Small Donor Public Financing Plays Role in Electing Most Diverse New York City Council

On Tuesday, New York City voters elected the most diverse and representative legislature in the city’s history. The numbers of women and people of color elected increased significantly, better reflecting their numbers in the city’s general population, our analysis of candidate demographics found. A robust small donor public financing option for campaign fundraising, where candidates can join a city program that matches modest donations they earn from residents by $8-to-$1, played an important role in these trends.

Women, who are 52 percent of residents, will increase their representation on the city council from 27 percent now to 61 percent come January. ¹ People of color, who are 68 percent of residents, will increase their representation on the council from 51 percent now to 67 percent. ² Women of color in particular drove these racial and gender diversity gains, running and winning in sufficient numbers to more than double their seats in the 51-member body. ³

New York City’s small donor public financing program “was one of the factors that opened the opportunity for more women from diverse backgrounds to run for office,” Jessica Haller, executive director of 21 in ’21, an organization devoted to gender equality on the council, told us. Her colleague and vice-chair, Yvette Buckner, explained that public matching dollars enabled women to invest in campaign tools such as digital outreach to broaden and diversify their levels of engagement, which was critical in a pandemic election.

Our analysis of city campaign finance records and the demographics of candidates bears out the strategists’ observations. ⁴ Among the women and people of color who won city council seats this week, 97 percent raised money through the voluntary small donor public financing program. Remarkably, they and other candidates of color and female candidates who were competitive in the primaries raised as much, on average, as their white and male counterparts. ⁵ (In New York City, the primary election of the incumbent party, more than the general, tends to be the contest that matters most. Indeed, as of this writing, only one council district will definitely flip parties in 2022, even in a cycle that saw unusually high major-party competition. ⁶).

These findings stand in stark contrast to typical trends in U.S. campaign finance, where historical disadvantages hinder candidates of color and female candidates in the race to raise big money from wealthy donors. ⁷ Research shows women and people of color running for office tend to rely more on small donors than their male or white counterparts and, thus, especially benefit from public matching models.

To use New York City’s small donor public financing program, a candidate first must show a sufficient level of public support by raising a threshold sum in small donations from a minimum number of residents. The candidate must also follow strict disclosure rules and contribution limits and earn every dollar they receive in public funds by raising matchable contributions from city residents. Participation is voluntary: candidates can, instead, raise money strictly through private donations.

The program has seen a number of improvements over its three decades, including increases in the size of the match. This year’s was the first citywide election to happen after 80 percent of voters decided in a referendum to increase the public financing match from $6-to-$1 to $8-to-$1 and to slash contribution limits in city council races from $2,850 to $1,000. Many of this cycle’s history-making candidates credit this increase for encouraging them to run and empowering their grassroots campaigns.

Our analysis found race and gender equity in fundraising across all competitive council candidates in the primary. ⁸ Among these candidates, men and women raised, on average, nearly the same amounts, with women raising 4 percent more than men. White candidates and candidates of color also raised, on average, nearly the same amounts, with candidates of color raising 2 percent more than white candidates. These candidates also relied to similar degrees on small donations and public matching funds in their fundraising, regardless of their race or gender identity. ⁹ This remarkable parity in fundraising trends held true not just for council candidates overall, but also in one-to-one contests when the top two candidates in a given district were of different races or genders. ¹⁰

To be sure, the city’s small donor public financing program was not the only election reform in play this year. Term limits, in place since 1993, opened more than half the council seats to newcomers, a window of opportunity not seen in two decades. ¹¹ Ranked-choice voting, adopted by ballot referendum in 2019, converted the primary from a winner-take-all contest to one that cycled through voters’ rankings of up to five candidates until one candidate received more than 50 percent of the vote. Research on term limits and ranked-choice voting, however, shows the policies do not always have the effect some proponents seek of increasing diversity and representation, sometimes resulting in the opposite. ¹² Indeed, the historical barriers that women, people of color, and particularly women of color face in traditional fundraising have impeded their ability to compete even for open seats.

New York City’s public financing program continues to be a model for jurisdictions looking to address historical inequities in fundraising. In 2020, New York became the first state to enact a matching program since Citizens United. Last year, several cities held their first elections with either new public financing programs or recently increased matches. After enacting its program, Portland, OR, saw contribution sizes shrink but more small donors participate even in non-wealthy zip codes. In Washington, DC, the new Fair Elections Program diversified the donor pool, increasing participation most dramatically in areas where more people of color and lower-income residents live. Ahead of the 2020 elections, San Francisco increased its match from $2-to-$1 to $6-to-$1 and saw private funds become less important to candidate spending than in previous elections. These trends line up with research showing the policy increases diversity and participation among small donors and incentivizes candidates to seek more support from the constituents they seek to represent.

Candidates across the country attest to the democracy-enhancing benefits of small donor public financing. The policy enables them to spend more time with their constituents, improving the responsiveness of government, officials elected with public financing told us earlier this year. And it helps break down barriers to entry that historically have disadvantaged women and people of color. New York Attorney General Letitia James, who previously became the first Black woman to win citywide office using New York City’s small donor public financing program, told us that “public financing is a critical tool to ensure that more people from more diverse backgrounds have the opportunity to hold elected office and serve our communities.” She stressed, “It’s imperative that our government be reflective of the people it represents.”

Congress could be next. A small donor public financing program for U.S. House races currently awaits passage as part of the Freedom to Vote Act. The legislation would provide congressional candidates the opportunity to opt into a match similar to New York’s. Congressional public financing would help close the fundraising gap that persists for women, candidates of color, and especially women of color, and increase diversity on Capitol Hill as it has in City Hall.