Money is Our Business

[This text was originally published in AREA Chicago #8 in May 2009]

Philanthropy is commendable, but it must not cause the philanthropist to overlook the circumstances of economic injustice which make philanthropy necessary. —Martin Luther King, Jr.


The first progressive alternative funds were created by religious communities (in the late 1950’s Unitarian Universalist Veatch Program at Shelter Rock and Catholic Campaign for Human Development) and by black communities with the Brotherhood Crusade/Black United Fund (in 1969). The Black United Fund was created as an alternative to mainstream workplace giving and in response to the Los Angeles riots. Other social action funds as alternatives to workplace-giving emerged in the early seventies like Bread and Roses Community Fund in Philadelphia and Wisconsin Community SharesWomen’s funds and the Funding Exchange models followed in 1972.

The progressive alternative funds grew out of a need in communities to support political work that was not being supported by mainstream philanthropy and workplace giving—movements for Black power, for women’s liberation, against the war in Vietnam. The origins of the progressive alternative funds were in direct relation to developing movements for fundamental social change. This is an important point to note—progressive movements preceded the growth of progressive alternative foundations. Movements spawned progressive funders not the other way around. And movements provided the leadership for the new progressive foundations.

Crossroads Fund comes out of the Funding Exchange (FEX) model and continues to be a member of the FEX network. For us, this model provides a very specific direction about how to conduct our work.

Crossroads Fund is community based. Unlike private foundations, we were not founded by one wealthy donor who left the foundation both a fortune and a specific set of guidelines indicating how the money should be given away. Instead, we raise the major part of our operating budget from over 1,300 donors every year, with gifts ranging from $10 to $30,000. Most of our donors give us $500 a year or less. Raising money from such a broad base of constituents keeps us accountable to a broader community, because our success is dependent on their understanding and agreement of the importance of our work and the work of our grantees. If our donors see us going in a direction that is not community focused, if we falter in serving the public, they have the option to stop supporting us—and without them, we no longer exist. This can also mean that an individual donor may not like one of the many groups across a wide spectrum of progressive organizations that we fund, and that one donor may choose not to write us another check. Over the years we have had the most push-back from donors who were not happy with our support of LGBT groups and Palestinian groups. Despite concerns from a handful of donors, we maintain our commitment to support “controversial” issues based on community direction. Most of our donors, even if they don’t “approve” of every single grant, value our role in supporting a plurality of groups.

Crossroads Fund has a community-led grantmaking process. Our board of directors is made up of a broad range of community members, and they lead a grantmaking committee that is made up of activists and donors who come from the communities that we support. That is key to our philosophy—grantmaking decisions, and control of resources, is in the hands of those who are the most affected by social injustice. It is also critical to our work that we value the partnership of activists and donors creating a cross-class management of resources.

This is an excerpt from Crossroads Fund’s founding principles document circa 1980:

Crossroads Fund is a new Chicago-area foundation, formed by a group of people who are interested in redistributing money to Chicago organizations engaged in grassroots activities designed to bring about fundamental social and political change in the city. The purpose of the foundation is to direct financial support, in the form of grants, to groups which represent disenfranchised populations, demonstrate strong community support, and/or challenge the traditional institutions and distribution of power currently pervasive in city politics and city services.

We think that the methods used in funding projects are important to our goals. Specifically, we intend to incorporate into our decision-making process the advice and guidance of the types of organizations we wish to fund. Thus we envision a donor-community board and a funding process which is conducted in an open and non-hierarchical manner.

The concept upon which the Crossroads Fund was founded was—and still is—a radical one. The founders of Crossroads Fund gave up a part of their own wealth in order to partner with community members and leaders, handing over decision-making power and control to a body of people who are directly accountable to communities. This is contrary the root principles of capitalism, and contrary to the way that many more mainstream foundations are structured.

Philanthropy has always been with us. Before the modern foundation structure existed, wealthy patrons commissioned art, fed the poor, and built museums bearing their names. Much of this was at their whim—individuals with wealth could do what they wanted with their money in ways that they saw fit. In the 1950’s noblesse oblige gave way to the modern non-profit philanthropic sector with rules and regulations overseen by the IRS. Yet there continues to be a whimsical element to philanthropy. It is still often the case that who you know matters more than the quality of your proposal or the innovative nature of your work.

Rather than relying on a network of friends, contacts and potential patrons for support, progressive foundations strive to create a process that is open and accessible to the general public. In the case of Crossroads Fund and other progressive community foundations, the community provides its own mandate for making gifts. A uniform application process further democratizes opportunities for receiving funds, even for groups who are new or may not be as well known. Additionally, the participation of activists in decision-making insures the work that the Fund supports is community-led, effective and risk-taking.

Crossroads Fund and other progressive philanthropic institutions also share a common goal which is somewhat unusual: we would love to put ourselves out of business! Our mission mandates that we support the radical work that is changing systems, and hope is that our grantees will succeed in eradicating poverty, discrimination, injustice. The ultimate goal is to have a culture and a society where there is no need for our funding to exist. Unfortunately, we recognize that this will most likely not happen in our lifetimes, or within the context of the kind of capitalist system in which we all live. But we are very proud of the work of our grantees, employing a mixture of incremental and bold strategies, and of the lasting work they have put in that over time has radically changed our communities.

So, will the revolution be funded? Not really—our tax codes preclude it and as a result our foundation structure does not allow it. Can progressive foundations fund movement infrastructure that supports fundamental systems change? Absolutely. Is there a place for foundations who are working to democratize giving, who present an alternative model for how decisions about money are made, who clarify and provide access to groups seeking funds and donors seeking to share their resources with others? Yes. And in Chicago, we are proud that the Crossroads Fund fulfills a bit of this niche. ◊

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