Open Secrets: The Nationalization of Political Contributions and the Rising Role of Out-of-State Donations

From Open Secrets June 1, 2023:

As Wisconsin’s recent Supreme Court race shows, activists and donors are starting to pay attention to races well outside of their home turf. In that high-profile race, winner Janet Protasiewicz, a liberal, outraised her conservative opponent Daniel Kelly five to one. More than $2.6 million of Protasiewicz’s $14 million fundraising haul came from out-of-state donors, an unusually high number for a state Supreme Court race. Kelly, who raised just $226,000 from out-of-state donors, benefited from extensive outside spending by national groups like Fair Courts America.

This Wisconsin race is just one example of increasing “nationalization” of state and local political races. While we know that U.S. Senate candidates have raised more from out-of-state donors, it is unclear how robust this trend actually is. Is it driven primarily by candidates with national reputations like Sens. Elizabeth Warren (D-Mass.) and Bernie Sanders (I-V.t), or are all candidates starting to take in more money from out-of-state donors?

This report explores whether candidates up and down the ballot are raising more money from outside their own states and districts and identifies trends that merit further research. Federal candidates are increasingly reliant on out-of-state contributions, OpenSecrets analysis found, while out-of-state contributions have been slower to enter state races.

OpenSecrets — using street address information for campaign donors provided by state campaign finance agencies and the Federal Election Commission — has long tracked and displayed the amount of money candidates for public office collect from both inside and outside their districts and states. But prior to this analysis, OpenSecrets had yet to explore these trends over time or extend this work beyond candidates for federal office.

The 2021 merger of the National Institute on Money in Politics (NIMP) and the Center for Responsive Politics has made it possible for OpenSecrets to provide more extensive analysis of contribution data for the state as well as federal level, enabling the identification of trends in how much candidates rely on money from outside of their districts or states.

Federal candidates increasingly reliant on out-of-state money

Federal races have become increasingly expensive in recent years, and the most competitive contests tend to attract astronomical fundraising hauls. In 2000, victorious Senate candidates raised an average of $7.3 million – over three and a half times less than the $26.5 million raised by the average Senate victor in 2022. The average U.S. House winner spent nearly $2.8 million during the 2022 election cycle, nearly three and a half times the $840,300 the average winner spent in 2000.

A myriad of factors contribute to the increased cost of federal races, particularly Senate races, but the rise of outside spending after the U.S. Supreme Court’s 2010 Citizens United vs. Federal Election Commission decision cannot be overstated. The Court argued that political groups not affiliated with candidates could solicit unlimited donations from people and corporations as long as the group discloses its donors, opening the door for political groups to raise huge sums of money from a small number of donors. These groups, commonly called “outside spending” groups, spent more than $2 billion on federal elections during the 2022 election cycle.

As federal political campaigns are still subject to contribution limits, they need to raise money from far more people to counter spending by outside groups, and as such have also increased their overall fundraising. Many have begun looking outside their state’s borders for additional funds.

Since 1998, federal candidates have generally relied less and less on money from inside their state.

darryll k. jones