PARTNER PROSPECTUS CONFIDENTIAL The enclosed is privileged information prepared for your sole use. It contains strategy initatives, past performance, budget allocations, target markets and it is to be regarded as forward-looking. Please do not disclose, discuss, or disseminate the contents herewith." AMERICANS FOR ariingtam i?ginia 22201 PROSPERITY Americans for Prosperity is building a long-term effort to undercut the left?s long?standing dominance in grass-roots organizing.? I -The Washington Post AMIMCAN. ,6 . a. .I OUR MISSION Advance Freedom and Prosperity in America Americans for Prosperity (APP) is committed to educating, training, and empowering Americans across the country to advance tree?market economic policy at the local, state, and federal levels. We believe policies that promote economic freedom create the greatest levels of prosperity and opportunity for all Americans, especially for society?s poorest and most vulnerable citizens. APP pursues its mission with ?eld teams on the ground dedicated to engaging these citizens in the public policy process to enact tree-market policy. IN THIS REPORT Page 1 OUR CAPABILITIES Overview of integrated grassroots strategy to impact policy outcomes. Page 3 2014 EN HANCEMENTS Investments in long-term infrastructure in 2013 deliver success in 2014 and beyond. Page 11 WHY WE FIGHT The moral case for free enterprise and ending the culture of dependency. Page 13 OUR PATH FORWARD Overview of 2015 strategy, focus states, and legislative agenda. Page 16 THE FIRST 100 DAYS 2015 federal policy agenda. - AMERICANS FOR PROSPERITY OUR CAPABILITIES Empowering Americans to Stand Up for Their Economic Freedom APP has built a grassroots infrastructure of professional ?eld staff, volunteers, and investors dedicated to developing, executing, and testing outreach programs that meet everyday citizens where they are in life and educate them on principles of a free society. A Real Grassroots Infrastructure in Place to Achieve the Mission 33 Chapters with State Directors in 2014 A: 2 Million Activists Nationwide 200 Professional Field Staff on the Ground State-of?the-Art Ground and Data Gathering Operation .il Commitment to Robust Testing of all Programs to Ensure Best Outcomes -. Rl-2.199 cr: 78.398 . . 001902 I i I I Existing AFP State Chapters New 2013 Chapters ln-state activists totals as of January 2015. New 2014 Chapters I Proposed New 2015 Chapters AFP PARTNER PROSPECTUS L'tilizing our tried?and-true mix of grassroots outreach, local events, and paid media, AFP will continue helping the public understand how market-based policies and free enterprise help people improve quality oflife for themselves and all members of their community. AFP will also continue empowering citizens to hold politicians accountable for votes against economic freedom and offer support to those who promote it at the local, state, and federal level. Knocking on Doors AFP staff and activists utilize a mobile canvassing platform that integrates household data, GPS mapping, and survey software to map canvass routes and log responses in real?time on their mobile devices. Making Phone Calls Americans not reached by door efforts are called by activists utilizing our online ?Freedom Phone? predictive dialing system. Volunteers log-in from any Wi-Fi hot-spot where they can View the name of the call recipient, call script, and survey questions on a personal ?dashboard.? Hosting Town Hall Events AFP partners with state-level think tanks, issue advocacy groups, and policy experts to host town halls to deliver the facts on policy reforms. These events help educate attendees and generate earned media coverage to reach broader audiences. Running TV, Radio, and Online Ads AFP runs national and state-based TV, radio, and online advertising to highlight key components and successes of pro-freedom legislation. The ads also hold politicians accountable for their votes and lay the groundwork for a real conversation about the merits and results of pro- freedom reforms. AMERICANS FOR PROSPERITY 2014 ENHANCEMENTS Investments in Critical Infrastructure in 2013 Deliver Success in 2014 Beyond Following an organization-wide review of our 2012 ?eld efforts, AFP took major steps to enhance and re-tool four key areas ofour grassroots infrastructure: 1) state-based staf?ng model, 2) mobile canvassing technology, 3) messaging techniques, and 4) data-gathering operation. I It t? -- ?d Developed a Closed-Loop Data System: With thousands ofactivists knocking on doors, making calls, and simultaneously sending survey data back into the system, AFP experienced delays in updates and some data inaccuracies during critical phases of our 2012 organizing efforts. In 2013 and 2014, AFP developed and relentlessly tested a closed?loop data system in which volunteer and membership information is automatically updated in the home server in real-time as organizing efforts are underway. Deployed New Technology in the Field: With a strong database platform in place, AFP built a mobile canvassing app that integrates household data, GPS mapping, and survey software. 'Ihe app was uploaded on APP-issued iPads and mobile devices for volunteers to map canvass routes based on a household's af?nity to economic freedom and log individual survey responses on their mobile device in real-time. Similarly, AFP built an online predictive dialing system that allows volunteers to log-in from any Wi-Fi hot-spot and call priority households not reached by door efforts. When logged in, activists view a new personal ?dashboard? displaying the name ofthe recipient, call script, and survey questions. Colorado \?pringsu AFPV PARTNER PROSPECTUS 5% Grew Our Field Staff Ranks: In 2012, the Left dramatically outnumbered AFP's ?boots - on the ground" in key states. Moreover, most ofthese liberal community organizers had been embedded in their respective communities since 2007, building relationships with citizens and mobilizing supporters around their Big Government agenda. To match these eitorts in key - states, AFP began growing its full-time ?eld presence from just over 100 staffers in 2012 to over 500 staffers in 2014. By April, these staffers organized daily door walks and phone banks?utilizing the canvassing and predictive dialing technology discussed above?to citizens, engage in issue persuasion - efforts, and turn Americans out to vote in October and November. This ground game will remain in place throughout 2015 to further bond citizens to AFP and empower citizens with - the tools to urge lawmakers to support of pro?freedom policy. Launched New Messaging capability: The Left had a superior messaging and implementation strategy to identify demographic targets. determine which issues resonated best with which groups, and deliver speci?c messages over TV, radio, and online for those audiences. in response, AFP adopted a test-and-learn approach that paired creative content with our growing data capabilities. This helped us identify speci?c audiences we needed to reach and relentlessly test to hone the right message. The result was a portfolio of messages that told compelling stories of how real people are being hurt by Big Government policies. - AMERICANS FOR PROSPERITY GRASSROOTS ENHANCEMENTS DRAW THE FIRE ?Most of the ads we see, we think, come from Americans for Prosperity. That?s their ?name.?? v.1? ?Iv ?There?s plenty of horror stories being told. All are untrue, but they?re being told all over America.? just that: tales, stories made up from whole cloth, lies.? . .-.-. -. .. . - .- -. - - ?Those tales turned eut to I: I: AFP PARTNER PROSPECTUS I I . THE HUFFINGTON POST HARRY REID PROPOSES CHANGING CONSTITUTION TO BLOCK THE KOCH BROTHERS Bitiberzi 29L I: For much of this year, she and nearIy three dozen Other stafiers in the state have helped build Americans for Prosperity?s data-driven effort: amassing teams of volunteers who go door to door coIIeCting information on voters and the nationaI and local issues that matter to them. rs in 35 states and OCTOBER I I. 2014 The organization has more than 500 paid worke ive movement?s beSt organized, most has become one of the conservat groups. BuiIding on the communitybased approach fuIIy in 2008 and 2012, it now has powerFuI outsid President Barack Obama used success atched among GOP?af?liated operations and is a poIitieaI footprint unm king up IegisIative 53hr New ?ork Eimcs 4 OCTOBER 25. 2014 So now, even before Emma Benson, a ?eId direcror for the conservative political organization Americans for Prosperity, knocks on a door, she has more than 700 data points about the person behind it, Iike magazine subscriptions, car ownership (make, model, year), propensity for voting, and Iikes and diinkes mined from Facebook and Twitter, from rock bands to basebalI teams. rac i i" AMERICANS FOR PROSPERITY THE 2014 STRATEGY IN ACTION With data-driven iPad tablets in?hand, AFP staffand activists knocked on more than 2.4 million doors (up from 250,000 in 2012), made more than 7 million phone calls, and built out a professional ?eld team of 539 staffers in key states?all dedicated to educating Americans on the opportunity and prosperity that come from liberty and economic freedom. In addition to ground efforts, AFP got on air early in July 2013?and continued through September 2014?with powerful testimonies of real Americans suffering under Obamacare because ofcancelled insurance, higher premiums, and loss of doctors. 'lhese ads helped the failures of Obamacare and Big Government?s broken promises in the public?s mind through 2014. And as we entered into October, AFP transitioned from and issue?based persuasion elforts to conduct a get-out-the-vote operation, driving liberty-minded voters to the polls in droves in key states like Colorado, North Carolina, Arkansas, Louisiana, Florida, and others. These efforts were all driven by a sophisticated data gathering and tracking operation the New York Times, i-t'lishington Post, CNN, and others described as ?incredible? and illustrate ?how rapidly AF is moving to try to catch up with the left.? 2014 Focus States: AFP PARTNER PROSPECTUS 2.4 Million Doors Knocked A I I . 7' 7.5 Million Calls Made . 11"" . ut?wgt l" $60 Million Spent on 1 TV, Radio, and Online Advertising TEVEPERW - uranium? . AMERICANS FOR PROSPERITY MEASURING OUR EFFECTIVENESS Utilizing randomized lield tests, AFP extensively tested everv one ot?its outreach techniques (doors, phones, mail, print media, ads, etc.) in 2014. 'lhe results ofthis analysis will help AFP verify which combination of methods most e?ectivelv: Educates Americans on how pro?economic freedom policies at the local, state, and federal level allow people to improve their lives; 0 Urges Americans to hold their elected o?icials accountable for votes in favor of Big Government overreach, and; 0 Turns citizens out to vote on Election Day through non?partisan get-out-lhe?vote efforts. 'lhanks to our new closed?loop data system, APP is currently in the process of matching responses back to our data ?le to verify which techniques were most e?ective with each demographic. These consistent ?test-and-learn? efforts will help ensure AFP is allocating, donor dollars and statl?time e??ectivelv. we will be able to identify trends among demographics and design scalable outreach programs tth? ?Test-and-Learn? to Improve Impact in the Field Are white males 60 years and older more likely to fill out a ?citizen lD? survey by mail or through a visit at their door step from an activist? Are Hispanic women more likely to vote when contacted by an AFP activist over the phone or through a strategically-placed ad in the local newspaper? Is a combination of phone and door contacts better at persuading someone on our issues than five pieces of mail? Which of types of TV, radio, and online messages resonated best with different segments of the population? Answers to these types of questions are crucial for determining which resources to deploy?and when in the midst of an issue battle- IPLEDGE in 201-1 AFP PARTNER PROSPECTUS m5 FIRE f5; "1km - . Ci) uosumw ?Emmet: Photos abuvc: AFP?chrgia activists and stuff. 1O AMERICANS FOR PROSPERITY WHY WE FIGHT Ensuring the ?Pursuit of Happiness" for All Americans Earned success?the beliefthat you are creating value with your life and for those around you?is a key driver ofhuman happiness and well-being. Analysis conducted over the last 50 years from hundreds ofstudies by social scientists?and recently compiled by Arthur Brooks and fellow researchers at the American Enterprise Institute (AEI)?de?nitively show this to be the case: people are happiest when they are working to earn their own success, rather than when someone else?whether it be a family member, the government, or just plain luck?provides for their personal and economic well-being. In fact, this same body of research demonstrates the more ?un-earned? success people acquire (welfare payments, winning the lottery, inheritance, etc.), the more unhappy they are long-term. How earned success is measured is unique to each individual person. For some, it?s taking a risk, building a business, and pro?ting from its success. For others, it is raising great kids, or creating beautiful art, or making sure people don?t go to bed hungry. This ideal embodies the ?American Dream" and our Founders? promise of the ?pursuit of happiness?? the ability to pursue our vision of earned success by doing our best to pour ourselves into faith, family, community, and merit-based work. The system that makes this possible for the most people is free enterprise. It is the moral core of our effort and why we must struggle to preserve it for all. 11 THE THREAT TO FREEDOM AND HUMAN WELL-BEING For years, advocates of a free society have not ef- fectively communicated the bene?ts of economic freedom in ways that reach the most people. While we often see glimmers of hope for positive tax, spending, and entitlement reform after an elec? tion, the public?s support for these market-based proposals are thwarted by the Left?s array of ?class warfare? tactics. In the face of these attacks, pro?liberty supporters continue to make solely materialistic arguments for policies and an economic system that we know to be moral at their core?a system of true fair- ness and opportunity, that rewards merit and hard work. More than just demonstrating the inherent waste, inef?ciency, and damaging effects of Big Govern- ment on the economy, our effort must also demon- strate how policies that redistribute earned wealth and punish incentives to create are hurting the very people the Left purports to help. The 2012 presidential elections showed us Ameri- cans place a great importance on taking care of those in need. Polls taken on this issue consistently showed Americans believed Barack Obama ?cared about people like me??and the poor?far more than Mitt Romney. While most believed Mitt Romney would be a better leader and understood the econ- omy, polls showed that people thought President Obama's ?heart was in the right p1ace??especially his intent and concern for helping our nation?s poorest citizens. More broadly, we consistently see that Americans are concerned that the American free enterprise system?and its advocatesubene?ts the rich and powerful more than the most vulnerable of society. And for years, the Left and progressives have ef- fectively communicated this ?moral,? albeit incor- rect, case. They have better articulated they ?care? about the lot of their fellow man, and ultimately by redistributing wealth from the so-called ?rich? of society to the most vulnerable, they will improve the well-being and happiness of Americans. The irony is maddening. America?s poor have been shackled by decades of progressive policy, from welfare-induced dependency to job killing taxes and regulations, that limit their opportunity to climb the economic ladder. Consider this: the percentage of people globally living on a dollar a day or less?a traditional pov- erty measure?has fallen by 80 percent since 1970. This is the greatest antipoverty achievement in world history. It is not the result of philanthropy or foreign aid, but rather the proliferation of private property rights, free trade, and rule of law that has given people the freedom to earn their success and pull themselves out of poverty. However, proving this crucial point with key audi- ences using statistical and factbased arguments alone does not go far enough. We must demon- strate our commitment to helping people improve their lives and economic fortunes. The earned suc- cess?and therefore the happiness?of all Ameri- cans is at stake 12 AMERICANS FOR PROSPERITY OUR PATH FORWARD Fighting for Human Well-Being While the Left traps more ofour fellow Americans into government dependency, AFP is running outreach programs, educating citizens, and pressuring lawmakers to enact policies that help people create their own prosperity and escape the cycle of poverty. It is our belief that to win hearts and minds, we must focus on how the policies we promote help people?specifically society?s most vulnerable?improve their lives as they deem best for themselves and their families, not as Big Government advocates dictate. To that end, AFP is focused on moving legislation forward in Congress and state legislatures in the following areas as oppmtunities arise: i <3 Taxes Push for a comprehensive tax reform plan that attempts to lower rates, repeal special handouts for politically?connected cron}r businesses, and simplify the tax code. Spending Advance legislation that makes common-sense reductions to government spending, forces government to live within its means, and returns to a regular budget order and appropriations process that will help put an end to the kind oflast?minute, wide ranging spending bills that have driven America further into debt. Energy Promote policy reforms that enable the development of reliable energy from all sources and push back against the Obama Administration?s climate change executive overreach, energy mandates and expensive handouts for costly and ineffective ?green energy.? Healthcare Stop and dismantle Obamacare to the greatest extent possible and advance policies that ensure Americans can control their own health care decisions, access their own doctors, and choose affordable health care options tailored to their family?s needs. 13 AFP PARTNER PROSPECTUS CREATING A CULTURE OF FREEDOM Our Role as an Organization in the Marketplace of Ideas AFP and our Board of Directors rely on what we call the ?Structure of Social Change" as our model for understanding how ideas are transformed into action and policy in our society. This concept is an adaptation of economist EA. Hayek?s theory ol?the ?structure ofproduction??which illustrates how a free economy re?nes and transforms raw goods into usable consumer products. The higher stages represent investments in producing basic inputs, or ?raw materials.? The middle stages convert raw materials into products that add more value than these raw materials have if sold directly to consumers. The later stages package, transform, and distribute these outputs to the ultimate consumers. By analogy, in the ?Slructure ot?Social Change," academia represents the higher stages of?production"? devising and testing theories and ideas, or ?raw materials.? Think tanks then take amorphous ideas to conduct further research and analysis to produce policy white papers. Educational outreach groups transform white papers into relatable products and education materials for everyday Americans to learn and understand. Over time, an educated citizenry engages in the democratic process, where ideas are turned into law. Place in the ?Structure of Social Change??lssue Advocacy and Educational Outreach Scholars and academics devise and test theories and ideas. Researchers analyze and test academics? findings to produce official policy white papers for broader public consumption. Transform complex and ?wonky? ideas into relatable educational materials and distribute for citizens and lawmakers to learn and understand. issue Advocacy and Educational Outreach Lawmakers debate ideas and enact policy. l4 AMERICANS FOR PROSPERITY THE REAL WORK BEGINS Driving a Pro-Freedom Agenda at the State and National Level As a result of our critical investments in grassroots infrastructure, we enjoy a policy environment decidedly more favorable to economic liberty. However, we are aware ofthe coming pressures and temptations elected o?icials will face to renege on their commitments to advance free enterprise. AFP is in a unique position to help remind and encourage these elected officials to keep their promises. While most organizations focus only on short bursts of activity around elections or legislative sessions, AFP is investing in creating a continuous culture of freedom, year after year. Our core, long?term focus remains the same: Educate Americans on the power of free enterprise to improve the well- being and opportunity for themselves, their family, and members of their community?and empower them to advance these policies at the local and state level. Over time, an educated citizenry will help create the conditions for expanding economic freedom at the federal level. For 2015, State Directors and ?eld staff will continue to grow their permanent presence in all of our state chapters, but AFP will he devoting additional resources to the following states to pressure state and federal lawmakers: 15 FIRST 100 LEGISLATIVE AGENDA federal strategy continues to focus on st0pping the worst elements of President Obama?s Big Government economic agenda and advance pro-freedom policies where opportunities exist. In 2015, there are a greater number of elected of?cials who we believe will be supportive of economic freedom in the House and Senate than in recent years. We are focused on encouraging all lawmakers to vote and pass market-based legislation in critical areas of energy, healthcare, and budget reforms. While it is unlikely President Obama will sign any comprehensive measure, we believe that over time there will be enough political pressure for him to act?or face public backlash. Below are key policy ?ghts where AFP plans to engage at the national level in the ?rst 100 days of 2015. Our focus on these policies may change as new threats or opportunities arise in the weeks ahead. This outline merely serves as a framework for our path forward. We also have extensive plans in each of our state chapters to advance freedom-oriented policies at the local and state level. 16 AMERICANS FOR PROSPERITY HEALTHCARE Medical Device Tax Repeal Summary: 'lhe US. is the only country that imposes a tax on the sale of medical devices like insulin pumps and heart valves. As a result, the businesses that make these products are subjected to high taxes, hampering innovation and increasing the cost oflife~ saving devices. lhe repeal ofthis tax enjoys the support ot'a broad cross?section ol?lawmakers and will likely command bipartisan majority support in both chambers, possibly even enough to break a ?libuster in the Senate. Rede?ne Full?Time Work as 40 Hours for Purposes of Obamacare Summary: Starting next year under ()bamacare, companies with at least 100 full-time workers are required to offer health coverage to those workers or face ?nes. ll hose with at least 50 full?time workers must provide coverage to their full-time workers by 2016 or face ?nes. With ()bamacare?s current de?nition of a fullvtime workweek at 30 hours, many employees will be forced to reduce the weekly hours for many employees or lay employees off altogether to avoid ?nes and penalties. 'lhe House has already passed a number of measures to raise the 30 hour threshold to 40 hours. The measure will likely garner majority support in the Senate. although perhaps not enough to break a ?libuster. ENERGY Keystone Pipeline Summary: The pipeline, which would deliver thousands of barrels of oil a day from Canada to the Gulf Coast, has been mired in bureaucratic federal planning and analysis requirements for more than six years. According to the Obama Administration?s own State Department studies. construction ofthe project would create thousands ofjobs and inject billions into the economy. 17 PARTNER PROSPECTUS . . . . . . - . The House has voted to approve this project nine times since 2011, falling one vote short of the 60 required to break a ?libuster in the Lame Duck Senate in November. Wind Energy Subsidies (Wind Production Tax Credit) Summary: The wind production tax credit (PTO?the main federal handout for the wind industry? was allowed to expire in 2013 after an AFP-led coalition of 100 center-right organizations urged lawmakers against reauthorization.. The credit is nothing more than corporate welfare for a politically- favored industry. Not only does it not produce cheaper energy, it also threatens the reliability of the energy grid and increases costs for consumers. In 2015, AFP will continue to keep pressure on the Senate Finance and House Ways and Means Committees to ensure the wind PTC is not reauthorized in a tax-extenders package. Defund Onerous EPA Regulations Summary: Congress can push back against President Obama?s EPA through the appropriations process by passing an amendment to that would prohibit funding for Section 111(d). This section is the power plant rule that require states to cut their carbon emissions by 30 percent on average. This would mean that the federal government would not be able to provide funds to help states implement the new rules, which would make it cost prohibitive for states to implement. TAXES AND SPENDING Return to Regular Budget Order Summary: Regular order is a year-long process that determines how the federal government spends taxpayer dollars. This has not happened for the last ?ve years. Every year, the President and each congressional budget committee are required to release their own budget resolution and ultimately agree to a budget by April 15. Congress is then supposed to appropriate these funds in 12 separate bills using the committee process. This process is very transparent, and each member of Congress has an opportunity to offer amendments. The status quo of rolling 12 appropriations bills together in one massive package and fast- tracking it to the President?s desk is hugely concerning because it doesn?t allow for close scrutiny of how taxpayer dollars are being Spent. It prevents Congressional appropriators from combing through the budget and making tough decisions about budgeting and spending. 18 TAXES AND SPENDING, The Senate appears more likely to produce a budget resolution on time than in previous years. Eliminate Penalty for Repatriation of Overseas Pro?ts Summary: The United States is currently one of the only developed economies which uses a worldwide tax system. Under this system income earned abroad is taxed at both the local rate and nearly 40 percent when it is repatriated to the U.S. As a result, U.S companies are sitting on nearly $2 trillion dollars of income that is ?parked? overseas income that isn?t coming back to the US. because ofthis onerous tax requirement. Instead, many companies are seeking ?inversions,? an approach where the companies acquire or are acquired by a foreign company in order to put their billions of dollars overseas instead of here at home. Death Tax Repeal Vote Summary: Currently, the top federal rate on the taxable estates is 40 percent. By repealing the tax, people would be more likely to save and invest knowing that the federal government would not seize nearly halt?of their estate when they die. "[hey would also be more likely to start businesses, buy new equipment, and hire more workers?creating nearly 1 million small business jobs, according to the CBO. Repealing this tax sees bipartisan and bicameral support. 'lhis past session, 235 Representatives in the House co-sponsored legislation repealing the measure. 19 CONCLUSION As a result of our critical 2013 and 2014 investments in grassroots infrastructure, we enjoy a policy environment decidedly more favorable to economic liberty. For 2015, AFP remains focused on educating citizens on the bene?ts of a free society and empowering them to urge lawmakers to enact pro-freedom reforms at the state and federal levels. In the coming weeks and months, politicians will be tempted and pressured to renege on their commitments to advance free enterprise. AFP is in a unique position to help remind and encourage these elected officials to keep their promises. Building off signi?cant improvements in staf?ng, technology, and data in this year, AFP is committed to moving market-based tax, spending, energy, and healthcare reform forward as opportunities arise in Congress and state legislatures. While most organizations focus only on short bursts of activity around elections or legislative sessions, AFP is investing in creating a continuous culture of freedom, year after year. Will you join us? 20 AFP has a proven track record. We have a transformational blueprint for success. And you?re the missing piece. Invest in plan to save America AMERICANS FOR PROSPERITY