Silicon Valley entrepreneurs envision using mutual funds for political giving

WASHINGTON -- The term of choice in political giving these days is straight out of the world of finance -- donors have become "investors." Now, liberal California venture capitalists have come up with the natural corollary -- political "mutual funds."

The new venture, being launched today, is the work of Andy and Deborah Rappaport's New Progressive Coalition, a San Francisco-based organization they like to call the Charles Schwab of politics.

Through a rigorous vetting system, the coalition identified 37 Democratic-leaning organizations and distributed them among three funds. The idea is to guide potential contributors through the myriad liberal causes and groups that dot the political landscape.

For Andy Rappaport, the plan is simply a way of looking at political groups as startups and donors as the source of capital. It also is a way to expand a liberal donor base that Rappaport finds disturbingly small.

"Progressive funding is in a pretty sorry state," he said in an interview.

The Rappaports are Silicon Valley millionaires and among the biggest contributors to liberal and Democratic political groups, along with financier George Soros and Hollywood producer Steve Bing.

"We are really one of a very small handful of very large donors," Rappaport said. "Our view is that is an unstable and undesirable situation."

The effort is part of an evolution in liberal giving, where donors big and small are looking to organizations with proven track records or long-term missions instead of funding new, fleeting groups that disappear at the end of an election cycle.

The Rappaports and the New Progressive Coalition are looking beyond electoral politics. Their biggest "mutual fund" is Victory 2008 and Beyond, which finances groups that mobilize voters, train candidates and help elect liberal office holders. But it also has two other funds, one for organizations dedicated to expanding health care and another for environmental causes.

"NPC sees itself as the talent scout for the more entrepreneurial organizations," said Kristin Falk, the coalition's chief executive officer and a veteran of liberal fundraising and organizing.

She said large political organizations, many of them so-called 527 organizations that can raise large sums of money from wealthy individuals, rely on the same limited list of big donors.

"We're going for people who are not on those lists," she said. "We're going after individuals who don't consider themselves political donors."