“There’s only one way to keep Donald Trump out of the Oval Office: At the ballot box,” wrote President Joe Biden on May 30, the day a Manhattan court found Trump guilty of falsifying business records to conceal hush money payments to a porn star, before the 2016 election. The verdict made him the first former US president and presidential candidate with a criminal conviction.
But, while Biden may hope his words rally voters, some believe the ballot box itself is under threat — a fear that is prompting wealthy individuals, foundations and impact investors to plough funds into organisations working to shore up the US’s democratic systems.
Election integrity is not their only concern. Some are unsettled by Trump’s promises to dismantle the so-called “deep state” and invoke the Insurrection Act, enabling him to deploy troops to quash demonstrations. Others have more general worries such as the proliferation of misinformation or the increased harassment of public officials.
“It’s become clear that we cannot take the preservation of democracy in America for granted,” says Adam Bendell, an entrepreneur and impact investor who is part of an informal circle of funders using their personal wealth to support initiatives and organisations building the strength of democracy.
For Liesel Pritzker Simmons, supporting democracy underpins the broader mission of the Blue Haven Initiative, the impact-focused family office she co-founded with her husband Ian Simmons. “Any impact we want to have will be undermined if we don’t live in a functioning democracy,” she says.
While data on this form of funding is hard to come by — partly because many donors prefer to remain anonymous — the Democracy Fund, launched in 2014 by eBay founder Pierre Omidyar, has been tracking its growth.
Its research finds rich donors that support democracy tend to be those with inherited wealth, wealthy financiers and newly rich tech executives. It estimates growth of up to 61 per cent in this type of funding in the four years from 2017-2018 to 2021-2022, and puts the total for 2021-2022 at between $5.4bn and $6.9bn.
Funders often sit on one side of the political aisle or the other. For example, conservatives and Republicans founded advocacy group Defending Democracy Together to protect US democratic norms and institutions and to fight for principles such as the rule of law and the integrity of elections.
Meanwhile, helping Democrats win is the main purpose of venture fund and accelerator Higher Ground Labs, says Betsy Hoover, its founder. Start-ups in its portfolio provide everything from donation processing software to text messaging tools, she explains. “And their customers are campaigns, parties and organisations that are politically aligned.”
However, Higher Ground Labs also funds companies that take a more bipartisan approach. Hoover explains the rationale: “If democracy’s not around, it won’t matter who’s on the ballot,” she says. “So we’ve taken a broader approach to our thesis over the past couple of years to invest in things we think will make democracy stronger.”
At New Media Ventures, which supports both for-profit and non-profit enterprises, the focus is on funding organisations that provide digital services, such as information distribution or online advocacy, and civic engagement tools and voting systems.
While NMV is left leaning, it takes a non-partisan approach, explains Carlissia Graham, its president. “We don’t tell people who to vote for,” she says. “It’s about getting people activated.”
For Bendell, supporting initiatives that shore up democratic institutions is something of an insurance policy in case authoritarian-leaning candidates win. “It’s under-appreciated as a strategy,” he says. “But, if it is needed, we’ll be glad someone funded this.”
For example, he and his giving circle colleagues support bipartisan lobbying to reform the Insurrection Act and the Emergency Act. “Everyone thinks there are circumstances where the president needs emergency powers,” he says. “But, right now, those laws are written so broadly as to be prone to abuse.”
Bendell is among those contributing to Protect Democracy, a non-profit group founded in 2016 by White House lawyers to prevent the type of authoritarianism they saw emerging across the world from taking root in the US.
Working with academics at George Washington University, it has developed an Authoritarian Threat Index score that ranks the US and five other countries, from 1 for a healthy democracy to 5 for total dictatorship. The US currently scores 2.1, giving it a “significant” threat warning, alongside Poland (2.3). India’s threat is deemed “severe” at 3.5, while Germany (1.5), Canada (1.5) and the UK (1.8) face a “low” threat.
With a team of pro bono lawyers, Protect Democracy uses litigation as a key tool. Ian Bassin, its co-founder and executive director, says the group’s lawyers have represented everyone from election officials falsely accused of corrupting elections to police officers injured in the attack on the US Capitol on January 6 2021, and that clients have included elected Democrats and Republicans and both Biden and Trump supporters.
Other activities include legislative and communications strategies, many run in partnership with other organisations. “We’re building broad cross-ideological coalitions that might disagree about policy issues but agree on the ways in which you resolve those disagreements,” explains Bassin.
At the Faith & Politics Institute, the entire focus is on bridging political divides. The non-profit group takes congressional members from both houses to places of significance in US history, including an annual pilgrimage to Selma, Alabama, where in 1965, police beat civil rights demonstrators as they tried to cross the Edmund Pettus Bridge.
With about 300 participants a year, the idea is to foster new relationships during visits that transcend political differences. “We work with partisans to encourage them to do non-partisan work,” explains Rob Wilson-Black, the organisation’s president and chief executive.
Like many philanthropic organisations supporting the health of democracy, FPI receives funding from individual donors, as well as from corporations and foundations.
But, while support for democracy was once largely philanthropic, in recent years it has been attracting dollars from venture funders such as Higher Ground Labs. “Start-ups and private capital move a lot faster than government and non-profits,” says Hoover. “And we need to move with rapid speed here.”
One company in its portfolio, BallotReady, provides a free digital non-partisan guide to candidates and upcoming elections across the US, as well as details on how to register to vote, how to contact a public official, and how to run for office.
“There are elections almost every week in the US so, for voters, it can be very hard to be informed,” says Alex Niemczewski. She created the company in 2015 with her University of Chicago classmate Aviva Rosman after struggling to decide how to vote in an election with dozens of candidates on the ballot, most of whom she had not heard of.
“A lot of voters understand the power of local elected officials, who make decisions on things they care about,” she says. “But there’s an information gap.”
Opportunities to invest in companies such as BallotReady are increasing, particularly when it comes to countering misinformation. In 2023, data provider Crunchbase estimated that, in the previous two years, investors had put more than $300mn into tech start-ups focused on combating online falsehoods.
However, some funders such as Blue Haven and NMV prefer to deploy blended capital, using philanthropic dollars to support non-profits and investment capital to back start-ups.
At Blue Haven, for example, philanthropic funding is used to support voter engagement on college campuses through non-profit initiatives such as the ALL IN Campus Democracy Challenge.
At the same time, explains Simmons, it has invested in Higher Ground Labs, as well as in BallotReady and other companies promoting election transparency. “Companies are willing to pay for higher-quality information,” he says. “And, in many cases, you have a market failure that is addressable through a solution where there are pay offs.”
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One such investment is in NewsGuard. Using artificial intelligence and a staff of trained journalists, the company tracks misinformation for companies, advertisers, news organisations and democratic institutions. “You need continuous innovation in this field to keep up with the misinformation environment,” says Simmons. “So a company like this has a long life ahead of it.”
Propel Capital Network is another funder pursuing its mission through a combination of grants and impact investments. It has a philanthropic arm, Propel Democracy, and an impact fund, Propel Ventures, which invests in early-stage companies. The fund’s primary investor is co-founder Jeremy Mindich, an impact investor and also co-founder of institutional alternative asset manager Scopia Capital.
Propel’s portfolio includes digital communications consultancy A-B Partners, whose clients are social change organisations, and Mobilize, whose technology links people to vote-registering efforts or volunteer opportunities in political campaigns.
Propel Ventures is an “impact-first” investor that aims to recycle financial returns into other investments, explains Sarah Williams, the fund’s co-founder and chief executive.
At Blue Haven, which has a similar strategy, Pritzker Simmons argues that seeking outsized returns is not the right approach when it comes to supporting civic engagement or political transparency. She points to the demise of local news organisations because of plummeting revenues. “If everything needs to follow a for-profit, win-at-all costs trajectory, democracy and information suffer,” she says.
Williams stresses the need for flexibility in the way capital is deployed when its purpose is to support democracy. “This is a moment where we need new models for engaging people and encouraging dialogue and participation,” she says. “And, as investors and funders, we need to be creative and encourage their development with all kinds of capital.”
Regardless of the type of capital deployed, however, supporting democracy is not always easy, since funders and impact investors can find it tricky to steer clear of partisan politics.
Media expert and philanthropy adviser Nicco Mele cites the more than $400mn in donations that Meta’s Mark Zuckerberg and his wife Priscilla Chan made in 2020 to non-profits to help develop ways of enabling elections in the middle of a pandemic. “It seems like it was designed to be non-partisan,” he says. “And, four years later, Republicans are viewing it as partisan and are passing laws to prevent that kind of philanthropic support.”
He sees a dilemma for funders. “They want to help a healthy civil society,” says Mele, who advises philanthropists with net worth of about $100mn. But, in the US, he argues, it is difficult to find organisations doing work that is “good for civil social and good for democratic institutions that is definitively non-partisan”.
In addition, this kind of funding comes with risks such as threats of political violence, which is why, according to the Democracy Fund research, some prefer to remain anonymous, giving through donor-advised funds and other types of intermediaries.
At times, attempting to bridge political divides can be “excruciatingly difficult”, admits FPI’s Wilson-Black. “But that does not make us lose hope,” he says. “It reminds us that this is exactly why we’re doing what we’re doing.”
This article is part of FT Wealth, a section providing in-depth coverage of philanthropy, entrepreneurs, family offices, as well as alternative and impact investment
