Policy Components of a Small Donor Campaign Finance System via U.S. PIRG
Democracy works best when our representatives are focused on their constituents, rather than dialing for dollars from large donors or courting the favor of special interests. In the District of Columbia, candidates for office too often must depend on wealthy donors who can give far more than the average D.C. resident can afford.
The undemocratic role of big money is especially exclusionary for people of color, who are severely underrepresented in the “donor class.” We know that in the current campaign finance system, wealthy donors making large campaign contributions can drown out the voices of everyday D.C. residents. There are solutions available that advance racial equality in our democracy and promote government of, by, and for the people.
Campaign finance programs that empower small donors would fight the influence of big money, empower everyday D.C. residents, make sure every voter’s voice matters in our elections and promote racial justice. Small donor empowerment programs provide public matching funds to campaigns for small contributions, allowing candidates that focus on seeking the broad support of the public to compete with candidates who rely on a narrow set of large donors. In exchange for receiving matching funds, candidates must forgo large contributions, and turn down money from special interests.
The track record of small donor systems is impressive. In New York City, where small contributions are matched at a six-to-one ratio, small donors of all means have played an increasingly meaningful role in funding campaigns. For example, in the 2013 city council race, participating City Council candidates got 61% of their contributions from small donations and matching funds. That year, 92 percent of candidates running in the primary participated. Neighboring Montgomery County Maryland adopted a similar program in 2014 and small donor programs are being considered by localities across the country.
Below is a summary of the key policy components of a small donor system for D.C. that would cover the offices of Mayor, Council, and Attorney General. It is based on legislation introduced by D.C. councilmembers David Grosso and Kenyan McDuffie, model federal legislation, and similar policies from other localities.
Match small contributions with limited public matching funds to amplify the voices of small donors:
- Contributions from small donors to participating candidates each cycle are matched with public funds. To avoid subsidizing deep pocketed donors, only small-dollar contributions – $100 or less, for example – should be eligible for matching funds. To ensure that small donor candidates can compete, the match should be at least four-to-one.
- A tiered matching structure could be used to further empower small donors. For example, the first $20 of a small contribution eligible for matching funds could be matched at a higher ratio.
- The total amount of matching funds a candidate can receive is capped based on the average cost of recent winning campaigns in the District of Columbia. A cap must reign in the cost of the program while ensuring participating candidates can be competitive. If a candidate hits the cap, he or she can continue raising unmatched small contributions without being subject to a spending limit to stay competitive with non-participating big money candidates.
Candidates that choose to participate in the program must forgo large contributions and all special interest contributions:
- A small-donor candidate must not accept any donations (in-kind or cash) from anyone other than an individual; this includes corporations, PACs, or political parties. The one exception is that “People PACs” that only accept contributions of $100 or less may contribute to small donor candidates.
- The contribution limit must be low enough to ensure that D.C. residents of all means can have a voice. Small-donor candidates must not accept contributions larger than $100, for example, aggregated for an individual across the full election cycle.
- Contributions from individuals living outside the District of Columbia are not eligible for matching funds.
Candidates must demonstrate a robust level of public support to qualify for matching funds:
- Candidates must prove their viability by hitting a threshold number, and dollar amount of small contributions under $100. The threshold will vary depending on which office the candidate is seeking.
- Qualifying contributions can only come from district residents. For council candidates running to represent a ward, all qualifying contributions should come from within the ward to demonstrate broad support from the constituents they seek to represent.
- Upon qualifying for the program, candidates will receive an initial base grant in order to jumpstart their campaign in addition matching funds for small contributions they secure.
A small donor matching program requires effective oversight and a stable source of funding:
- Strong, independent oversight and administration is critical to a well-functioning matching program.
- To ensure the continued viability of small donor candidacies, the system should be funded consistently and sufficiently to encourage widespread participation. The funding source for the program should be dedicated and protected