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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.