Concerns over private equity are not new
Concerns about NGP VAN’s purchase by APAX are not new, and many Democratic organizations voiced serious concerns about exactly this outcome long before it happened. In a letter sent to NGP VAN before the purchase, organizations argued that NGP would need a strong expansion plan and protection, and the profit goal structure of the incoming investment group would not align directly with the more important goal of electing Democratic candidates.
The biggest reason for this is that every year, NGP VAN’s demands become greater. Not only is NGP VAN carrying more and more institutional data, but it is being used in more races than ever. This means every election cycle more data must be stored, culled, maintained, and updated. These tasks come with a cost, and because they need to be done well they require human hours to do the tasks.
The software will still be the premier source in 2024
Despite the layoffs at NGP VAN, Democratic voter profiling software maintains a strong lead over its Republican counterparts. That said, the Republican investment strategy led by billionaires is different. While Democratic efforts through mergers and acquisitions definitely seem to value higher profitability, many Republican billionaires are investing heavily in their next-generation software, like i360, for example, and the immediate cost seems far less important to them than winning elections for long-term benefits that Republican investors believe they will reap.
This can create a serious gap where our values put us in a position of allowing Republicans to rapidly develop software and tools that quickly play catchup to Democratic advantages, a serious problem going forward.
In merging firms, Bonterratech, the umbrella company covering EveryAction, Social Solutions, and Cybergrants, is looking for ways to be successful. The question they may now face is whether or not the bad potential public relations of this as a Democratic organization under a Democratic president will cause more damage or success. That’s hard to establish yet.
The marketplace makes for tough choices
The cold truth about a product like NGP VAN is that it is not immune to the market. Democratic donors are not giving to organizations in the way they once did. Under the Donald Trump administration, more donors were willing to provide more funds to wage a pitched battle in hopes of pushing back on the former president. When Democratic control returned to Washington, D.C., many donors assumed things were okay and backed away from the funding they had been providing. Inflation also had an impact.
As a result, Democratic organizations have faced difficulty in finding the resources that they once had, which has also lead to some practices that are further alienating Democratic donors. Just check our own recommended list for the feelings of users receiving invites two years early to invest in campaigns.
With this in place, the market is going to need to sit back and adjust. NGP VAN is certain to survive—it has far too much externalized investment and recurrent income from organizations that are in a position where they simply cannot reinvent the wheel. The product itself is solid and well-designed. Users continue to upload and correct data, making the product more useful after every election cycle.
These moments, however, should ring alarm bells for Democratic donors prior to 2024. While Democratic donors felt success after 2020, 2022 turned the House over to the Republicans and has still left many of our statehouses in shambles. The status at NGP VAN should stand out as a big red warning sign that we could be looking at a very, very different Democratic market space in 2024 if not for changes in patterns by Democratic donors and attention by Democratic activists.
There are big opportunities here
Have you ever walked through a university and listed off the buildings? Attended an NFL game or a baseball game? Gone to a museum? Think of how often these places are linked with the naming rights of individuals or sponsors who simply want to be recognized. It is unlikely Democratic donors come out and say, “I want nothing more than to be openly recognized as X,” but in several state parties, awards are given and recognition offered for lifetime donors, committed activists, and top fundraisers.
One thing that the Democratic efforts have done poorly over the years is that we do not take enough time to promote our own successes and then make clear our goals. NGP VAN’s situation highlights the fact that we do not talk enough about successes and needs.
It could be just your county or state party, but taking time to lay out the case for success is significant in encouraging donors to come to the table. As I have said repeatedly over the years, you cannot be afraid to make the ask.
The news about NGP VAN is in almost every Democratic forum you can find, covered almost everywhere with some panic attached. Instead of panic, think about it as an opportunity to learn something and to talk seriously about the successes that the Democratic coalition has built together. Talk about your successes and make the ask. Every single time.
