Small contributions, big impact: ‘Hidden donors’ play major role in political campaigns

New research reveals that donations less than $200 — which don’t have to be reported to the FEC — made up 33% of Bernie Sanders’ 2016 election funds.

PASADENA, Calif. — No political campaign, from a local mayoral election to the U.S. presidency, is going to be successful without generous donations from supporters. With the 2020 presidential election mere months away, millionaire and billionaire donors have become a hot topic. Meanwhile, a new study finds that it is actually the smaller contributors, those who only donate $200 or less, that may make the biggest impact.

Researchers from the California Institute of Technology say that these so-called “hidden” donors add up quickly and usually make up a significant portion of many candidates’ campaign funds.

This study focused on Bernie Sanders’ 2016 presidential campaign. Unlike many other candidates, Sanders used intermediary online fundraising service, ActBlue, to collect funds from donors. Now, typically, campaign donations below $200 don’t have to be reported to the Federal Election Commission (FEC). However, since Sanders used ActBlue, the rules for his donations were a bit more stringent and he was required to report those smaller donations.

“That may seem like a small amount, but we have always wondered what it adds up to,” says Mike Alvarez, professor of political science at Caltech and the study’s lead author, in a release. “Until recently, we haven’t had the data to ask this question.”

All in all, after sorting through over 100 million donation records, the research team found that these small donations made up 33% of Sanders’ overall campaign funds. Moreover, Sanders received seven times more hidden donations than larger, visible donations.

“What this is saying is that grassroots efforts to raise money from tens of thousands of people are an important part of a politician’s campaign,” Alvarez adds.

Seo-young Silvia Kim, one of the study’s co-authors and a soon-to-be professor at American University, says she quickly realized while doing preliminary research that the reported donations from online services like ActBlue painted a much clearer picture of where candidates were getting their campaign money.

“Just in the 2016 election cycle, there were more than 1,133,000 files and more than 100 million records of individual contributions for all the campaigns,” she explains. “But to make sense of the data, you have to dig deep into the raw data, and not just its summaries. That’s when I noticed how intermediary committees were reporting contributions differently than the usual committees.”

“It’s hard to scrape all this information together,” Alvarez says. “The data are either not available or hard to obtain. Silvia is an incredibly talented data scientist. She linked the many data sets together, which was no easy task.”

For whatever reason, the data also suggests that hidden donors tend to make their contributions later in campaign season. These smaller donors are usually female, students, and often racial or ethnic minorities.

Looking ahead to the 2020 election, the study’s authors say they plan on analyzing this year’s donations as well. Additionally, even more online fundraising platforms are being used this time around than in 2016, so they should be able to gather further data on small donations across a variety of candidates, not just Bernie Sanders.

“Money is very important in politics, but all the previous studies about campaign finance were restricted to relatively large donors, leading to a skewed picture of this important political activity,” concludes co-author Jonathan Katz, the Kay Sugahara Professor of Social Sciences and Statistics at Caltech. “Given changes in technology, these smaller donors are becoming both more numerous and important.”

These findings just go to show that no campaign contribution is too small, and while larger donors may dominate the headlines, every dollar helps.

The study is published in the Election Law Journal.

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