Small Donors vs. Large Donors: Examining Campaign Finance Reform Solutions
August 08, 2014
Author: Tara Kutzbach, C’15
In the controversial Citizen’s United decision of 2010, the Supreme Court ruled that it is unconstitutional for the government to restrict the independent political expenditures of corporations, upholding their right to spend unlimited funds in elections under First Amendment freedom of speech. This led to an explosion of what we now know as super PACs, organizations that can accept unrestricted donations from individuals or corporations for the purpose of advocating for a particular political candidate or campaign. More recently, in McCutcheon v.Federal Election Commission, the Supreme Court overturned the limits on the aggregate amount of money individuals may contribute to a candidate, party, or PAC over a two year period. Though limits on how much an individual can give to an individual politician’s campaign are still in place ($2,600 per candidate), theMcCutcheon case, along with Citizen’s United, marks a gradual erosion of laws limiting the influence of big money in our federal elections.
Many people and groups have spoken out about the harmful effects of this trend in campaign finance, arguing that ultra-wealthy donors and special interest groups can now have an enormous (and disproportionate) impact in our elections. Through the unrestricted spending of super PACs and politically-active nonprofit organizations, many of which are not even required to disclose the identity of their campaign donors and expenditures, we have seen an explosion of big money financing political campaign efforts. In the 2012 election cycle, large donors (donating more than $200) made up only 0.4% of the population, but this segment made up 63.5% of the money donated in total.1
In response, the issue of campaign finance has become a hot topic, sparking a variety of proposed reforms. Some have advocated for the full public financing of all federal elections. Many Democrats in Congress are in favor of the DISCLOSE Act, a bill which would require political groups to make publically available the list of their big donors, in order to allow citizens to know whose money is really behind each group’s agenda.
Additionally, many reformers have argued in favor of steps to increase the number of small donors to counter the influence of the wealthy. It is common dogma that big donors who contribute millions of dollars in favor of a certain campaign or candidate are generally very polarized. Thus, an increase in small donors could increase the influence of a more economically representative class of voters, assumed to be more moderate. However, some scholars have questioned this, citing evidence that small donors may actually be more polarized than large donors. For example, Adam Bonica from Stanford University describes the “partisan taunting” and “ideological appeals” common in fundraising campaigns targeted at small donors. He uses Alan Grayson and Michelle Bachmann as examples, noting that in 2010, small donors (those giving less than $200) gave $3.4 million to Grayson and $7.5 million to Bachmann, also noting that moderate congressional candidates were less successful in raising money from small donors. Additionally, many tea-party inspired Senate primary challengers in 2010, such as Christine O’Donnell and Marco Rubio, were able to run competitive campaigns because of small-donor fundraising success.2
However, according to Michael Malbin of the Campaign Finance Institute, in examples such as the ones used by Bonica, too much emphasis is being placed on the candidates attracting the money rather than the donors themselves. He states that what these races had in common was “not that the candidates were polarizing but that they were able to reach out to national fundraising bases.”3 In fact, the most successful small donor fundraising campaign in history, the Obama campaign, appealed mainly to donors with mainstream party positions, and there is no evidence to show that these smaller donors differed greatly in their level of polarization from the large donors.
The debate over small donor vs. large donor polarization is likely to continue as more research is done on the issue. However, even if small donors are shown to be more polarizing, I think that taking steps to increase the number of small donors can still have a positive impact. The importance of small donors is not that they will necessarily depolarize our political parties, but that they will limit the immense influence of the wealthy and their monetary hold over political candidates. With less of the pie coming from big donors, candidates can decouple themselves from special interest groups and focus more on the interests of their constituents. Therefore, efforts like the proposal from Congressman John Sarbanes of Maryland, in which a special fund is created to match the small-dollar contributions of candidates who forgo big money from special interests, are important first steps to creating reform.4 We have a long way to go to solve the myriad issues our country now faces in regards to campaign finance, but getting more average citizens involved in politics is a good place to start.
1 “Donor Demographics.” Center for Responsive Politics . N.p., n.d. Web. 3 July 2014. <http://www.opensecrets.org/bigpicture/donordemographics.php?cycle=2012http://www.opensecrets.org/bigpicture/donordemographics.php?cycle=2012>.
2 Bonica, Adam. “Leadership, Free to Lead.” Boston Review . N.p., 22 July 2011. Web. 3 July 2014. <https://www.bostonreview.net/bonica-small-donors-polarization>.
3 Malbin, Michael. “Small Donors: Incentives, Economies of Scale, and Effects.” Campaign Finance Institute . N.p., n.d. Web. 3 July 2014. <http://www.cfinst.org/pdf/papers/06_Malbin_Small-Donors.pdf>.
4 “The Government by the People Act.” Congressman John Sarbanes. N.p., n.d. Web. 3 July 2014. <https://sarbanes.house.gov/free_details.asp?id=123>.
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