HOW TO REFORM CAMPAIGN FINANCING TODAY TO PROMOTE DEMOCRACY

Here are the three takeaways from this post:

• Our current system of election financing gives wealthy special interests outsized influence.
• Using public funds to magnify small donations to campaigns can change this.
• New York State is implementing an innovative campaign financing system for the 2024 elections that significantly magnifies small donations and could dramatically reduce the influence of wealthy special interests.

(Note: If you find my posts too much to read on occasion, please just read the bolded portions. They present the key points I’m making.)

Current campaign financing systems in the U.S. allow a handful of wealthy special interests to dominate election funding and, therefore, gain undue influence in policy making. The 2010 Supreme Court’s Citizens United ruling ended decades of campaign finance laws that maintained a reasonable semblance of democracy. Now, wealthy individuals and corporations, often using Political Action Committees (PACs) and dark money non-profits (501(c)(4) organizations that don’t have to disclose their donors), have become the dominant funders of campaigns.

In the 2022 election cycle, $16.7 billion was spent on national and state elections. The biggest donors (organizations and individuals donating $1,000 or more) have been consistently increasing their share of election spending since the 2010 Citizens United ruling, which (along with other court rulings) allows unlimited spending by wealthy special interests.

The most effective immediate solution, given the Supreme Court’s rulings, is using public funds to magnify small donations. New York City has had such a campaign financing system in place since 1988. It offers a six-to-one match for donations up to $175 by city residents. Therefore, an ordinary resident’s donation of $50 or $100 now has the clout of a much larger contribution – $350 or $700, respectively. As a result, more people are donating, because their small contributions are more impactful and their voices are amplified. This has also led to higher voter turnout. [1] (For more details see this previous post.)

New York State will implement a new, innovate system using public funds to magnify small campaign donations in its 2024 elections for statewide and legislative offices. In its 2022 elections, the 200 biggest individual campaign donors gave $15.9 million, outweighing the 206,000 donors of $250 or less who gave a total of $13.5 million. In addition, millions of dollars were spent by big donors through PACs and dark money organizations, further amplifying their influence.

Candidates in 2024 will have the option of participating in the new campaign financing system. Those running for statewide office who opt-in will receive $6 of public funds for every $1 of small donations (up to $250) from New York residents. Candidates for the legislature who opt-in will receive public funds magnifying small donations from residents in their districts on a sliding scale ranging from $12 for every dollar from donors of $50 or less to $8 for every dollar from donors of $150 to $250. To qualify to receive public funds, a candidate must raise a threshold number of small donations from their constituents and those in lower income districts will require fewer donations to qualify. There is a cap on how much public money a qualified candidate can receive and they must abide by limits on the size of contributions. Fundraising and spending must be publicly reported and will be subject to strict oversight and enforcement. [2]

Modeling of the effects of this new campaign finance law based on the 2022 elections for the NY legislature shows that it has the potential to flip the predominant source of campaign money upside down so more money is coming from small-donor constituents than from wealthy special interests. In New York’s 2022 elections, 11% of campaign donations to candidates for the legislature came from small donors ($250 or less) and 69% came from big donors ($1,000 or more from an individual or organization). If all candidates participate in the new campaign financing system and donations came from the exact same set of donors, 53% of campaign money would come from small donors (up from 11%) and 39% would be from big donors (down from 69%), flipping the source of the majority of campaign funds.

Moreover, a significant increase in the number of small donors is likely and would dramatically increase their impact. New York City’s public financing system produced a significant increase in campaign donors and it now has a rate of donor participation that is about twice that of the rest of the state. If, with the new financing system, the statewide donor rate matched that of NYC, small donors would provide 67% of campaign funding (up from 11%) versus 28% from big donors (down from 69%). This would be a watershed change with the financial weight of small donors being six times what it was in 2022.

For New York’s statewide races (i.e., governor, lt. governor, attorney general, and comptroller), a similar effect would be expected. In 2022, small donors provided just 6% of these candidates’ funds and big donors contributed 90%. With all candidates participating in the new system and the same contributors, small donors would provide 27% of the funds, 4 ½ times what it was. If the number of small donors doubled, their share would increase to 41%, almost seven times what it was. The governor’s race and its high dollar amounts skews this result.  If only the other three offices are considered, the small donor share of funding with a doubling of their numbers would be 73% of candidates’ funds compared to just 27% for big donors.

Election systems with significant public funding have been operating in Arizona, Connecticut, and Maine for a number of years. Roughly a dozen other states and some municipalities also have some public funding for elections.  Bills have been offered in Congress that would create a campaign financing system for congressional elections that is similar to New York City’s.

In New York City, the system of public funds magnifying small donations has changed candidates’ attitudes and approaches to the voting public and to the solicitation of donations. It has muted the importance of large contributors, motivated more citizens to run for office, and made races more competitive. Candidates spend less time fundraising and can, therefore, be more engaged with and responsive to their constituents.

Using public funds to magnify small donations has multiple benefits: [3]

• Reduces the importance of big donors, thereby reducing the influence of wealthy special interests.
• Amplifies the voices of average voters and their small donations, and can be used to amplify only those donations coming from constituents, i.e., residents of the area the candidate would represent.
• Encourages more citizens to make campaign donations and to vote.
• Incentivizes candidates to seek broad support from many voters in their jurisdiction, as opposed to focusing on support from a few wealthy backers, including out-of-district interests.
• Enables more people, and more diverse people, to competitively run for election.
• Supports candidates in being competitive without big donors and even when an opponent has big donors.
• Allows candidates to spend less time fundraising and more time interacting with voters and talking about issues.

I encourage you to support the use of public funds to magnify small donations to candidates’ campaigns. It will make our elections more democratic. I also encourage you to make contributions of whatever size to candidates who are running to represent you, and to get to know them and your elected officials at the local, state, and federal levels. This is what makes democracy work!

[1]      Migally, A., & Liss, S., 2010, “Small donor matching funds: The NYC election experience,” The Brennan Center for Justice (http://www.brennancenter.org/publication/small-donor-matching-funds-nyc-election-experience)

[2]      Vandewalker, I., Glavin, B., & Malbin, M., 1/30/23, “Analysis shows amplification of small donors under new NY State public financing program,” The Brennan Center for Justice (https://www.brennancenter.org/our-work/research-reports/analysis-shows-amplification-small-donors-under-new-ny-state-public

[3]      Brennan Center for Justice, retrieved 2/1/23, “Public campaign financing: Why it matters,” (https://www.brennancenter.org/issues/reform-money-politics/public-campaign-financing)