Friday, April 11, 2008

Making Money by creating social capital

Clinton Aide’s Private Databank Venture Breaks Ground in Politicking;
In creating Catalist, Mr. Ickes, who was deputy chief of staff in the Clinton White House, has formed a rare entity on the political scene, a for-profit limited-liability corporation that allows wealthy Democratic donors to help progressive organizations and candidates by investing in the company. And if Catalist, which has data on 230 million Americans, is successful as a business, these donors-turned-investors stand to reap financial returns from using their money to help elect Democrats.

But some campaign finance watchdogs say they wonder whether Catalist was established not so much to make money but to find a creative way to allow big-money liberal donors to influence the election without disclosing the degree of their involvement or being subjected to other rules that would govern spending by an explicitly political organization.

Catalist has raised over $11 million in venture capital, including more than $1 million from the billionaire financier George Soros, according to his aides. It also counts on such large unions as the Service Employees International Union and the A.F.L.-C.I.O., to buy its products and create revenues. And it plans to be the go-to source for voter data for a broad swath of groups often aligned with Democrats — like the Sierra Club, Emily’s List and Clean Water Action — as they embark on ambitious get-out-the vote efforts this fall.

These liberal clients will buy lists of likely voters based on information that Catalist has gleaned from voter registration files and commercial data providers. For instance, Catalist computers will take voter registration information along with data from appliance warranties, hunting and fishing licenses, charitable memberships and other data points to draw models of potentially sympathetic voters that these clients can approach.

Catalist grew out of the embers of two groups that Mr. Ickes headed in the 2004 election, Americans Coming Together and the Media Fund, which, in part, conducted strong get-out-the-vote efforts. But when the Democrats failed to take the White House in 2004, wealthy donors believed that one reason they had failed was that Democrats lacked the sophisticated voter databanks of the Republican Party, its celebrated “voter vault” that can pinpoint likely supporters.

Out of that analysis came a decision to set up a Democratic voter databank outside the formal party apparatus and structured as a business, with investors and customers drawn from the same pool of those who had worked closely together in 2004.

“We wanted to come at this differently,” said Laura Quinn, chief executive of Catalist. “We needed people with a business background and a political background. Putting together a business model was critical to our effort, but we also needed someone who understood the political space, and that was Harold.”

What's the company about
To help progressive organizations realize measurable increases in civic participation and electoral success by building and operating a robust national voter database of every voting-age American; by offering tools and expertise that allow clients to use that data to improve fundraising, organizing and communications; and by updating and refining that data on a continuous basis.

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