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Small-donor Public Matching Fund Programs Could Dilute the Power of Big Donors


7/25/2011

Following recent court decisions, Joyce grantee The Campaign Finance Institute (CFI) released Public Financing of Elections after Citizens United and Arizona Free Republic. The Institute used data from recent elections in midwestern states to study low-donor matching funds without a spending limit. A public matching fund incentive for small donors, the report claims, "will improve participation and change the sources of candidate funding by altering the incentives for both candidates and donors."

In its latest report, CFI researchers reported that Minnesota is the only state in the country in which a majority of the money (57 percent in 2010) comes from small donors ($250 or less). By comparison, 34 percent of Wisconsin campaign contributions come from small donors. In the other midwestern states in the report, small donors account for 3-12 percent of total contributions. Minnesota also has below-average contribution limits and partial public financing used by most legislative candidates in both parties.

Researchers tested a number of policy scenarios that would replicate Minnesota’s funding levels in other midwestern states. They found that a low-donor matching fund system in which public funds matched the first $50 from every individual donor on a five-for-one basis was similar to Minnesota’s small-donor percentages. This scenario was patterned after a New York City law that offers a six-for-one match for the first $175. The New York City data has been presented by CFI in the past as a model that can be used with modifications for the rest of the US.

The findings reinforce the recommendations outlined in Reform in an Age of Networked Campaigns: How to Foster Citizen Participation through Small Donors and Volunteers – a report published jointly in 2010 by CFI, Brookings Institution and American Enterprise Institute.

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