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Analysis: New York’s Big Donor Problem & Why Small Donor Public Financing Is an Effective Solution for Constituents and Candidates

Data from 2018 show that New York State elections are almost completely dominated by big donors. But if a $6-to-$1 small donor public financing program had been in place, an analysis shows, both the numbers of small donors and their share of overall campaign giving would have been significantly greater.

Published: January 28, 2019

The Prob­lem[1]

Data show that New York State elec­tions are almost completely domin­ated by big donors. The prob­lem is even worse than in federal elec­tions, where the outsize influ­ence of big donors is well known.

In the 2018 New York State elec­tions:

  • Just 100 people donated more to candid­ates than all 137,000 estim­ated small donors combined.[2]  (This does not even include the millions of dollars contrib­uted by LLCs and corpor­a­tions, which would skew the data even further to the wealth­i­est donors).
  • Small dona­tions amoun­ted to only 5% of all dona­tions to 2018 New York State campaigns. By contrast, small dona­tions amoun­ted to nearly 19% of all dona­tions to 2018 federal campaigns.[3] New York consist­ently ranks in the very bottom rung of states for parti­cip­a­tion by small donors.[4]
  • The major­ity of dona­tions came from people or entit­ies who gave more than $10,000.[5]
  • Out-of-state donors gave nearly three times more than all small-donor New York­ers combined. Nearly all of that out-of-state money (close to 90%) came in dona­tions of $1,000 or more.[6]
  • Big New York donors under-repres­ent the geograph­ical, socioeco­nomic, and racial diversity of the state. Two-thirds of big donors (who gave $10,000 or more) came from just three afflu­ent counties: New York, Nassau, and Westchester.[7] Big donors tend to live in neigh­bor­hoods where more resid­ents are white, wealthy, employed, and have higher educa­tion, compared to small donors, accord­ing to census data.[8]

The Solu­tion

A well-designed public finan­cing program that matches small dona­tions for candid­ates who choose to opt in will signi­fic­antly increase the parti­cip­a­tion of every­day New York­ers as donors and the diversity of New York’s donor class. 

A $6-to-$1 small dona­tion match program as in Gov. Cuomo’s current public finan­cing bill (and similar to past bills in the Legis­lature) could have dramat­ic­ally increased the role of small donors if it had applied in the 2018 New York State elec­tion.[9]

  • Assembly candid­ates could have raised three times as much from small donors. Small donors could have been the single biggest source of Assembly campaign funds.
  • Senate candid­ates could have raised five times as much from small donors.
  • Small donors could have been the biggest source of fund­ing for a major­ity of legis­lat­ive candid­ates in 2018.
  • Nearly every Assembly candid­ate and 91 percent of Senate candid­ates could have raised, using small donor public finan­cing, as much as or more than they actu­ally did.

Multiply­ing the impact of small donors will boost the repres­ent­at­ive­ness and diversity of New York State’s donor class.

  • The most recent avail­able compar­ison of New York City donors in Assembly elec­tions (without public match­ing funds, in 2010) versus in City Coun­cil elec­tions (with public match­ing funds, in 2009) shows City Coun­cil donors came from neigh­bor­hoods more repres­ent­at­ive of NYC as a whole – with lower incomes, greater poverty, more people of color – than did Assembly donors.[10]
  • In the 2018 New York State elec­tions small donors lived in neigh­bor­hoods that, on aver­age, better reflec­ted the socioeco­nomic and racial diversity of the state as a whole than the neigh­bor­hoods where large donors lived.[11]
  • Small donors to 2018 state campaigns hailed from every county in the state.[12]
 

[1] All data analyzed by the nonpar­tisan Bren­nan Center for Justice are derived from the Federal Elec­tion Commis­sion and the New York State Board of Elec­tions via data­sets produced by the Campaign Finance Insti­tute and National Insti­tute on Money in Polit­ics as of Janu­ary 1, 2019 except where other­wise noted.

[2] “Small donor” is defined as someone who gave $175 or less, and the $175 cutoff is the maximum contri­bu­tion eligible for match­ing funds in Governor Cuomo’s small donor public finan­cing bill. The total from the 100 highest contrib­ut­ors to candid­ates was $7,525,311; the total contri­bu­tions by small donors was $5,807,914. Identi­fy­ing details for small dona­tions are not always avail­able publicly; campaigns are not required to, though often volun­tar­ily do, disclose item­ized indi­vidual data for contri­bu­tions of $99 and below. It is possible to estim­ate the number of donors giving $99 or below by divid­ing “unitem­ized” contri­bu­tions with the aver­age dona­tion in this category that has been item­ized, which in the 2018 elec­tion cycle was $40. This meth­od­o­logy, which was adop­ted from a 2013 academic paper that stud­ied the impact of small donors in elec­tions, produced an estim­ate of 137,000 small donors to state candid­ates in 2018. See Michael J. Malbin, “Small Donors: Incent­ives, Econom­ies of Scale, and Effects,” The Forum 11, no. 3 (2013): 392, https://www.albany.edu/rock­e­feller/rock_images/faculty/malbin/articles/Malbin%20-%20Small%20Donors.pdf.

[3] In order to make an accur­ate compar­ison, this analysis of New York state and federal donors used the $200 federal cutoff for “small dona­tions.” Accord­ing to the Center for Respons­ive Polit­ics’ data­base, small dona­tions to 2018 federal candid­ates totaled $227,702,435; over­all contri­bu­tions to candid­ates totaled $1,226,777,831. Small contri­bu­tions to New York state candid­ates totaled $5,879,404; over­all contri­bu­tions totaled $117,616,310.

[4] See Michael J. Malbin, Peter W. Brusoe, and Brendan Glavin, “Small Donors, Big Demo­cracy: New York City’s Match­ing Funds as a Model for the Nation and States,” Elec­tion Law Journal 11, no. 1 (2012): 14,
http://www.cfinst.org/pdf/state/nyc-as-a-model_elj_as-published_march2012.pdf. See also Michael J. Malbin, “Sources of Funds in 2012 State Legis­lat­ive and Gubernat­orial Elec­tions,” Campaign Finance Insti­tute, Octo­ber 2014, http://www.cfinst.org/pdf/state/tables/States_12_table2.pdf; Michael J. Malbin, “Sources of Funds in 2014 State Legis­lat­ive and Gubernat­orial Elec­tions,” Campaign Finance Insti­tute, Octo­ber 2014, http://www.cfinst.org/pdf/state/tables/States_14_table2.pdf

[5] Indi­vidu­als, LLCs, and non-party groups who gave more than $10,000 each to state candid­ates contrib­uted $65,083,209 in sum. Over­all contri­bu­tions to state candid­ates were $127,830,100 in 2018.

[6] Total out-of-state contri­bu­tions to candid­ates were $16,557,965; total contri­bu­tions from in-state small donors were $5,019,615. Out-of-state contri­bu­tions of $1,000 and above totaled $14,776,191.

[7] Out of 679 big donors to state candid­ates, 283 lived in New York County, 89 lived in Nassau County and 70 lived in Westchester County. Accord­ing to the most recently avail­able census data, median house­hold income in Westchester, Nassau and New York Counties is $89,968, $105,744 and $79,781, respect­ively. The median house­hold income for New York state is $62,765.

[8] These results were reached by cross-refer­en­cing census tract-level data with donors’ resid­en­tial data and compar­ing key demo­graphic char­ac­ter­ist­ics of neigh­bor­hoods where small and large donors lived (median income and percent­age of non-white resid­ents, indi­vidu­als below the poverty line, unem­ployed resid­ents, and indi­vidu­als with a college educa­tion or higher) to state-level demo­graphic aver­ages.

[9] See Michael J. Malbin and Brendan Glavin, “Small-Donor Match­ing Funds for New York State Elec­tions: A Policy Analysis of the Poten­tial Impact and Cost,” Campaign Finance Insti­tute, Febru­ary 2019, http://www.cfinst.org/pdf/State/NY/Policy-Analysis_Public-Finan­cing-in-N…, for the follow­ing find­ings.

[10] See Elisa­beth Genn, Sundeep Iyer, Michael Malbin, and Brendan Glavin, “Donor Diversity Through Public Match­ing Funds,” Bren­nan Center for Justice, May 14, 2012, http://www.bren­nan­cen­ter.org/sites/default/files/legacy/public­a­tions/Donor­Di­versi­tyRe­port_WEB.PDF, for the follow­ing find­ings.

[11] These results were reached using the same meth­od­o­logy described in foot­note 8.

[12] Results from the meth­od­o­logy described in foot­note 8 indic­ated that small donors resided in each of New York’s 62 counties.