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Establish Small Donor Public Financing

The Brennan Center’s Democracy Agenda outlines a series of concrete proposals that the next President and Congress should embrace to improve democracy in America.

Published: February 4, 2016

Read our 2018 Demo­cracy report here.

Millions of small donors now parti­cip­ate in campaigns online, giving citizens of modest means the abil­ity to wield tremend­ous power over elec­tions and govern­ment. Yet the same is true of wealthy contrib­ut­ors, and they have much more money to spend. In the “race” between the small donors empowered by the Inter­net and the big money empowered by the U.S. Supreme Court, the big donors are winning, partic­u­larly at the congres­sional level. As the amount raised from a relat­ive hand­ful of wealthy donors has risen dramat­ic­ally in recent elec­tion cycles, the amount winning congres­sional candid­ates receive from small donors has shrunk.[1]

Mean­while, the pres­id­en­tial public finan­cing system, designed to decrease candid­ates’ reli­ance on big money donors, has disin­teg­rated. From 1976 through 2004, most qual­i­fy­ing candid­ates parti­cip­ated, mean­ing they had to collect a certain amount in funds from small donors and had to limit their spend­ing.[2] But in 2008, Pres­id­ent Obama made history by declin­ing to take public funds, and by 2012 no major party candid­ate joined the system.[3] By now, the program provides such a low amount of money that there is little hope of its revival without signi­fic­ant improve­ments.

Federal public finan­cing should be improved and renewed as a way of coun­ter­ing the tremend­ous inequal­ity of influ­ence. The most effect­ive public finan­cing systems match small contri­bu­tions with public funds, thereby lessen­ing candid­ates’ reli­ance on big money donors, while also expand­ing and diver­si­fy­ing the donor pool.

Proposal

Congress should enact a federal public finan­cing system that encour­ages small contri­bu­tions. This approach should be used to revital­ize the dormant pres­id­en­tial public finan­cing system. And it could be exten­ded to Congress as well.

The Bren­nan Center supports the Empower­ing Citizens Act, intro­duced by Reps. David Price (D-N.C.) and Chris Van Hollen (D-Md.), which would amplify the voices of small donors by match­ing contri­bu­tions up to $250 with public funds at a 6–1 ratio.[4] The meas­ure encour­ages congres­sional and pres­id­en­tial candid­ates to run grass­roots-oriented campaigns by cutting contri­bu­tion limits in half for those who accept public fund­ing. The bill also combats loop­holes created by Citizens United by making it harder for super PACs and polit­ical non-profits to func­tion as arms of candid­ates’ campaigns.

The system is modeled on New York City’s success­ful match­ing system, which provides qual­i­fied candid­ates with $6 for each $1 contrib­uted of $175 or less. Parti­cip­a­tion in the city’s system is high. Candid­ates now “reach out to their own constitu­ents rather than focus­ing all their atten­tion on wealthy out-of-district donors.”[5] The program has also encour­aged greater donor diversity: Contrib­ut­ors to city candid­ates are much more racially and econom­ic­ally diverse than donors to candid­ates for New York’s state legis­lature, which does not have a small donor match­ing system.[6]

Match­ing small dona­tions at the federal level could allow a wider spec­trum of candid­ates to run compet­it­ive campaigns with contri­bu­tions from aver­age citizens.

There are other valu­able meth­ods of public finan­cing that can let candid­ates run without rely­ing on big money. Recently there has been a strong push for a voucher system, in which every citizen (or voter) would be given a small voucher to give to a chosen candid­ate. Last fall, Seattle became the first city to adopt such a program. Start­ing in the next elec­tion, the city will provide every voter with four $25 vouch­ers to give to city candid­ates.[7] Other states and cities, such as Minnesota[8] and Virginia, have given citizens rebates or tax cred­its if they make a small contri­bu­tion to a candid­ate or party. And there is another set of states and cities that give qual­i­fied candid­ates block grants.   

Several types of public finan­cing can be combined to provide incent­ives for candid­ates and donors to parti­cip­ate. For example, the Govern­ment by the People Act, by Rep. John Sarbanes (D-Md.), would create a voucher pilot program, provide a tax credit for small contri­bu­tions, and insti­tute a match­ing system.[9]

Why This Can Be Achieved

Unlike some other common-sense reforms, small donor match­ing systems are permiss­ible under Citizens United and other Supreme Court decisions. Those cases prin­cip­ally inval­id­ated limits on expendit­ures (by indi­vidu­als and corpor­a­tions), and gener­ally do not prevent the govern­ment from offer­ing candid­ates incent­ives to rely on small donors or limit spend­ing. In fact, by 9–0, the Court recently declined to reverse the long­stand­ing consti­tu­tion­al­ity of these volun­tary systems.[10] Public finan­cing laws cannot prevent expendit­ures by super PACs, but they can ensure that candid­ates who face high-spend­ing oppon­ents or outside groups can fight back without rely­ing on big checks from a small group of wealthy funders.  

Public finan­cing is the best and most prom­ising method for giving the Amer­ican people more power over their govern­ment. A major­ity of Amer­ic­ans also favor using small donor match­ing in elec­tions.[11] With many success stor­ies in federal, state, and local elec­tions, and several new and creat­ive systems proposed, candid­ates can access a wealth of data and exper­i­ence when assess­ing how to encour­age parti­cip­a­tion by small donors and discour­age elec­tions that are domin­ated by wealthy indi­vidu­als and corpor­a­tions.

Resources

  • Empower­ing Small Donors in Federal Elec­tions: Proposal show­ing how small donor match­ing funds, used success­fully in New York City, could work in congres­sional elec­tions.
     
  • Donor Diversity Through Public Match­ing Funds: Analyzes how small donor match­ing programs can boost public parti­cip­a­tion, change the way candid­ates campaign and raise money, and engage a much broader array of citizens in the polit­ical process.
     
  • Small Donor Match­ing Funds: The NYC Elec­tion Exper­i­ence: Exam­ines the ways that New York City’s small donor match­ing system changed the dynam­ics of money in polit­ics in the City.
     
  • New York City Small Donor Match­ing Program: A volun­tary public finan­cing program that matches contri­bu­tions up to $175 at a 6–1 ratio.
     
  • Seattle Voucher System: The city recently passed a ballot initi­at­ive that will provide every voter with four $25 vouch­ers they can use to donate to some local campaigns.
     
  • Govern­ment by the People Act: A bill sponsored by Rep. Paul Sarbanes (D-Md.) that would provide citizens with a $25 tax credit for campaign contri­bu­tions, amplify small dona­tions with a six-to-one match, and allow candid­ates to earn addi­tional public match­ing funds within 60 days of the elec­tion.
     
  • EMPOWER Act: A bill sponsored by Reps. David Price (D-N.C.) and Chris Van Hollen (D-Md.) that would increase public match­ing funds, provide six-to-one match­ing for dona­tions under $250, elim­in­ate spend­ing limits on parti­cip­at­ing candid­ates, and require publicly-funded candid­ates to accept contri­bu­tions of no more than $1,000.
 

[1] Public Campaign, Small Donor Solu­tions for Big Money: The 2014 Elec­tions and Beyond (2015), http://every­voice.org/wp-content/‌uploads/‌2015/‌04/‌2014S­mall­Donor­Re­portJan13.pdf.

[2] Pres­id­en­tial Elec­tion Campaign Fund, Federal Elec­tion Commis­sion, http://www.fec.gov/press/bkgnd/fund.shtml (last updated Apr. 9, 2014).

[3] Shail­agh Murray & Perry Bacon Jr., Obama to Reject Public Funds for Elec­tion, Wash. Post, June 20, 2008, http://www.wash­ing­ton­post.com/wp-dyn/content/article/2008/06/19/AR2008061900914.html.

[4] Empower­ing Citizens Act, H.R. 424, 114th Cong. (2015).

[5] Sundeep Iyer et al., Bren­nan Ctr. for Justice, Donor Diversity Through Public Match­ing Funds 13 (2012), avail­able at http://www.bren­nan­cen­ter.org/sites/default/files/legacy/public­a­tions/Donor­Di­versi­tyRe­port_WEB.PDF.

[6] Sundeep Iyer et al., Bren­nan Ctr. for Justice, Donor Diversity Through Public Match­ing Funds (2012), avail­able at http://www.bren­nan­cen­ter.org/sites/default/files/legacy/public­a­tions/Donor­Di­versi­tyRe­port_WEB.PDF, Adam Lioz, Demos, Stacked Deck: How the Racial Bias in Our Big Money Polit­ical System Under­mines Our Demo­cracy and Our Economy (2014), avail­able at http://www.demos.org/sites/default/files/public­a­tions/Stacked­Deck2_1.pdf.

[7] Russell Berman, Seattle’s Exper­i­ment With Campaign Fund­ing, The Atlantic, Nov. 10, 2015, http://www.theat­lantic.com/polit­ics/archive/2015/11/seattle-exper­i­ments-with-campaign-fund­ing/415026/.

[8] While Minnesota’s program has been seen as success­ful, the program has been suspen­ded through at least 2017. Polit­ical Contri­bu­tion Refund program suspen­ded, Minnesota Revenue, http://www.revenue.state.mn.us/indi­vidu­als/indi­vid_income/Pages/whats-new-PCR.aspx (last visited Jan. 14, 2016).

[9] Eliza Newlin Carney, Sarbanes Bill Aims to Draw in Small Donors, Roll Call, Feb. 4, 2014, http://blogs.rollcall.com/belt­way-insiders/sarbanes-bill-aims-to-draw-small-donors/.

[10] Ariz. Free Enter. Club’s Free­dom Club PAC v. Bennett, 131 S. Ct. 2806, 2827 (2011).

[11] One recent survey by Public Policy Polling found that 62 percent of respond­ents would support a small donor match­ing system. National Survey Results, Public Policy Polling, Sept. 22–23, 2015, https://mayday.us/data/20150925_gop_polling_results.pdf. A 2014 Every Voice poll showed that 70% of respond­ents favored a proposal to match small donor contri­bu­tions through public finan­cing. Adam Smith, New Poll: Voters Think Congress Does­n’t Listen to Them, Support Campaign Reforms, Every Voice, Nov. 10, 2014, http://every­voice.org/press-release/novem­ber­2014­poll