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The recent surge of small donors in American politics raises the prospect for improving democratic performance by engaging a broader range of citizens in financing politics and serving as a buffer against large donations from wealthy individuals and corporations. To date, however, there has been little research to understand how a system of political financing that incentivizes small donors might affect the broader scope of politics. This article begins to address gaps in our understanding by gathering descriptive data and making informed insights based on theories about individual and organizational behavior in politics. Our core argument is that any efforts to promote small donors should be understood in an institutional context that connects small donor activity to the wider dynamics and institutions of the electoral system. While we observe that small donors are more representative with regard to gender and slightly more in terms of income, they are also more ideologically extreme than the rest of the electorate and they tend to contribute to similarly-minded candidates. This has implications for the party system with respect to candidate recruitment, political parties and governing.