AFR-CEPR Research: Small Donations Show Growing Power of Grassroots Vs. Wall Street


March 6, 2019


Carter Dougherty,, (202) 251-6700

Small Donations Show Growing Power of Grassroots Vs. Wall Street

New members of Congress demonstrated substantially less reliance on money from the financial services industry than incumbents who won re-election in 2018, according to new research by Americans for Financial Reform and the Center for Economic Policy Research.

First-term Democratic members of the House raised, on average, 17 percent of the money for their campaign committees from small donors, compared with 9.4 percent by Democratic incumbents who won re-election. Republicans raised 5.5 percent of their cash from small donors in 2018.

What’s more, new Democratic members in tight races – defined here as a winning margin of less than 10 percent – were able to rely more on small donations than even new Democratic members overall. They got 18.6 percent of their cash from small donors.

Wall Street specifically played a conspicuously smaller role in fundraising than did small donors for new Democratic lawmakers in the House. The portion of their money that new Democratic members raised from Wall Street (10 percent) was also lower than House Democrats overall (12.9 percent). The ratio of small-donor funding to Wall Street money for frosh Democrats was, at 2.4, about double the ratio for incumbents who won re-election. Republicans, on average, raised more from Wall Street than small donors.

“More candidates chose to focus on waging campaigns based on good public policy, not what delights Wall Street donors,” said Lisa Donner, executive director of Americans for Financial Reform. “That choice inspired the grassroots and empowered small donors. We still have a long way to go in preventing Wall Street dollars from systematically distorting our democracy. But this is a very hopeful development. It should inspire still more members to stand up for economic justice.”

“The 2018 elections were, hopefully, the moment when the grassroots started to explode the myth that lawmakers need to do the bidding of monied interests if they want to raise the money needed for a viable campaign,” said Jeff Hauser, executive director of the Revolving Door Project at the Center for Economic Policy Research. “That said, we still need many legal changes to rein in the ability of Wall Street and other corporations to purchase political power.”

The six largest banks in the country reaped profits of over $100 billion for the first time in 2018. The numbers above represent campaign committees and take no account of the dark money that funded independent expenditures, which often account for the majority of election-related advertising that voters see. Wall Street money in American politics, once the final calculations arrive, is likely to hit the $2 billion threshold yet again for the 2016-18 cycle.

About the Data

See data for the entire House membership of the 116th Congress, and additional information about new members.

CRP defines small donors as those giving $200 or less, a fairly stringent definition. A donor who gives $20 a month for 12 months online is not a “small donor,” and can be very different in income level than people who give $1,000 at once. In general, the greater the percentage of donations of $200 or less, the more likely there are a high percentage of donations slightly above that level.

The data set is a special set prepared for AFR and CEPR. It includes the FIRE sector – finance, insurance, and real estate – but factors out health insurers, who typically have a different set of policy interests than Wall Street.