Donor Diversity Through Public Matching Funds

May 14, 2012

New York State is considering a system of public campaign financing for state elections similar to New York City’s small donor matching fund program, based in part on the assumption that it would bring greater fairness and diversity to state elections. The results of this new study support that claim. The study shows that small donors to 2009 City Council candidates came from a much broader array of city neighborhoods than the city’s small donors to 2010 State Assembly candidates.

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Executive Summary

New York State is considering a system of public campaign financing for state elections similar to New York City’s small donor matching fund program. The city’s system matches at a six-to-one ratio the first $175 a city resident contributes to a candidate participating in the voluntary program. In endorsing a reform for the state that mirrors the city system, New York Governor Andrew M. Cuomo claimed that a multiple-match public financing system would bring greater equality to state elections.

Candidates who have participated in both New York City and New York State elections agree. They have told us that by pumping up the value of small contributions, the New York City system gives them an incentive to reach out to their own constituents rather than focusing all their attention on wealthy out-of-district donors, leading them to attract more diverse donors into the political process. This is markedly different, they explained, from how they and other candidates conduct campaigns at the state level.

These claims, if true, suggest that the city’s public financing system has contributed to a fundamental change in the relationship between candidates and their donors in New York City. In this new joint study, we analyze data on donations to candidates in New York City in the most recent sets of elections at the city and state levels to see whether the data are consistent with these claims — in other words, whether greater participation by small donors in city elections translates into more diverse participation.

The results for the elections we analyzed are remarkable. Small donors to 2009 City Council candidates came from a much broader array of city neighborhoods than did the city’s small donors to 2010 State Assembly candidates.

  • Almost 90 percent of the city’s census block groups were home to someone — and often, many people — who gave $175 or less to a City Council candidate in 2009. By contrast, the small donors in the 2010 State Assembly elections came from only 30 percent of the city’s census block groups.
  • The neighborhoods in which City Council small donors reside are more representative of New York City as a whole. They have lower incomes, higher poverty rates, and higher concentrations of minority residents than the neighborhoods where State Assembly small donors reside. All of these differences are statistically significant (p < .01).
  • Small donor participation in some of the city’s poor black, Asian, and Latino neighborhoods was far more robust in City Council contests. Twenty-four times more small donors from the poor and predominately black Bedford-Stuyvesant neighborhood and the surrounding communities gave money to candidates for the City Council than for the State Assembly. For Chinatown the advantage was 23 to 1. In the heavily Latino neighborhoods of Upper Manhattan and the Bronx, it was 12 to 1. The data support the claim that small donor matching funds help bring participants into the political process who traditionally are less likely to be active.
  • The poor neighborhoods of color we analyzed were also financially more important to City Council candidates than to State Assembly candidates. In financial terms, the donors from Bedford-Stuyvesant and surrounding neighborhoods were more than 11 times as important for City Council candidates as they were than for candidates running for State Assembly. For Chinatown, the figure was 7 to 1. Contributors from Upper Manhattan and the Bronx were more than three times as important in City Council elections.

We do not discount the relevance of other factors, such as term limits for City Council and city residents’ greater engagement in city elections, that may lead to greater diversity of participation in the City Council context. But available evidence — documented in the Methodology and Limitations section of this report — suggests that New York City’s public financing system plays a significant role in bringing about the striking results we found.

Ultimately, our data are consistent with the claims made by candidates who have run in both city and state elections. The city’s public financing system gives candidates an incentive to reach out to a broader and more diverse array of constituents to fund their campaigns. In so doing, the city’s public financing system appears to have achieved one of its key goals — strengthening the connections between public officials and their constituents.

 


Donor Diversity Through Public Matching Funds