ActBlue Technical Services (ABTS) is a left-of-center nonprofit political organization formed by ActBlue as the organization’s credit card processing arm. It helps pay for ActBlue PAC’s operational expenses. The organization was originally created in 2007 as a for-profit company called Auburn Quad, but was reorganized as ABTS in 2009. The organization raises funds through credit card processing fees that are charged whenever a person uses the ActBlue platform to contribute to a PAC, candidate, or organization. ABTS also raises funds from one-dollar “tips” solicited from donors. ^[1]

Despite repeated public claims that ActBlue doesn’t profit from its political donations, ABTS and ActBlue have amassed reportedly $170 million in surplus funds, and ABTS has paid taxes on its profits. ^[2]

History

ActBlue Technical Services originated as Auburn Quad, a software company created by the founders of ActBlue. As of 2008, ActBlue charged a 3.95% fee on donations, of which Auburn Quad kept 1.5%. Auburn Quad earned $161,000 from the 2008 presidential campaign of former U.S. Sen. John Edwards (D-NC) and $45,610 from the presidential campaign of then-Sen. Barack Obama (D-IL). ^[3] In 2009, ActBlue reformed Auburn Quad as ABTS, a 527 organization. In a public statement, ActBlue stated the change would permit more rapid updates to its payment processing program and improve general efficiency. ^[4] Though ABTS primarily serves ActBlue, the organization also processes payments for allied nonprofits which contract with ActBlue. ^[5]

Controversy

Fee Structure and Alleged Profits

ActBlue Technical Services and ActBlue have been accused of misrepresenting their fee structure and the way it uses donations. ^[6]

ActBlue serves as an online clearinghouse for donations to the Democratic Party and its candidates. The group charges a 3.95% fee on every donation, which is given to ABTS. According to the group’s public statements, the fee is used to “[cover] the credit card processing fees.” However, the fee actually has two components – a 2.45% credit card transaction fee and a 1.5% “ActBlue services fee” which finances the website’s maintenance. ^[7]

ActBlue has always publicly claimed that it takes no profits from donations. But as ActBlue’s donations steadily rose throughout the 2010s (from $173 million in the 2012 election cycle to $5.1 billion in the 2020 cycle), ActBlue amassed far more money than was necessary for maintenance, reaching a surplus of $172.8 million between ActBlue and ABTS by the end of 2020. These funds were not distributed to candidates, and ABTS paid $1.8 million in taxes throughout the 2010s. ABTS has also continued to take its service fee despite also earning $24.4 million in revenue from 2011-2019 from $1 “tips” solicited from donors. ActBlue initially charged a transaction fee of 2.4% plus 10 cents on every transaction, and has not reduced its current 3.95% fee (instituted in 2007) despite its cash surplus. ^[8]

Republican National Committee Counsel Charles Spies has recommended that state attorneys general investigate ActBlue and ABTS for potential misrepresentation and fraud. ^[9]

Nate Thames

Though ActBlue executive director Erin Hill is listed as executive director of ActBlue Technical Services on the organizations tax filings, former ActBlue political director Nate Thames has listed himself as ABTS’s executive director since 2013. ^[10]

In 2018, Thames’s wife, Elizabeth Willard Thames, published a book entitled, Meet the Frugalwoods: Achieving Independence Through Simple Living, based on her ongoing blogging. Elizabeth detailed how she and Nate saved over 70% of their take-home pay as mid-level professionals for three years to afford to buy a 60-acre piece of land in rural Vermont to start their dream lives as homesteaders. Elizabeth and her husband went to extraordinary measures to save money on meager salaries, including making their own seltzer water and volunteering at a yoga studio in exchange for classes. The book received considerable press attention, including mentions by National Public Radio and the “Today Show.” ^[11]

After its release, the Thames were criticized for concealing Nate’s income to pretend to be poorer than they were. The book implied that both Nate and Elizabeth made modest incomes due to their statuses as employees of nonprofits. However, according to ActBlue tax records, Nate alone earned $246,485 in 2016, which according to public tax records was rivaled by only 10 other households in their new hometown in Vermont. Elizabeth admitted that she had purposefully omitted Nate’s income, claiming that the story was meant to be a memoir and his income was not relevant to their financial sacrifices. ^[12]