Crowdpac’s Funding Engine is Powering Women Candidates

Former Google executive Gisel Kordestani co-founded the nonpartisan crowdfunding platform to get big money out of politics. She may also help level the playing field for women candidates.

Riva Richmond By Riva Richmond

Editor’s Note: This is the fourth part in a series on women-founded and -led organizations working to expand female political representation in the U.S. by recruiting, training and funding women candidates.

Gisel Kordestani, co-founder and COO of CrowdpacWhen Gisel Kordestani and her co-founders started the nonpartisan political crowdfunding site Crowdpac in 2014, their goal was to strengthen democracy and get big money out of politics. They would do that by encouraging citizens to organize, vote and run for office and by empowering small-dollar donors to fund campaigns.

But Crowdpac just might help make the U.S. democracy more representative, too, if its embrace by women candidates is any guide.

Women make up 35 percent of candidates who have used the platform, a kind of Kickstarter for politics that has been available for one full election cycle so far, 2016, and has now served well over 1,000 candidates. A roughly one-third slice may sound modest, given women are 51 percent of the U.S. population. But women are hugely underrepresented in American politics, holding only 20 percent of seats in U.S. Congress and 25 percent in state legislatures.

“If in the next cycle we can get 35 percent representation in Congress, that would be huge,” Kordestani says.

Experts say that getting women to compete for offices in greater numbers has been the biggest obstacle to equal representation, since women win at the same rate as men when they do run. Efforts that encourage and support women’s electoral success — whether by recruiting and training candidates or by helping raise money to mount campaigns — have become a focus point for activists looking to close the gender gap. (See our timeline of this movement.)

Crowdpac is one of the newest of these efforts. It is also one of the only to embrace the Silicon Valley ethos that technology well applied can solve many problems — in this case, problems that undermine our very democracy.

Testing the Water, Gaining Confidence, Hitting the Ground Running

Women are embracing Crowdpac for several reasons, says Kordestani, a former Google executive and the business and operational force behind the for-profit B corporation. For one, Crowdpac facilitates the recruitment of women candidates by enabling site users to nominate other people to run for office. Research shows that women typically need to be asked to run — often multiple times — before they’ll do it. Crowdpac’s “tool has worked quite well,” Kordestani says, by helping generate more calls for women to answer. She hopes Crowdpac will help bring more “incredible female candidates” to races everywhere.

Also, the crowdfunding approach to fundraising itself “works particularly well for women,” many of whom find it hard to ask for money, Kordestani says. “With crowdfunding, you get your networks to ask for money for you.”

But the primary draw, she says, is Crowdpac’s “big idea”: its feature that lets prospective candidates test the water by collecting financial pledges that they only cash in if they decide to run. When women see their pledge numbers rising, that can provide the confidence boost they need to throw their hats into the ring. And, says Kordestani, “once you’ve declared, you can convert all that money and hit the ground running.”

Take the case of Haley Stevens, a former Obama administration official involved in rescuing the auto industry during the financial crisis who’s running for an open congressional seat in Michigan, near Detroit.

Haley Stevens for Congress on Crowdpac

Stevens launched a Crowdpac page in March seeking pledges after a firestorm engulfed the district’s current representative, Republican Rep. David Trott. Anger surged when a Trott aide was heard on a “hot mic” recommending that they characterize an overflow-crowd of angry constituents at a town hall as “un-American.” Steven’s crowdfunding campaign quickly took off, netting her nearly $25,000 within about 3 weeks and catapulting her into the race.

“The Crowdpac page enabled me to respond to the sentiment of the time and allowed me to connect with new voters, and it was certainly very rewarding to hear from people about what my candidacy would mean to them should I declare,” Stevens said in an email.

In September, Trott announced he would not seek re-election, opening the door to a rush of candidates from both parties. The race is now considered a toss-up, and Stevens is at the front of the Democratic pack in fundraising with $524,300 in total contributions as of Sept. 30. She has raised $36,600 on Crowdpac to date.

Crowdfunding, she says, “provides an enticing avenue for new, exciting and diverse voices to enter the political arena.”

Women Are Better at Crowdfunding

Indeed, this new online method of fundraising looks to be leveling the playing field between men and women — whether in politics or business — and may even be giving women a bit of an advantage.

Women are better at crowdfunding than men, according to a July 2017 study conducted by PricewaterhouseCoopers LLP and The Crowdfunding Center of more than 450,000 crowdfunding campaigns by entrepreneurs worldwide. While more men than women use crowdfunding to raise seed capital for new businesses, women consistently reach their financial targets more often than men — even within male-dominated industries — and raise higher average pledge amounts.

Traditionally, who receives business funding is often up to insular “men in grey suits,” the study’s authors write. Women entrepreneurs have suffered under the old system, but “crowdfunding is now a well-established environment through which women can thrive, unrestricted by any embedded bias.”

The authors say women outperform in this new arena because the “crowd” includes more women funders and more men who are open to women’s projects. Moreover, female crowdfunders tend to create pitches that work better on these platforms, which reward compelling storytelling and skilled relationship-building. Women’s more adept use of emotional and inclusive language has proven more appealing to both female and male backers, than men’s more businesslike approach, they say.

As in business, crowdfunding in politics is tailormade for outsiders — which describes many women. There are no party gatekeepers at Crowdpac to keep people out, and using it is easy. Anyone can set up a campaign landing page in about 5 minutes. As a result, not only are women an outsized presence there, but almost half of the candidates to use the site are either female, minority or LGBTQ. With the current activist energy in the country most alive on the left, progressive candidates are represented 10 to one.

A number of outsider causes have also found success on Crowdpac. For instance, Arnold Schwarzenegger’s campaign against voter-district gerrymandering by political parties has attracted $142,000 in small donations, which the actor and former Republican California governor has promised to match. A nonpartisan organization called My Ride to Vote has raised $550,000 to provide voters who need help getting to the polls on election days with free Uber and Lyft rides.

A Creature of Silicon Valley

Crowdpac is not a creature of Washington, nor is it a child of outsider flyover country. Like so many tech startups, it was founded in Silicon Valley.

Kordestani, who had studied politics and international relations as an undergraduate student, got an MBA at Harvard Business School and then joined Google, whe she took a finance job in 2003. During nearly a decade with the company, she helped set up operations in several new countries, managed a finance team and worked with engineers on business-development and deal-making to launch new products. She worked in London, Africa, South America and Asia.

Soon after Kordestani left Google in 2012, Rachel Whetstone, a former colleague who was head of global communications at the time (and is now at Facebook), asked Kordestani to give her husband, Steve Hilton, a professor at Stanford University, some business advice.

Hilton had been a senior advisor to Conservative U.K. Prime Minister David Cameron on domestic policy and a champion of data transparency and citizen power. Now based in California, he was alarmed by the sway of money in U.S. politics and was interested in increasing citizen involvement. At Stanford, he had met Adam Bonica, a political science professor and data nerd, and they had been brainstorming a service to help voters find and support like-minded candidates.

“I just loved this idea,” Kordestani says, which was the perfect marriage of her interests in technology, politics and social impact.

The trio decided to go into business together, with Kordestani as chief of operations, Hilton as CEO and lead on product development, and Bonica building the algorithms to drive the products.

Bonica, an expert on measuring ideology, would help citizens identify politically aligned candidates by crunching data on their campaign contributions, keywords and voting records, and then placing candidates on a scale of conservative to liberal. Crowdpac would also assess where a given voter was on that scale and match that person with relevant politicians.

They launched Crowdpac nationally in 2014 with ballot guides for the midterm elections. That year had the worst voter turnout in 72 years. “It just felt like there was such apathy,” Kordestani says. Aiming to spur participation and get new people into political office, they plunged into building the crowdfunding platform.

The platform launched in 2015, in time for the 2016 season and in partnership with CNN’s election coverage. In signs that Crowdpac has succeeded in activating new people, it says 56 percent of donors have never given to a candidate before and the average donation is $50. Crowdpac, she says, is “making the crowd more powerful than the PAC.”

The site is free for candidates, but charges donors the credit-card transaction fees and asks them to leave a tip to support the company. It currently serves the U.S., the United Kingdom and France. But, Kordestani says, “our aim is to expand to every democracy on the planet.”

The company is also working to create new tools for candidates that will make raising money easier. “Candidates spend the majority of their time fundraising,” when they should be focused on policy questions, she says. “That’s got to change.”

Crowdpac also wants to get more people to run for office — up and down the ballot and all around the country. Kordestani says that “2018 is all about making sure that, one, there are no unopposed races and, two, that people can come to Crowdpac and find out who their candidates are,” so they can decide who to vote for and get involved.

In Silicon Valley, it’s a core belief that broken models can be fixed with technology. But Crowdpac isn’t trying to disrupt a broken system — the U.S. Constitution remains a strong framework that has served the republic well, Kordestani says. It just wants to fix how we fund our elections to make them more democratic.

“Money has really corrupted the system, but it’s not about taking money out,” she says. “It’s inviting everyone to participate.”

Posted: December 13, 2017

Riva RichmondCrowdpac’s Funding Engine is Powering Women Candidates