With the presidential primary underway, the topic of campaign finance is again dominating the political conversation. The Social Science Research Council’s Media & Democracy program brought together three scholars to discuss the state of campaign finance on presidential elections, how fundraising is affected by new technologies, and how these issues impact democracy. Ciara Torres-Spelliscy is the Leroy Highbaugh Sr. Research Chair and professor of law at Stetson University, Heath Brown is associate professor of public policy at John Jay College of Criminal Justice, and Mike Miller is program officer for the Media & Democracy program.
Mike: I’d like to begin by outlining the size and scope of the campaign finance field, if you will. How much money is likely to be spent on campaigns in 2020? How do these numbers compare to campaigns in the recent past or historically? I would imagine the trajectory is on the incline, but is it a sharp incline or has the rate of increase been relatively steady?
Ciara: The spending in federal elections has been on a steady incline, increasing. The elections of 2012 and 2016 were the most expensive in history. And then 2018 was the most expensive midterm in history.
Mike: And, are there projections for how much money will be spent in 2020?
Ciara: No one can know for sure. But there will be billions spent in 2020. Here’s the data from 2018 from the good folks at Open Secrets.
Mike: Do we have any sense for what a reasonable goal for a candidate in a primary or a general election is? Or, is there a threshold below which we can say that a candidate simply won’t be able to compete?
Ciara: Well, in 2016, Trump spent around a third of a billion, which was low for a presidential candidate. He could do that in part because he got billions of free coverage from TV and cable networks.
Heath: Gary Johnson’s committee raised $11.9 million in 2016; maybe that’s the lower-bound threshold. Jill Stein and Evan McMullin raised less than that, and all were viable just to run, not to actually compete.
Mike: Right, that’s a really good distinction: running vs. competing.
Heath: It seems hard to imagine a competitive Democrat in 2020 will raise less than $750 million when it is all finished; that’s far above what Hillary Clinton raised in 2016.
Ciara: The $750 million is basically what Obama raised in both of his runs for president.
Heath: He was especially good at this.
Ciara: According to Ira Rubinstein, “barackobama.com saw an unprecedented level of online activity, with reports indicating that 3 million donors made a total of 6.5 million online donations (adding up to more than $500 million).”
Heath: Alas, those were more innocent times in this country.
Mike: So another good distinction is whether a candidate is running on a major party ticket, which leads to another background question before we segue to online and small donations: Are there now (or have there been, historically) stark differences in the partisan make-up of contributions? Does one party have a distinct fundraising advantage?
Ciara: Super PACs have skewed to the right in terms of the sources of their biggest donors. And interestingly, nearly all publicly traded corporations that give to Super PACs, give to Republican Super PACs.
Heath: It is not clear that there are partisan differences in the ability to raise money. In 2018, for example, each party raised between $950 million and 1 billion.
Mike: Recent reporting suggests that Democrats may have an advantage in raising money from “small donors.” Before we get to the impact and the distribution of small donations, can either of you tell me what constitutes a “small” donation? Is there a legal distinction or a consensus among journalists?
Heath: My impression is that this is typically treated as donations under $200 by scholars and journalists.
Ciara: One distinction you could make is between reportable donations of $200 or more and then everything below that threshold is “small.” But academics can disagree about just about anything including what counts as small.
Mike: I can’t disagree with that.
Mike: Ciara, what are the individual limits on campaign contributions?
Ciara: The current limits for individuals is $2,800 per candidate, per election. So $2,800 for the primary and an additional $2,800 for the general.
Heath: That $5,600 is the same as the average closing costs for the purchase of a home.
Mike: So everyone must be doing it!
Mike: OK, big picture: Do we have a sense of what proportion of campaign donations are likely to be from “small” vs. “large” donors? Is it realistic to think that in 2020 small donations will compete with or outspend PACs and other large donors?
Ciara: Again, that’s impossible to know. If you have Super PACs spending, the Super PACs can gather in unlimited contributions—literally millions at a time. It takes a lot of $200 or fewer donations to make up for one multimillion-dollar Super PAC donation.
Heath: I don’t know if it is 2020 or some other election, but the key here seems to be the difference between potential small donors’ interest in donating and their actual practice of doing it.
Ciara: On the other hand, if you have one million passionate followers who are all willing to give $27, then suddenly a candidate will have $27 million in the kitty.
Mike: Hmm…I recognize that number from somewhere. Here at the SSRC’s Media & Democracy program, we spend a lot of time thinking about how innovations in media technology affect democratic practices and institutions. So one question is whether the ability of individual citizens to donate to a campaign in the amount of $5, $10, or, oh I don’t know, $27, has been facilitated by new media technology (e.g., smart phones) or new media applications (e.g., ActBlue). In other words, is the increased importance of small donations something that we might still have seen in the absence of new media technology or is this really a tech driven phenomenon?
Ciara: This is how Sanders got so much money so quickly after announcing his 2020 run.
Heath: I think this isn’t just the future of campaign finance, this is the holy grail of political media as well, and likely the financing of journalism more broadly than that. The technology behind micropayments and recurring payments to candidates have in common the uncertain trust/faith the public has in the technology/platform. This seems to be as true for the viability of candidates who want to rely on small-dollar donations as it is for local newspapers.
Mike: Do you mean that voters who are donating via micropayment apps are wary that their data are being shared in unsavory ways? Or something else?
Heath: I suspect the list of concerns are numerous, and most not even that explicit. If you look at the trust in technology companies, the public is mixed at best. So a candidate who comes along, likely in 2020, with an app to swipe micropayment donations will rise and fall with the level of trust in their campaign as well as the underlying platform security.
Ciara: True. As I explore in my second book, Political Brands, Facebook still has egg on its face from the data breach around Cambridge Analytica purloining private information from users to be fed into political campaigns.
Mike: I think these are great points, and they make me wonder whether this spike in small donor contributions is just that (a blip) or whether funding models will recalibrate. Which brings me to Mr. Beto O’Rourke, who has just announced his candidacy for president! The three-term Texas representative raised a record (for a Senate race) $80 million dollars in 2018, about half of which came from small donors, and about $60 million via ActBlue, the online fundraising tool that helps “crowdsource” small donations. An argument could be made that he is riding a wave of celebrity earned in part by his online small-donor fundraising prowess. Do either of you think this represents a new model of entry into national politics? Or is this, again, just a blip and we aren’t likely to see it again in 2022?
Heath: O’Rourke is certainly riding a wave of something, but the wave metaphor is an apt one: other candidates will surely catch the next big one, either by mimicking his fundraising strategy or by innovating in some other way. I think it is too pat to associate his small-donor prowess in a highly unusual Texas Senate race to a more generalizable prowess in a presidential race.
Ciara: And, as Obama learned in 2008 and 2012, the beauty of a small donor is, as a matter of campaign finance law, they are not maxed out. The candidate can ask for more money from the small donor again and again as the election goes on.
Mike: And boy did they.
Heath: Campaign history shows that a technology advantage only lasts a cycle or so, and the other party catches up See Dan Kreiss’s great work on this.
Mike: And Ben Epstein also has great work on these “political communication cycles,” from a broader historical perspective.
Sticking with Beto for a moment: of the $80 million he raised, his campaign spent all but $500 thousand and lost the race by three points. So a question arises: Are individual donors, many of whom are sending money across state lines, more likely to donate in inefficient ways? Should we be thinking about wasted donations? Are there groups out there thinking about ways to get online/small donors to donate more efficiently (e.g., to down ballot races)?
Heath: Underlying this question is what motivates donors to give and how malleable the giving patterns are. If you think about Eitan Hersh’s idea of political hobbyism, you have to ask what portion of donors are hobbyists—participating as a form of leisure activity—and which portion of donors are driven by civic duty.
Ciara: You cannot know beforehand how close an election will be, whether it is Beto in 2018 or Trump in 2016, so I think donors have to think about what type of candidates they want to see in what offices, and give accordingly. Clearly if you have a lot of money to spend in politics you can be more Machiavellian and try to give in the swing district of a swing state to tip a legislature for example.
Heath: If donors are drawn to politics for the horse race and celebrity candidate, then it seems hard to imagine they are going to want to split their donations with unknown candidates in down-ballot races.
So, it seems to me, one question is from the perspective of the democracy, what role do campaign donations play alongside other forms of participation like voting, speaking out, protesting, running for office?
And a second question: What would we expect to change politically if a new technology facilitated more small donors and candidates to fund campaigns with a larger portion of funding from small donors?
Ciara: According to Chief Justice John Roberts, giving money and voting are moral equivalents. See McCutcheon v. FEC.
Heath: I’d be curious what Justice Roberts views as the going exchange rate.
Ciara: To Heath’s second question, one advantage that online small donations (the Netflix model) could have is freeing more members of Congress from call time, dialing for dollars.
Mike: These are really great questions, and I want to wrap with one that engages Roberts’s view of spending as speech. So here’s the $64,000 question: What does any of this mean for (small “d”) democratic politics going forward? And, let me frame the question in this way: Over the past two years, I have personally donated to campaigns in states where I do not live and would need to fly to in order to volunteer on the ground. What does that mean for politics, especially in a federal constitution such as ours? Is there any organized push back against this kind of intranational, transborder “interference” and, if so, from whom?
Ciara: Courts have basically struck down most laws that try to place geographical limits on political spenders. So one oddity that this creates is voters are land locked, but money flows across borders. One consequence of free-flowing money is a candidate who has little local support can get a media boost from out-of-state spenders. That may artificially inflate the candidate’s name recognition. But if the local candidate doesn’t do the leg work to build up a base, then they may lose the election anyway. Especially in low-information elections, like judicial elections, out-of-state money can make a difference. Think of the Chamber of Commerce’s spending or the Koch Brothers.
Heath: I guess I’m pessimistic that this will greatly change the small “d” democratic politics of Congress. I think Ciara is right that reducing member time on fundraising calls is, all things equal, a good thing. It frees them to legislate on behalf of their constituents and provide oversight of the executive branch. However, freeing a member of this time doesn’t change the fact that most operate with increasingly small staffs with less policy experience than in the past. These staffers’ relative pay is declining, making it more and more attractive to leave the Hill for lobbying jobs. The weakening capacity of Congress seems to me a problem that cleaning up the campaign finance system won’t address in a meaningful way.
Mike: Ciara and Heath, this has been amazing! I’ve learned a lot! Thank you!