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Democracy Engine: A Personal Democracy Plus "Quick Look"

BY Sam Roudman | Friday, August 31 2012

Pros:
  • Quick setup
  • Customer service: “It’s been a pleasure working with them,” says Chris Lundberg, CEO of Salsa Labs
  • Expertise on campaign finance compliance
Cons:
  • Not as many features as Paypal
  • Can’t take money directly from bank accounts like Paypal

The Inside Story

Jonathan Zucker’s expertise is in the minefield of campaign finance law. After conceptualizing the democratic fundraising powerhouse ActBlue, and leading up to the 2010 election, his company Democracy Engine created a platform to bundle political donations. As a byproduct, he says, they “solved a lot of the problems in traditional merchant processing.”

Unintended consequences have turned into Democracy Engine’s business. Today, Democracy Engine operates as a platform for donation processing, for groups and organizations that vary from one-person non-profits up to national political campaigns.

The platform can handle multiple donations to multiple recipients, political and otherwise. It also ensures that organizations don’t have to switch platforms when raising funds for elections depending on whether they’re at the local or national levels.

Democracy Engine is officially nonpartisan, but their clients bend left. Still, nonpartisan nonprofits like CForward feel comfortable enough to use them.

"We didn’t want our perception to lean one way or the other," said spokesman Doug Knight. "I think that’s what got us excited about the Democracy Engine, it speaks to it in its name."

For smaller organizations looking to switch out of Paypal, Democracy Engine provides a speedy out. “We can be processing credit cards within hours,” says Braidy O’Neal. His agency Digital Turf uses Democracy Engine as part of campaign websites it develops.

For larger organizations, Democracy Engine has an API to create more sophisticated financial plumbing. With the API, a major labor union can raise and distribute money for a PAC, a strike fund, and political campaigns, without opening a series of new merchant accounts for each.

“We’re a niche processor,” says Zucker, “we’re not interested in challenging the Paypals of the world.” And adhering to the minutiae makes some of Paypal’s conveniences, like directly accessing certain bank accounts, non-starters.

Still, their niche is growing. In 2010, Democracy Engine was processing donations for 10 to 15 recipients, this year “it’s hundreds,” says Zucker. They’re looking to process $10 million in gross donations this year.

Not bad for Zucker, considering that Democracy Engine’s current model “wasn’t what we originally set out to do.”

Main Features:
  • Donation processing platform for non-profits and political campaigns.
  • API with features like recurring donations, and that can manage many different recipients in compliance with election law.
Competitors:

ActBlue, Paypal

Major Clients:

Salsa Labs, Nationbuilder, Human Rights Campaign, Planned Parenthood Action Fund

Price:

From 4% and .30 cents a transaction, all the way up to 6-8% for the much more complex bundles. For implementing the API, from $1,000 for simple systems, to $25,000 per election cycle for larger clients.

Icons: Thomas Amby, VoodooDot / Shutterstock.