said. “If they had raised as much as they thought, they would have made a few million dollars.”