The Funding Exchange was a left-of-center grant making membership organization that funded community activist-led organizations. The national organization also administered donor-advised funds and had its own grant making program, which eventually led to concerns about the national organization competing with its own local member foundations and contributed to the decision to close the organization in 2018. ¹

Founding

The Funding Exchange was founded in 1979 but had its origins in 1960s the impact that radical student protests and activism had on young heirs to large fortunes, especially George Pillsbury, great-grandson of the founder of Pillsbury food company. ² Pillsbury’s parents were heavily involved in Minnesota state politics and his father served as a Republican state senator. But while attending Yale, Pillsbury became radicalized and became a financial supporter of and volunteer for the local Black Panther Party, as well as the anti-war and women’s activist movements. ³

Pillsbury later teamed up with another baking fortune heir, Obie Benz, who founded the Vanguard Foundation, to start the Funding Exchange. Its innovation at the time was the decision to provide funding for community activist organizations, while also remaining relatively uninvolved with how the funds were used, with the overarching goal of redistributing inherited fortunes. ⁴

Networked Organizations and Donor-Advised Funds Model

When it was founded in 1979, the Funding Exchange functioned as an administrative center to connect donors to community organizations. Eventually, the national organization decided to begin managing donor-advised funds as a means of generating income. This decision was controversial because some members believed that it was a departure from the community-activist focused grantmaking that the organization had started with. However, this model allowed the national office to begin making national, as opposed to very localized grants, which was something that donors had desired. ⁵

Decline and Conclusion of Operations

Before the organization’s final dissolution in 2018, the board of directors commissioned a legacy task force to compile the history of the organization and examine what had led to its closure. This report was released in 2016. ⁶

Among the notable events that led to the organization’s closure was the collapse of the Vanguard Public Foundation, which had been a founding member of the Funding Exchange. The organization, which had been founded in 1972, was ejected from the exchange network in 2007 due to aberrant financial decisions and complaints that grants were not being fulfilled. The organization collapsed in 2011 amidst an investment scam in which its executive director found guilty of wire fraud and money laundering. The report characterized this as a “significant blow” to the Funding Exchange. ⁷

In 2000, the national office began to use funds from member organizations to cover its own expenses, and also prohibited member funds from making more than half of their grants through donor advised funds in order to preserve the emphasis on decision making by community organizations. However, a full 98 percent of the national office’s grant making was allocated through donor-advised funds. There were also accusations that the national office was working at cross purposes, by working to train and strengthen member funds and organizations while acting as their competitor when it came to fundraising. ⁸

In addition to this financial concerns, numerous internal fights broke out stemming from a variety of disagreements among stakeholders, ranging from how the board of directors functioned, to contentious battles over diversity and representation in programs and trainings. ⁹

The financial crisis of 2008 negatively affected the national office and its operations, with staffing cuts and a 50 percent drop in the value of its donor-advised funds between 2000 and 2011. Amidst the decline and internal disagreements, the organization voted to cease national programs in 2012, and in 2013 announced that the organization would be dissolved, with the assets being divided up among the remaining network organizations. ¹⁰

Finances

Fiscal year 2017 was the Funding Exchange’s last year in operation. It reported $5,856,192 in revenue, of which $5,813,082 was derived from investment income, specifically the liquidation of assets. In the prior fiscal year, the organization reported only $104,762 in revenue, of which $103,089 was derived from investment income. The organization had $8,847,897 in expenses, which was partially funded via the liquidation of the organization’s remaining assets. $8,495,108 was distributed as grants. The organization liquidated its $3,330,724 in assets, ending the fiscal year and ceasing operations with net zero assets. ¹¹

Policies and Projects

In addition to serving as a hub for funding to flow to regional grant-making organizations that were focused on funding local community organizations, the national office of the Funding Exchange also provided its own grants, usually through donor advised funds that it managed. Prior to being closed, the organization contributed to a variety of left-of-center organizations. ¹²

In fiscal year 2010, the fund distributed over $4 million in grants, of which only $573,744 was distributed to member organizations, with the rest being distributed to 79 various left-of-center groups around the country focused on environmental, economic, racial, and sexual- and gender- focused organizations. Some grant recipients included the left-of-center Southern Poverty Law Center, the National Resources Defense Council, and the Gay and Lesbian Alliance Against Defamation. ¹³

Member Funds

At the time of its dissolution, the Funding Exchange had 16 member funds that continued operations around the country. Prior to dissolution, these funds provided members for the board of directors and guided the organization’s operation. ¹⁴

Appalachian Community Fund in Knoxville, Tennessee operates in West Virginia and eastern Tennessee. It funds a variety of left-of-center organizations focused on race, economics, gender and sexual identity, and environmental issues. ¹⁵

Bread and Roses Community Fund is located in Philadelphia Pennsylvania. It was started in 1971 as a way for people associated with radical groups, such as the Black Panther Party and Women United for Abortion Rights, operating under the name The People’s Fund. This name was changed to The Bread and Roses Community Fund in 1977. The group embraces a revolutionary left-of-center politics and makes grants to combat what it considers to be injustice and inequality in economic, gender, and sexual fields. ¹⁶

Chinook Fund is located in Denver, Colorado and embraces a revolutionary left-of-center politics through grantmaking to black, indigenous, people of color (BIPOC) led organizations that advance a vision of what it considers to be social justice. ¹⁷

Crossroads Fund, located in Chicago, Illinois, provides grants to local organizations that advance its left-of-center conception of racial, social, and economic justice, specifically environmental, economic, and sexual and gender issues among others. ¹⁸

Foundation for Change is located in Wheaton, Illinois and is focused promoting a “restorative justice” approach to criminal justice. ¹⁹

Fund for Idaho is a left-of-center organization that works to partner with community activists to guide grant making focused on gender, racial, and environmental issues. ²⁰

Fund for Santa Barbara is a left-of-center organization focused on promoting the rights of indigenous people, stating that it conducts its work on “unceded” and “sacred” land, and working towards an end to “exploitation” and “oppression.” ²¹

Fund for Southern Communities in Decatur, Georgia and funds left-of-center organizations in Georgia and North and South Carolina. The fund looks to support organizations that are focused on environmental, “anti-racist”, economic, and sexual and gender activism. ²²

Hawaii People’s Fund funds left-of-center community activist groups in Hawaii. ²³

Haymarket People’s Fund is a left-of-center grant making institution in Boston, Massachusetts. George Pillsbury, one of the key founders of the Funding Exchange, was one of the original founders. The organization is named after the Haymarket affair, which resulted in the death of eight police officers and four labor protesters. The fund supports community organizations working to overthrow “systemic racism” and hosts workshops for members of the “social justice movement” to “undo racism.” ^{24 25}

Headwaters Foundation for Justice works to promote “BIPOC” organizations in Minnesota and has been heavily involved in funding anti-law enforcement protests in the wake of George Floyd’s death. ²⁶

Liberty Hill Foundation is a left-of-center Los Angeles-based grant making organization that emphasizes decision making by those “closest to pain” and embraces a broad spectrum of intersectional revolutionary causes, including racial, gender, and sexual activism, as well as environmental and economic causes. ²⁷ George Pillsbury’s sister Sarah, was involved in the organization’s founding in the 1970s. ²⁸

McKenzie River Gathering Foundation (now known as Seeding Justice) is an Oregon-based left-of-center grant making organization focused on “liberation” and advancing its conception of racial, economic, and environmental activism. ²⁹

North Star Fund is a New York City-based left-of-center grant making organization that funds racial activist organizations focused on advancing “social justice” in the New York City and Hudson Valley areas. ³⁰

Wisconsin Community Fund of Forward Community Investments is a Wisconsin-based community development financial institution that provides loans and training to communities lacking in access to financing. ³¹

Three Rivers Community Fund is a Pittsburgh-based left-of-center grant making organization that funds a variety of community organizations focused on sexual and gender, economic, and environmental issues. ³²

1.  Lurie, Theodora. “Change Not Charity: The Story of The Funding Exchange.” 2016. Accessed April 18, 2022. https://fex.org/content/uploads/2017/05/funding_exchange_history_spring_2017.pdf
2. Lurie, Theodora. “Change Not Charity: The Story of The Funding Exchange.” 2016. Accessed April 18, 2022. https://fex.org/content/uploads/2017/05/funding_exchange_history_spring_2017.pdf.
3. Lurie, Theodora. “Change Not Charity: The Story of The Funding Exchange.” 2016. Accessed April 18, 2022. https://fex.org/content/uploads/2017/05/funding_exchange_history_spring_2017.pdf.
4. ^[1] Lurie, Theodora. “Change Not Charity: The Story of The Funding Exchange.” 2016. Accessed April 18, 2022. https://fex.org/content/uploads/2017/05/funding_exchange_history_spring_2017.pdf.
5. Lurie, Theodora. “Change Not Charity: The Story of The Funding Exchange.” 2016. Accessed April 18, 2022. https://fex.org/content/uploads/2017/05/funding_exchange_history_spring_2017.pdf.
6. Lurie, Theodora. “Change Not Charity: The Story of The Funding Exchange.” 2016. Accessed April 18, 2022. https://fex.org/content/uploads/2017/05/funding_exchange_history_spring_2017.pdf.
7. Lurie, Theodora. “Change Not Charity: The Story of The Funding Exchange.” 2016. Accessed April 18, 2022. https://fex.org/content/uploads/2017/05/funding_exchange_history_spring_2017.pdf
8. Lurie, Theodora. “Change Not Charity: The Story of The Funding Exchange.” 2016. Accessed April 18, 2022. https://fex.org/content/uploads/2017/05/funding_exchange_history_spring_2017.pdf.
9. Lurie, Theodora. “Change Not Charity: The Story of The Funding Exchange.” 2016. Accessed April 18, 2022. https://fex.org/content/uploads/2017/05/funding_exchange_history_spring_2017.pdf.
10.  Lurie, Theodora. “Change Not Charity: The Story of The Funding Exchange.” 2016. Accessed April 18, 2022. https://fex.org/content/uploads/2017/05/funding_exchange_history_spring_2017.pdf.
11. The Funding Exchange, IRS (Form 990), 2017, Part I
12. Lurie, Theodora. “Change Not Charity: The Story of The Funding Exchange.” 2016. Accessed April 18, 2022. https://fex.org/content/uploads/2017/05/funding_exchange_history_spring_2017.pdf.
13. The Funding Exchange. Return of an Organization Exempt From Income Tax (Form 990). 2017, Part I.
14.  “Funding Exchange History.” FEX.org. Accessed April 19, 2022. https://fex.org/.
15. “About Us.” Appalachian Community Fund. Accessed April 19, 2022. https://appalachiancommunityfund.org/about-us/.
16. “About.” Bread & Roses Community Fund. March 12, 2013. https://breadrosesfund.org/about/.
17. “Another World Is Possible Fund.” Chinook Fund. Accessed April 19, 2022. https://chinookfund.org/anotherworld/.
18. ^[1] “Our Approach: Change Not Charity.” CrossRoadsFund.org. https://crossroadsfund.org/content/our-approach-change-not-charity.
19. “Foundation for Change – Services.” Foundation4Change.net. Accessed April 19, 2022. http://foundation4change.net/services.
20. “Mission & Values.” FundForIdaho.org. Accessed April 19, 2022. https://fundforidaho.org/?page_id=70.
21. “Fund for Santa Barbara: About Us.” Fund for Santa Barbara. Accessed April 19, 2022. https://fundforsantabarbara.org/about-us/.
22. “About Us.” Fund for the South. Accessed April 19, 2022. https://www.fundforsouth.org/FSC_2015/index.php/about-us.
23. “About Us.” Hawaii People’s Fund. Accessed April 19, 2022. https://www.hawaiipeoplesfund.org/about-us/.
24. “Haymarket People’s Fund: Our Story.” Haymarket People’s Fund. Accessed April 19, 2022. https://www.haymarket.org/our-story.
25. Lurie, Theodora. “Change Not Charity: The Story of The Funding Exchange.” 2016. Accessed April 18, 2022. https://fex.org/content/uploads/2017/05/funding_exchange_history_spring_2017.pdf.
26. “Mission & Values.” Headwaters Foundation for Justice. Accessed April 19, 2022. https://headwatersfoundation.org/about/mission-values/.
27. “Our Social Justice Priorities.” Liberty Hill. Accessed April 19, 2022. https://www.libertyhill.org/what-we-do/our-priorities/.
28. Lurie, Theodora. “Change Not Charity: The Story of The Funding Exchange.” 2016. Accessed April 18, 2022. https://fex.org/content/uploads/2017/05/funding_exchange_history_spring_2017.pdf.
29. “Seeding Justice: Who We Are.” Seeding Justice. Accessed April 19, 2022. https://www.seedingjustice.org/who-we-are/.
30. “How North Star Fund Works.” North Star Fund. Accessed April 19, 2022. https://northstarfund.org/about/.
31. “The CDFI Story.” Forward Community Investments. Accessed April 19, 2022. https://www.forwardci.org/the-cdfi-story.
32. “Mission & Vision.” Three Rivers Community Foundation. Accessed April 20, 2022. https://www.trcfwpa.org/?page_id=13.