Small-Dollar Donations Have Exploded in U.S. Elections, and the Results Aren't What Reformers Promised

The Numbers Behind the Revolution

Eileen Laubacher, a former Navy rear admiral running as a Democrat in Colorado's Fourth Congressional District, has raised nearly $10 million for a race in a district Donald Trump carried by 18 percentage points in 2024. At least $7.4 million of that came from small donors giving under $200, according to The Atlantic. The draw isn't Laubacher's odds. It's the opponent: incumbent Republican Lauren Boebert, a national lightning rod whose ability to generate outrage translates directly into out-of-state fundraising for whoever runs against her.

That pattern isn't new. In 2020, Democrat Amy McGrath raised $55 million in small donations for a Senate run in Kentucky against Mitch McConnell. She lost badly. Jaime Harrison raised $71 million in small donations challenging Lindsey Graham in South Carolina that same cycle. He also lost badly. Both were structural long shots that no serious campaign strategist expected to flip.

The money was real. The impact was not.

What the Reformers Got Wrong

For years, the dominant concern in campaign-finance circles was large donors, particularly after the Supreme Court's Citizens United v. FEC ruling in 2010 and McCutcheon v. FEC in 2014 loosened restrictions on political spending on First Amendment grounds. Reform-minded groups argued that small-dollar fundraising was the antidote. The Brennan Center for Justice called small-donor public financing "the most powerful antidote to the outsize influence of megadonors in our elections" as recently as 2023.

The evidence from the past decade complicates that claim significantly.

Small donations haven't neutralized the wealthy-donor class. They've grown alongside it. From 2016 to 2020, the amount small donors spent on congressional races quintupled to more than $2 billion, according to political scientists Zachary Albert and Raymond La Raja. In 2024 congressional elections, small donors more than doubled what large donors spent on direct contributions to candidates. The result isn't a cleaner system with a more representative funding base. It's a louder, more expensive system where candidates compete for emotional engagement from donors who often live nowhere near the district in question.

The Incentive Problem

The mechanics here matter. Small donors, pooled through platforms like ActBlue on the left, tend to respond to conflict and celebrity rather than competitive races or governing capacity. A candidate in a safe red district who says something inflammatory on cable news can trigger a national fundraising wave for their opponent, regardless of whether that opponent has any realistic path to victory.

This creates a direct financial incentive for politicians to perform for a national audience rather than govern for local constituents. Albert and La Raja find that small donors are disproportionately drawn to ideologically extreme candidates and are hugely nationalized in their giving, sending considerable sums out of state to attention-grabbing political figures. The candidates who benefit most from this dynamic are exactly the ones who generate the most friction.

Boebert is a clear beneficiary of this loop, though not in the way her opponents intend. Her provocations generate Democratic outrage, which generates Democratic donations to her opponent, which generates headlines about her opponent raising millions, which reinforces Boebert's brand as a fighter worth hating. The cycle is self-sustaining and serves her politically even when it funds her challenger.

The Strongest Counterargument

The case for small-dollar fundraising isn't trivial. Large donors do buy access. Corporate PAC money does create conflicts of interest that are well-documented and real. A system where a billionaire can deploy tens of millions to shape an election has its own serious distortions, and pointing to wasted small donations doesn't make that problem disappear. Critics of the small-donor critique would also argue that ordinary people participating in politics, even imperfectly, is healthier than ceding the financial field entirely to wealthy individuals and corporate interests.

That's a legitimate concern. But participation and effectiveness aren't the same thing. Millions of people donating to races they can't win, because a politician on the other side made them angry, is not a functional expression of democratic power. It's a release valve that makes donors feel like they did something while producing little measurable electoral change.

What Actually Changes Races

The evidence from contested cycles consistently shows that structural factors — incumbency, district composition, presidential approval ratings, and candidate quality in genuine swing districts — drive outcomes far more than out-of-state small-dollar fundraising in safe seats. The McGrath and Harrison races are the clearest recent proof. Both candidates were well-funded, well-organized, and ran competent campaigns. Neither came particularly close.

As University of Chicago political scientist Anthony Fowler told The Atlantic, corporate and institutional donors are "actually more moderate, or at least more strategic" than small donors. Albert and La Raja's research shows small-donor money tends to be allocated especially inefficiently — a dynamic they call the "Darth Vader effect" — drawn to the most inflammatory figures rather than the most competitive races.

The Laubacher race in Colorado will test the pattern again. Whether $10 million in small-dollar enthusiasm can overcome an 18-point structural deficit is the specific, sourced question this cycle will answer.