I read the 90 page history of the Funding Exchange, so you don’t have to

Sarah DeLuca
Jul 10, 2017 · 4 min read

A friend mentioned this report to me and I thought, “Great, I have an hour to read this tonight!”

Then I realized it was 90 pages, and I needed more time to get through it all. It was fascinating, informative, and eye-opening for my nerd-brain. But if you don’t have time to dig into the whole report, here’s a recap.

Like many 20- and 30-something fundraisers and grassroots activists these days, I had heard plenty from my elder colleagues about the Funding Exchange. I knew they had led the charge for funding of social change organizations, moving many foundations to be more progressive than their predecessors. I also knew that they had their own share of problems, and the national network disbanded in 2013, but I didn’t know why.

Gathering of progressive donors, 1975. Photo courtesy of Obie Benz/FEX

What is the Funding Exchange?

George Pillsbury and his peers of activist-philanthropists created one of the first-ever community-based foundations, where local grassroots organizers made the funding decisions, in partnership with (as opposed to completely directed by) people with wealth. They created the Haymarket People’s Fund, and as they broadened their network, more community foundations sprouted up around the county. They thrived as local chapters, but realized they needed an overarching team to coordinate and share lessons learned.

That is when the Funding Exchange (FEX) began. At the height of their work, there were 17 local chapters and three national grantmaking programs run out of a central office. The foundations that made up FEX gave grants to largely untested, highly controversial organizations, and many groups that didn’t even have tax-deductible status, which made them impossible to receive funds from traditional foundations.

There were regular conferences and gatherings to connect women with wealth, discuss racial equity, train in socially responsible investing, and learn from the other chapters.

Photo courtesy of Three Rivers Foundation/FEX

But what happened? A few causes

  • Like so many foundations and organizations, they relied on a booming stock market to continue business as usual. When the 2008 crash happened, funding dried up across the network.
  • The Board of Directors was huge — representatives of all 17 chapters, funders, and national staff — We’ve all been in a 20+ person meeting, consensus becomes impossible! There were tensions between the local chapters and the national office, competing with each other for funding rather than working together.
  • They stopped evolving. The Funding Exchange started as an innovator, truly creating the world of social change philanthropy. Today, you can see the impact with hundreds of foundations divesting from fossil fuels, most large foundations putting at least a portion of their funding towards grassroots, and diversity initiatives galore. But after success in making social justice funding more mainstream, they lost their edge, and were now competing for the space they created.
Photo courtesy of Bread & Roses Community Fund/FEX

What remains

Sixteen funds remain, working in local communities across the country. The founders and early leaders of FEX have gone on to lead foundations, non-profit organizations, and some to electoral politics.

Many social justice philanthropists today can trace their journey back to a conference, a meeting, or report that came from the Funding Exchange or one of their chapters. Many non-profits can trace their own journey back to seed funding that they received from them. Resource Generation, TSNE MissionWorks (formerly Third Sector New England), Peace Development Fund, Threshold Foundation, and many others give credit to the Funding Exchange network for their founding and direction.

The Funding Exchange basically created social justice philanthropy, and got us to where we are today. Now, our mandate is to continue to innovate, fund untested strategies and radical ideas. What will the next phase of social change philanthropy look like? Where are millennials going to direct the estimated $30 trillion that will be handed down to them from baby boomers? Where does impact investing fit in?

Connect with me here, on LinkedIn, or good old fashioned email as we figure it all out.

Sarah DeLuca

Written by

Organizer, activist, and philanthropy coach — rabble rousing on privilege, social change, and life. www.MoveMoneyShiftPower.com

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