Outlook

Small dollars, big changes

Web-based donations aimed to democratize our campaigns. They also radicalized both parties.

Bill O'Leary/The Washington Post
By

As the Democratic primary contest moves from the chaos of the Iowa caucuses to New Hampshire, one truth about the 2020 presidential race remains clear: Small donors are ascendant. Sen. Bernie Sanders (I-Vt.), who leads in Granite State polls, announced Thursday that he’d raised $25 million in January from more than 648,000 people. In this election cycle, the top five Democratic candidates have raised about $171 million from small donors, led by Sanders and Sen. Elizabeth Warren (D-Mass.), each of whom procured more than 60 percent of their funds from that source. Small donations — those under $200 — are now the single largest source of funding in the presidential campaign, the culmination of a trend that has reshaped American politics at all levels.

Richard H. Pildes is the Sudler family professor of constitutional law at New York University School of Law.

The Internet has made it almost frictionless for candidates to solicit small contributions — and they’re rolling in. President Trump, without a major primary challenger, has still raised $44 million (55 percent of his contributions) from small donors. What’s more, the Democratic Party amplified the importance of such donations by making the number of small donors a candidate attracted one of two criteria — standing in the polls was the other — for determining who could participate in its debates.

In recent years, commentators have hailed the emerging power of small donors in romantic and grandiose terms. Harvard’s Larry Lessig has proclaimed small-donor funding nothing less than a way to “reclaim” our republic; in the American Prospect, Mark Schmitt celebrated “the revolutionary potential of small-donor democracy”; and the nonprofit Every Voice asserts that small donations “put everyday Americans back at the center of our government.”

Previously, many reformers concerned about the role of big money in politics pressed for publicly financed elections, the mechanism by which many other countries — as well as states including Arizona, Connecticut and Maine — fund their elections. In these “clean election” systems, candidates receive public funds in return for agreeing to limit their spending and private fundraising. But instead of seeking to extend such programs to congressional races (and reviving the all-but-defunct one for presidential candidates), reformers are now trumpeting small-donor “matching programs.” The first bill introduced in the post-2018 Democratic House would provide $6 in public funds to candidates for every $1 they raise from small donors (up to a certain amount, determined by a complex formula). “The transformative power of a small donor matching program would be profound,” the Brennan Center for Justice has declared.

But there has been too little public debate about the effects of dramatically increasing the impact of small donations. In particular, empirical studies suggest that online fundraising is prone to the same polarizing dynamics and viral spirals we see in online political discourse generally. The candidates who thrive on small-donor financing are those who generate the most social media attention, often because they come from the ideological poles of the parties. Small-donor matching programs are thus not politically neutral: They disfavor moderates and empower the ideological extremes. Before reformers race to abandon more traditional forms of public financing, we need to weigh carefully these polarizing effects against the “democratizing” aspect of small donations.

The small-donor phenomenon is quite recent. In presidential elections, Howard Dean’s 2004 insurgent campaign first seized upon the Internet’s fundraising potential. Barack Obama then convincingly drove home the emerging power of small donors in 2008, raising 24 percent of his funds from them (a figure he enhanced in 2012, with 28 percent). Indeed, Obama’s success with online fundraising motivated him to become the first major-party nominee to reject public financing, an option available for presidential elections since the early 1970s; that move freed him to spend more money than the public program would have permitted. Once Obama did that, all subsequent nominees did, too, effectively destroying what had already devolved into an anemically funded program. Far and away the most successful small-donor presidential candidate so far, however, was Donald Trump in 2016: He raised 69 percent of his individual contributions from small donors (three times as much as Hillary Clinton), for a total of $239 million.


Rep. Alexandria Ocasio-Cortez (D-N.Y.) speaks during a December campaign rally for Sen. Bernie Sanders (I-Vt.) in Los Angeles. Both have benefited from the small-donor revolution in campaign financing. (Philip Cheung for The Washington Post)

Small donors have played a significant role in House and Senate races for even less time. Congressional candidates nearly doubled their share of funds from small donors from 2016 to 2018 — to 12 percent for House contenders and 22 percent for Senate candidates. In the 2018 midterms, Democrats won the small-donor race (thanks in part to the online platform ActBlue, through which donors can contribute to all candidates), but Republicans are racing to catch up (they now have the similar WinRed).

The problem with romanticizing small-donor matching policies is that they bump up against the fundamental logic of American political participation: Those who take part most actively tend to be more ideologically extreme than those who participate less. It is not “everyday Americans” and “ordinary citizens” on whose choices public small-donor matching programs would turn; it is that subset who are so engaged with politics that they undertake more intensive action.

Academic studies show that individual donors cluster at the “very liberal” or “very conservative” poles of the ideological spectrum, with few in the middle. The distribution of non-donors is more even across the spectrum: Forty five percent of non-donors describe themselves as moderates, compared with 16 percent of donors. Unlike many business groups, which traditionally have contributed across the political spectrum to buy access, most individual donors give for ideological reasons. And small donors are at least as ideologically extreme as other individual donors — perhaps more so.


Supporters of then-candidate Barack Obama await his arrival at the annual Jefferson-Jackson Dinner in Richmond in February 2008. Obama showed that a presidential campaign could be powered by small donations. (Melina Mara/The Washington Post)

Research also shows that more ideologically extreme legislators raise a greater proportion of their money from individual donors than other candidates. Indeed, while close races typically attract more funds, one recent study of House elections from 2006 to 2010 found that the effect of an incumbent’s extremism on small-donor support was three times as great as the tightness of the race. These findings should not be surprising: They echo the history of pre-Internet, direct-mail fundraising appeals to small donors, when more extreme language unleashed the most money and more ideologically extreme candidates did the best. And money from outside a district is likely to be even more polarized than local funds; nonetheless, the bill passed last year in the House would provide its 6 to 1 match no matter where the money comes from. (The House bill isn’t even really confined to small donors: One person could spread $5,000 over 25 candidates, for example, and have that matched with $30,000 in public money, so long as they gave no more than $200 to any one candidate.)

Two of the earliest winners in the small-donor game were Reps. Allen West (R-Fla.) and Michele Bachmann (R-Minn.), among the more inflammatory — and hence most visible — Republicans in recent memory. (Bachmann once called for a “penetrating exposé” on whether members of Congress were “pro-America or anti-America,” while West observed that “if Joseph Goebbels was around, he’d be very proud of the Democrat Party.”) In the 2010 House elections, Bachmann raised more from small donors than all 48 moderate “Blue Dog” Democratic incumbents combined. In 2018’s House races, the winning candidates who raised the highest percentage of their funds from small donors included Rep. Devin Nunes (R-Calif.), who regularly defended President Trump on cable, raising his profile; Rep. Steve Scalise (R-La.), who received massive media coverage after he was shot at a congressional baseball team practice; and Alexandria Ocasio-Cortez of New York, who challenged a Democratic incumbent and is now a leader of the House Democrats’ progressive wing.

In the current presidential race, the seven Democrats who raised the greatest share of their money from small donors through the third quarter of 2019 were, in order: Sanders, entrepreneur Andrew Yang, former housing secretary Julián Castro, Warren, Rep. Tulsi Gabbard (Hawaii), the self-help author Marianne Williamson and former congressman Beto O’Rourke (Tex.). The list skews toward the progressive wing of the party and toward people whose national followings defy conventional categorization, and noticeably excludes the numerous moderate senators and governors who threw their hats into the ring. It hints at the kinds of candidates who would be rewarded by a small-donation matching program. One of the moderate candidates who failed to catch on, Sen. Michael F. Bennet (Colo.), accurately observed of online fundraising: “The more extreme you are, the more rewarded you are.”

To be sure, the Internet makes it easier for candidates and small donors to find each other, enabling broader participation and producing a somewhat more egalitarian finance system than one driven solely by bigger donors. But traditional public financing achieves most of these benefits without the downsides. Such financing faces its own challenges — particularly, ensuring that the size of public grants keeps up with the costs of campaigns (which is where the funding program for presidential elections failed miserably). But before abandoning that alternative too quickly, it is worth keeping in mind that traditional public financing dollars are politically agnostic: They do not reward virality or depend on a candidate’s most engaged supporters.

To call attention to the political dynamics of matching small donations is not to take a stance on whether voters should embrace the center or the wings of their parties. But small-donor-based campaign finance policies implicitly do take a position on that issue — whether their proponents recognize it or not.

Credits: Richard Pildes

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