The New York City public campaign finance system has in recent years been seen as the standard for a new model of small donor-based systems but a new report is sending the first real warning signs. Setup to increase candidate reliance on small donations from bigger numbers of voters, multiple municipalities including Los Angeles have copied parts of the NYC system.

It is in this environment that the latest report is so important, as it shows the first significant increase in the percentage of total donations coming from single large donors. The report was produced by the think tank Campaign Finance Institute and presented earlier today by CFI’s Executive Director Michael J. Malbin to the New York City Campaign Finance Board. Among the findings:

The NYC system showed a “striking increase in the percentage of money from small donors between 1997 and 2013…. Given the strength of the results through 2013, it was surprising to see the numbers for 2017. The percentage of money coming from small donors declined for both incumbents and non-incumbents, whether we look only at private money or at private and public money combined. In fact, when looking at private money alone, the percentages for 2017 were below 1997.“

 The full Malbin testimony is available here. Unusual for public campaign financing systems, the New York City system matches campaign contributions collected by candidates. Most earlier public finance systems focused on giving candidates a one-time government check to finance their campaigns. A 2010 review of the effectiveness of the NYC system since its start in 1988 was put together in a report by the Brennan Center for Justice at NYU School of Law. It shows how important recent changes may be. That Brennan Center report stated plainly:

It has led to more competition, more small donors, more impact from small contributions, more grass roots campaigning, and more citizen participation in campaigns. All this, while simultaneously reducing the influence of big money in general and corporate money in particular (only donations from living, breathing New Yorkers are matched)

In light of the new findings, more eyes will be focused on the balance of future NYC political donations. You can also watch the two-hour video below to see the entire 2017 post-election hearing meeting of the New York City Campaign Finance Board containing the testimony by CFI’s Michael J. Malbin: