Small Donor Public Financing

Small Donor Public Financing

From Seattle to New York, cities throughout the country are adopting small donor public financing programs to boost public participation, improve the way candidates campaign and raise money, and engage a broader array of citizens in the political process.

Across the board, individuals who run for public office are routinely asked the same initial question.

It’s not about their issues, passion for their community, or past accomplishments.

Instead, it’s about funding. “How much money can you raise?”

Unfortunately, an ability to generate funding—either from wealthy donors, special interest groups, or other sources—has become an essential requirement to run for office.

And it doesn’t stop once a candidate is elected. Op-eds written by US Congressmen lament the time they must spend asking for money—which is increasingly taking up more and more of their day.1

Then there are the other problems that stem from money in politics. Candidates can feel beholden to their top donors, who essentially use their money to purchase political access. Less wealthy communities that would not yield high campaign contributions are ignored by representatives.

Perhaps the most unfortunate result is that passionate, capable individuals who would make excellent representativeand advocates for their communities are deterred from running for office.

Is there any hope for change? We think so. Small donor public financing is a reform that provides an alternative to the current political system.

We discussed this topic at our last Colorado Common Cause happy hour, which took place on Thursday, August 4th 2016. Our Executive Director Elena Nunez gave an overview of how small donor empowerment programs work, which led to a lively discussion.

Here is some of what we learned:

Small donor public financing essentially serves as a grant program for candidates running for office. These public funds incentivize candidates to rely on individuals—as opposed to wealthy special interests—to fund their campaigns.

The way it works is relatively simple. Small donations from individuals are matched using a pot of government funds, which could be the government’s general fund, voluntary contributions, or another source.

Candidates who participate in these programs must agree to abide by certain rules. These may include limits on how much money they can spend and who they cannot take donations from—including unions, corporations, or super PACs. Candidates must also demonstrate that they have a significant base of support, so only serious candidates can participate in the program.

In the US, 13 states currently provide some form of public financing for campaigns.2 In New York City, donations of up to $175 are matched six to one by the city’s public funding program.3 In Seattle, voters are sent four $25 vouchers they use to fund the local candidates of their choice.4

Advocates of small donor empowerment programs argue that they boost public participation, change the way candidates campaign and raise money, and engage a broader array of citizens in the political process. But is this really true? 

The research on small donor empowerment programs backs up these arguments. One study of the 2009 New York City Council race showed that the city’s small donor matching program helped bring participants into the political process who are traditionally less likely to be involved—particularly those living in less affluent and more racially diverse neighborhoods.5

Another study focused on interviewing legislators from Connecticut, a state with a strong public financing program. The legislators reported that the public funds result in having more time to spend with constituents, feeling less of an influence from lobbyists, and being more aware of the needs of their communities.6
Although more research on this topic is needed, it is clear that small donor empowerment programs are one tool that cities and states can use to increase the impact of ordinary voters in government.

What are your thoughts? Tell us by commenting below, or join us at a future happy hour.