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Small Donors: Incentives, Economies of Scale, and Effects

Michael J. Malbin

Michael J. Malbin is Professor of Political Science, University at Albany (Suny). He is also co-founder and Executive Director of The Campaign Finance Institute, a non-partisan think tank in Washington, D.C., that studies political finance in federal and state elections.

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From the journal The Forum

Abstract

This article examines what scholars know and need to know to assess the role and impact of small donors, engaging with participation theory to gauge the potential effects of technology and of public financing on the economics of mobilizing donors. As a prelude, the article reviews the evidence showing that small donors are more representative economically than those whose large contributions now dominate political finance. Second, it considers and rejects claims that they are more likely to polarize politics. Third, it reviews the role of bundling organizations, in light of the economics of contemporary communications technology. Fourth, it reviews the impact of those forms of public financing that are specifically aimed at changing the incentives for candidates to reach out to small donors, by way of tax credits and public matching funds. Finally, as a speculative conclusion, it raises important questions about which current research so far has little to say: whether activating small donors stimulates their giving of time as well as money and, if so, whether the political skills thus learned have a noticeable effect on citizen engagement over the long haul.


Corresponding author: Michael J. Malbin, The Campaign Finance Institute and University at Albany, SUNY, e-mail:

About the author

Michael J. Malbin

Michael J. Malbin is Professor of Political Science, University at Albany (Suny). He is also co-founder and Executive Director of The Campaign Finance Institute, a non-partisan think tank in Washington, D.C., that studies political finance in federal and state elections.

Thanks to Donald P. Green and Kay Lehman Schlozman for their comments on an earlier draft of this manuscript.

  1. 1

    To slice the point even more finely, Lee Drutman of the Sunlight Foundation found that more than a quarter (28%) of the disclosed ($200+) money in federal elections came from only 31,385 individuals – what Sunlight refers to as the one percent of the 1% (0.01%) (Drutman 2013).

  2. 2

    These are actual donor counts for 1996 and 2000 and estimates for the later years. Through 2000, the public can learn the identities of all donors to presidential campaigns because the needed information about small donors (which would otherwise not be made public) was included in the candidates’ submissions for public matching funds. George W. Bush opted out of matching funds in 2000 but disclosed the names of all donors voluntarily. In 2004, Howard Dean and John Kerry also opted out of matching funds, as did other candidates in 2008 and 2012. Since none of these made the details about their small donors available publicly, one can only estimate their small donors by dividing the “unitemized” contributions with a reasonable estimate of what the average small donor gave. Based on past elections and surveys, this essay is assuming an average of $60 per undisclosed donor.

  3. 3

    Rep. John Sarbanes, D-MD; “Grassroots Democracy Act,” HR 268, 113th Congress. The other major small-donor bills under consideration during the 113th Congress as of this writing are the “Fair Elections Now Act” (HR 269) sponsored by Rep. John Yarmuth (D-KY) and the “Empowering Citizens Act” (HR 270) co-sponsored by Reps. David Price (D-NC) and Chris Van Hollen (D-MD). Of the three, the Price-Van Hollen bill most closely resembles New York City’s multiple matching fund system in its approach. It is also the one bill to include presidential as well as congressional elections.

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Published Online: 2013-10-18
Published in Print: 2013-10-01

©2013 by Walter de Gruyter Berlin Boston

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