How Citizen Funding Systems Empower Everyone

 (Blueprints for Democracy - Everyone Participates) (Blueprints for Democracy - Everyone Participates)

Over the coming weeks, we’ll be highlighting policies from the Blueprints for Democracy, a new collection of solutions policymakers can implement to give everyone a greater say in their democracy. Read the full series here.

Citizen funding programs, known elsewhere as public financing, offer a proven and effective means of empowering the general public to participate in the democratic process. Under the current status quo, large donors have their voices heard and their priorities frontloaded because these individuals are the ones who can afford to underwrite increasingly expensive campaigns.

In order to expand political participation and increase the relative influence of the small-dollar donor, the various forms of citizen funding programs provide funds to candidates who pledge to raise small contributions in their communities and limit the amount they accept from any individual donor.

Citizen funding better serves those involved in elections on both sides—candidates and voters. Those running for office can campaign, visibly unbeholden to special interests, all the while actually building a broad base of constituent support by going to community meetings and town halls, rather than spending so much time fundraising.

There are several types of citizen funding, each with different characteristics and benefits.

  • Clean Elections (Full Public Funding) – In Clean Elections systems, the government provides candidates who voluntarily opt-in with a grant to wholly fund their campaigns. Generally, candidates must qualify for the public funds by raising a certain number of small-dollar donations from their constituents. Earlier this month, voters in Maine strengthened their Clean Elections system through a ballot initiative.
  • Matching Public Funds – In some areas, public funds are used to match small dollar donations to campaigns, amplifying the impact of a single contribution. These systems may provide up to a six-to-one match of public funds to contributions, so long as the donations are less than a certain amount. Like full public funding, matching systems often require candidates to limit contribution amounts, raise significant small-dollar contributions and adhere to stricter disclosure requirements. New York City has had an effective matching funds system for citywide races since 1988.
  • Vouchers – In a voucher system, citizens receive small-dollar credits that can be donated to campaigns, which then redeem them for public funds. Vouchers empower marginalized communities to more easily participate in the political process by allowing all voters to contribute to the campaign or campaigns of their choosing. Seattle voters implemented a new voucher system for municipal elections on the recent November ballot.
  • Refunds – Some states and localities offer refunds to contributors that give small-dollar donations to campaigns. These programs incentivize donations, but do come with an inherent processing time. Minnesotans can receive the first $50 they donate to candidates that opt in to the public funding system back from the state.
  • Tax Deductions and Tax Credits – Small-dollar contributions are tax-deductible in some areas, a system which incentivizes contributions and participation, but requires the donor to have a taxable income to receive the credit in the first place. In 1974, Minnesota implemented a tax credit for donations to candidates and political parties, which was eventually replaced by the direct refund program described above.
  • Hybrid structures that combine elements of the above systems

Citizen funding programs help to revitalize democracy by enabling more people to participate. The political system these programs create is not only more open, it’s stronger and more responsive, since politicians will advocate for the people who funded their campaigns—in this case, their constituents. With their issues being heard, voters feel more represented, which leads them to become further invested in policy and governance. This is exactly the kind of positive cycle we desperately need in our political system.

In the next Blueprints for Democracy post, we’ll look at the states and cities that have already put these effective reforms in place, along with the lessons other policymakers can learn from their innovations.