This month leftwing donors will meetat the Berkeley Marina conferencecenter on San Francisco Bay to dis-

cuss where their money will do the mostgood. “Momentum 2006” is co-sponsoredby seven groups that are trying to show richpeople how to work effectively with radicalsocial activists. The groups are an interest-ing mix. They include one hundred membersof the Women Donors Network, the ThirdWave Foundation, which supports feministgirls and women aged 15 to 30, the ResourceGeneration, which works with 750 “youngpeople with financial wealth,” and the TidesFoundation, which has famously revolution-ized how money can be bundled and chan-neled from big grantmaking foundations totiny groups of rabble-rousers (see December2003 Foundation Watch). Yet another at-tendee is the New York City-based FundingExchange. It has carved out its own uniqueniche in the universe of leftwing donor groupsby coordinating the work of “alternative”community foundations.

Community foundations have had an hon-ored place in the history of American philan-thropy. In a community foundation donorsagree to pool their gifts for the betterment oftheir local communities. Instead of creating aprivate foundation, the donor lets the com-

April 2006

CONTENTS

The Funding ExchangePage 1

Philanthropy NotesPage 8

Radical entertainer Harry Belafonte and Ellen Gurzinsky,executive director of the Funding Exchange.

Summary: At a time when liberal ideasare unpopular among voters the FundingExchange offers a different leftwingstrategy for achieving political and socialchange. It links radical activists towealthy donors to create a uniquenetwork of community foundations.

The Funding ExchangeBuilding “Alternative” Community Foundations

By James Dellinger

munity foundation’s trustees allocate fundsaccording to their best judgment of commu-nity needs. However, donors also may advisethe trustees on how to use their contribu-tions. The first community foundation wasestablished in Cleveland in 1916 and there areover five hundred in the U.S. today.

The Funding Exchange takes the idea in anew direction. It works closely with a groupof community foundations unlike most oth-ers. These organizations do not limit theirwork to a specific city or region and they donot focus on traditional forms of charity.Instead the foundations promote radical po-litical and social activism. “The communityfoundations who join the Funding Exchangenetwork are part of a growing movement toexpand progressive philanthropy,” saysFunding Exchange executive director Ellen

Gurzinsky. “Our network shares technicalassistance information and best practices,political education programs on cutting-edgeissues, skill development in every arena, andsolidarity in the support of social justice andhuman dignity.”

FoundationWatch

2 April 2006

Publisher: Terrence Scanlon

Foundation Watchis published by Capital ResearchCenter, a non-partisan education andresearch organization, classified bythe IRS as a 501(c)(3) public charity.

Address:1513 16th Street, N.W.Washington, DC 20036-1480

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Web Site:http://www.capitalresearch.org

Reprints are available for $2.50prepaid to Capital Research Center.

In many respects, the Funding Ex-change is but another example of theLeft’s current preoccupation with net-working and infrastructure-building. Ittries to locate the most radical commu-nity programs and projects acrossAmerica and link them to wealthy do-nors, thereby leveraging private wealthto achieve egalitarian and collectivistpolitical and social goals.

Although it has left-wing aims, theFunding Exchange owes much to theconcept of venture philanthropy. Ven-ture philanthropy is a somewhat opaquenotion that seeks to apply the conceptof venture capitalism to charitable giv-ing. Venture philanthropists try to helpcharities meet their goals by activelymonitoring their gifts and demandingthat charities produce measurable re-sults. The strategy is that donorsshould use the act of giving to improve theefficiency and effectiveness of charities.

The Funding Exchange re-directs thisoutcomes-oriented strategy: It wants to fundthe growth of effective organizations whosemission is leftwing social activism. It alsowants to build a network of activist philan-thropists.

Gurzinsky has observed that communityfoundations joining the Funding Exchange“are at the forefront of virtually every contem-porary movement for social change. Theyprovide essential resources for both urbanand rural organizing. They fund the arts andculture as organizing tools. They directlysupport efforts to stave off the erosion ofhard-won gains in affirmative action and immi-gration policies. And they respond to emer-gency issues as well as contribute to the long-term infrastructure needs of their grassrootsgrantees.”

Large private foundations and wealthyindividual donors—think Ford, think Soros—have few misgivings about supporting radicalactivists. However, most traditional commu-nity foundations hesitate to support activistgroups whose goal is creating communityturmoil. That’s what makes the Funding Ex-change so unusual and significant.

According to Andy Robinson, author ofGrassroots Grants: An Activist’s Guide toProposal Writing, the Funding Exchangehas profoundly influenced so-called “pro-gressive philanthropy”: “What seemed at thetime a radical idea—activists giving outgrants—has since become almost common-place as more and more mainstream founda

tions hire organizers and hell-raisers as pro-gram officers. The face of philanthropy ischanging—slowly, but irrevocably...” Thisamazing transformation is happening with-out public notice but with increasing supportfrom the foundation world.

FEX’s Gilded and Guilt-Ridden Heirs The Funding Exchange (FEX) was set upin 1979 by six foundations in Philadelphia,Boston, New York, San Francisco, Los Ange-les and Portland/Eugene, Oregon. They hopedto coordinate their activities in order to, asthey say, “create change.” FEX expandedover the next two decades to include sixteenfoundations, all of which aggressively pro-mote community-based advocacy. To maxi-mize their impact the member foundationsfocus their donor dollars and manpower onhot-button causes. However, the FEX na-tionwide network of donors and activistsallows the foundations to move their resourcesfrom city to city in rapid response to immedi-ate demands (e.g., when priorities changefrom, say, a fight over living-wage laws inSanta Fe, New Mexico to anti-war protest inthe Washington D.C.). Says June Makela,FEX executive director from 1980-1991, “TheFunding Exchange’s role was to ‘organize’progressive philanthropy through this model.

George Pillsbury, co-founder of the Boston-based Haymarket People’s Fund, anoriginal founder of the Funding Exchange.

3April 2006

FoundationWatch

For frequent updates on environmental groups,nonprofits, foundations, and labor unions, check out the

CRC-Greenwatch Blog at

www.capitalresearch.org/blog

The goal was to connect wealthy individualswith progressive values to the important, butoften invisible, work going on in their owncommunities and also around the country.”

The FEX self-described mission is “changenot charity”; its agenda is “structural eco-nomic change.” Leftwing politics, not philan-thropy, inspires its leadership.

FEX members are located in liberal citiessuch as San Francisco and Boston and col-lege towns like Madison, Wisconsin. How-ever, there are also FEX member groups inplaces not known for radical activism: Knox-ville, Tennessee, has the Appalachian Com-munity Fund and the Fund for Santa Barbarais in a wealthy California coastal resort town.In size the foundations range from the LibertyHill Foundation in Los Angeles, which had2004 assets of $7 million and revenues ofalmost $5.7 million, and the Headwaters Foun-dation for Justice in Minneapolis with 2005revenues of $2.1 million, to the $254,000 re-ceived in 2003 by the Three Rivers Commu-nity Foundation of Pittsburgh.

While their funding priorities differ, thefoundations endorse similar political goals,including coercive environmental regulation,single-payer health care, anti-war protest,opposition to the Administration’s “war onterror,” opposition to free trade and restric-tions on immigration, support for abolition ofthe death penalty, abortion rights, and“GLBT” (gay, lesbian, bisexual, andtransgender) advocacy.

The foundations also share a commonrhetoric emphasizing the claim that, to quoteone activist, “Wealth disparity in the U.S.,the history of exploiting human and naturalresources, and the undue influence of wealthon our political system, perpetuate andstrengthen a destructive dynamic within ourcountry and abroad.” That “destructive dy-namic” is what mainstream America cel-ebrates as economic liberty and individualrights.

Because FEX members insist thatAmerica’s wealth is the product of exploita-tion and the abuse of privilege, one wouldexpect them to have a low opinion of philan-thropy. After all, the old Marxist Left de-spised philanthropy; it considered charity away for the rich to salve their consciencesabout human misery and avoid facing its rolein creating economic inequality. But the oldLeft has collapsed. These days radicals needhelp wherever they can find it, and they arewilling to rehabilitate the idle rich if they willuse their wealth for activist ends. That’s thepoint of Robin Hood was Right: A Guide toGiving Your Money for Social Change, abook published by the Vanguard Public Foun-

dation, the FEX foundation in San Francisco.

Robin Hood was Right raises the issuethis way:

During the last decade, blackshave become beautiful, gays havecome out, women have becomeliberated—but who could imag-ine publicly celebrating inheritedwealth? Its very existence wasproof of injustice...

In other words, heirs as a group are typi-cally depicted as young, idle and irrespon-sible. They live off their wealth, contributingnothing to society. How can anyone cel-ebrate inherited wealth?

The Funding Exchange answers that evenheirs can be liberated, and the book RobinHood was Right is their manifesto. It is “acollection of anonymous anecdotes docu-menting the alienation that resulted when achildhood of wealth collided with the idealis-tic, egalitarian world view circa 1970s activ-ism”—i.e. when poor little rich boys and girlshated their parents and wanted to do good.

The Funding Exchangelinks radical projectswith wealthy donors,leveraging privatewealth to achieveegalitarian and

collectivistpolitical andsocial goals.

FoundationWatch

4 April 2006

Funding Exchange Financial Information

The Funding Exchange (FEX)Total private poundation grants received, 1999-2004: $17,605,8572003 revenue/contributions: $5,144,4622003 expenses/grants distributed: $7,113,7372003 assets: $30,826,3482000-2003 lobbying expenses: $646,6002003 government grants received: $39,600

Appalachian Community FundKnoxville, TNTotal private foundation grants received, 1999-2004: $497,5002003 revenue/contributions: $361,9722003 expenses/grants distributed: $451,6222003 assets: $163,653

Bread and Roses Community FundPhiladelphia, PATotal private foundation grants received, 1999-2004: $825,2552003 revenue/contributions: $676,9352003 expenses/grants distributed: $841,2122003 assets: 1,533,786

Chinook FundDenver, COTotal private foundation grants received, 1999-2004: $545,0602003 revenue/contributions: $332,1202003 expenses/grants distributed: $389,7942003 assets: $1,146,635

Crossroads FundChicago, ILTotal private foundation grants received, 1999-2004: $573,3912003 revenue/contributions: $439,4822003 expenses/grants distributed: $447,8892003 assets: $214,260

Fund for Santa BarbaraSanta Barbara, CATotal private foundation grants received, 1999-2004: $876,6002003 revenue/contributions: $593,2662003 expenses: $375,7772003 assets: $1,524,7972000- 2003 legislative and grassroots expenses: $345,845

Fund for Southern CommunitiesAtlanta, GATotal private foundation grants received, 1999-2004: $899,2502003 revenue/contributions: $564,2192003 expenses/grants distributed: $709,1702003 assets: $1,171,2052003 government grants received: $56,911

Hawai’i People’s FundHonolulu, HI2003 revenue/contributions: $91,5602003 expenses/grants distributed: $104,9562003 assets: $31,560

Haymarket Peoples FundBoston, MATotal private foundation grants received, 1999-2004: unknown2003 revenue/contributions: $3,518,3802003 expenses/grants distributed: $2,128,4532003 Assets: $6,699,403Legislative and grassroots lobbying 2000- 2003: $611,670

Headwaters Foundation for JusticeMinneapolis, MNTotal private foundation grants received, 1999-2004: $595,9002003 revenue/contributions: $1,560,2042003 expenses/grants distributed: $1,147,4532003 assets: $4,085,405Legislative and grassroots lobbying: $59,650

Liberty Hill FoundationLos Angeles, CATotal private foundation grants received, 1999-2004: $8,443,7572003 revenue/contributions: $5,672,2682003 expenses/grants distributed: $5,033,7772003 assets: $6,027,593Legislative and grassroots lobbying: $42,368

McKenzie River Gathering FoundationPortland, ORTotal private foundation grants received, 1999-2004: $107,6002003 revenue/contributions: $1,166,8832003 expenses/grants distributed: $756,4862003 assets: $4,707,555

North Star FundNew York, NYTotal private foundation grants received, 1999-2004: $238,0002003 revenue/contributions: $713,7142003 expenses/grants distributed: $800,5552003 assets: $2,682,002

San Diego Foundation for ChangeSan Diego, CATotal private foundation rants received, 1999-2004: $200,6002003 revenues/contributions: $199,2922003 expenses/grants distributed: $202,6482003 assets: $89,451

Three Rivers Community FoundationPittsburgh, PATotal private foundation grants received, 1999-2004: $50,0002003 revenue/contributions: $254,6792003 expenses/grants distributed: $87,5762003 assets: $861,103

Vanguard Public FoundationSan Francisco, CATotal private foundation grants received, 1999-2004: $3,039,9002003 revenue/contributions: $2,178,1862003 expenses/grants distributed: $3,508,6212003 assets: $1,099,015Legislative and grassroots lobbying, 2003-2004: $103,402

Wisconsin Community FundMadison, WITotal private foundation grants received, 1999-2004: $49,4692003: revenue/contributions: $382,2612003 expenses/grants distributed: $471,2872003 assets: $231,717

5April 2006

FoundationWatch

FEX sees its grant-making through the lens ofpolitics, and it tends to treat every local

and individual success as a steptoward a greater political goal.

Robin Hood Was Right describes what theseheirs can do to overcome their alienation andpromote the Left’s agenda.

The problem heirs face is mainstream foun-dation philanthropy, explains RobertBothwell of the leftist National Committeefor Responsive Philanthropy: “The availablemodels of philanthropy reniforced existingpower dynamics. Private foundations keptcontrol of the money squarely in the hands ofthe wealthy endowers, and community foun-dation boards were hardly representative oftheir counterculture constituencies, or val-ues.”

Apparently, the Funding Exchange fillsboth a political and an emotional void fordonors who are uncomfortable with theirwealth. But it’s ironic that the task of over-turning “existing power dynamics”—a taskfor politics and revolution according to theold Left—should now fall to rich heirs insearch of counterculture constituencies andvalues. Karl Marx must be turning over in hisgrave.

Consider some of the backgrounds of FEXfounders and you can see the linkage be-tween their great wealth and their politicaland social radicalism. The HaymarketPeople’s Fund, founded in 1974 in Boston, isan FEX founding member. It is named afterthe famous 1886 riots in Chicago that are acause celebre in labor union history. How-ever, its co-founder is George Pillsbury, theflour scion. His sister, Hollywood filmmakerSarah Pillsbury (she produced the film Des-perately Seeking Susan), founded the Lib-erty Hill Foundation in 1976 in Los Angeles.It is another FEX founding member. ObieBenz, another baking heir, co-founded the

Vanguard Public Foundation in 1977 beforegoing on to a movie career in screenwritingand directing. His documentary movies in-clude The History of Rock ‘n Roll: My Gen-

eration and Heavy Petting, a cultural historyof the 1950s.

Terry Odendahl, former director of theNational Network of Grantmakers, anotherorganization for so-called “progressive phi-lanthropy,” writes: “If philanthropy had abible, Robin Hood Was Right would be theprophetic book. It presents the case for themost creative philanthropy being pursuedtoday. While affirming the need for directservices, this book defines and illustrates thekind of community-based work that canchange the conditions that cause social prob-lems.” Robin Hood is hardly a philanthropist’sbible. But it is a life raft tossed to guilt-riddenheirs by the member foundations of the Fund-ing Exchange.

How The Funding Exchange Works —According to the Funding Exchange “Last year, our combined grantmakingwas nearly $15 million. As a group, we are able

to not only fund the community-basedgrassroots organizing for which we are sowell known but to mobilize our network insupport of local, national and internationalpeace and justice efforts.”

FEX sees its grant-making through thelens of politics, and it tends to treat everylocal and individual success as a step towarda greater political goal. It knows that a strat-egy of investing “political venture capital”carries risk: some projects may fail badly;others may prove irrelevant to radical poli-tics. Nonetheless, the FEX approach of urg-ing alternative community-based founda-tions to network with one another helpsensure that all the member groups are awareof each other’s successes and failings. It alsoensures that all the groups are familiar witheach other’s local activists—and their wealthypatrons. That helps spread the financial riskand the political reward. Call FEX the hedgefund of left wing philanthropy.

Many traditional community foundationsare legally bound to fund groups in their owncity, state or region. Moreover, individualsfrequently earmark their donations for spe-cific charities or for an issue area such as localeducation or healthcare. That’s not a prob-lem for FEX, which bends its rules on pur-

Sample recipients of FEX network grants in 2003:

ACORN - $74,820Worker’s Independent News Service - $77,464Shefa Fund - $272,000Families To Amend California’s Three Strikes - $48,000United for Peace and Justice - $152,000Strategic Actions for a Just Economy - $40,300Nicaraguan Solidarity - $5,750ACLU - $30,700United for a Fair Economy - $56,800Strategic Concepts in Organizing and Policy Education - $60,000Landless Workers Movement - $7,500Convergence of Movements of the Peoples of the Americas - $15,500Freedom to Marry Coalition of Massachusetts - $20,000Global Exchange - $11,500Los Angeles Alliance for a New Economy - $47,000Open Borders Project - $3,820

FoundationWatch

6 April 2006

The leaders of the “anti-war” movementtoday are leftists who oppose capitalismand believe in socialism. Many are com-munists. At root, they are anti-American

rather than anti-war. Anti-war groups havetheir own outlets for propaganda, employsophisticated tactics and exploit moderninformation technology to give their mes-

sages instant and global reach. In thisimportant new book from Capital Research

Center, international affairs expert Dr.John J. Tierney traces the leftist ideologi-cal roots of this influential movement, and

exposes its trategies and objectives.

Single copy $20Three or more only $15 each.

To order, call800-459-3950

or mail your check and order to:Capital Research Center

1513 16th Street, NWWashington, DC 20036

pose. For example, a donation earmarked for“general support” may be contributed to theNorth Star Fund (the FEX member founda-tion in New York City) but it may be divertedto the Liberty Hill Foundation (the FEX mem-ber group in Los Angeles). Each foundationmaintains an autonomous budget; however,in 2003 over $800,000 was transferred amongthe sixteen foundations. This elastic strategyappeals to political ideologues: They seeinherent “structural injustice” everywhereand want their financial resources to be asliquid as possible.

According to the most recently availableIRS Form 990, the Funding Exchange had2003 revenue of $5.1 million and some $31mil-lion in assets. It contributed $4.8 million ingrants and in-kind services to activist groupsdirectly or through “pass-through” grants toits member community foundations. Add

separate grant-making by each of the 16 indi-vidual member foundations and the total grantamount sum is about $15 million annually.

The Funding Exchange and its memberfunds are not private foundations. All have501(c)(3) status, which means that the IRSconsiders them to be “public charities” witha broad base of support. Like any publiccharity, FEX can accept tax-deductible con-tributions without publicly identifying itsdonors. Private foundations, on the otherhand, are legally mandated to publicly reporttheir contributions. Hence it is possible todiscover which private foundations are knowndonors to FEX members and to FEX itself.They include the Tides Foundation: $318,287total during years 1999-2004; Ford Founda-tion: $1,750,000 for years 1999-2004; The Cali-fornia Endowment: $2,984,439 for years 1999-2004; Turner Foundation: $225,000 for years

1999-2004; Bush Foundation:$325,000 for years 1999-2004;New York Community Trust$825,000 for years 1999-2004;The California Wellness Foun-dation $745,000 for years1999-2004; Annie E Casey Founda-tion $325,000 for years 1999-2004; Seed Fund USA $754,138for years 1999-2004; and theWilliam Penn Foundation$432,919 for years 1999-2004.

The commitment of somefoundations to the FundingExchange is extraordinary andeven shocking. For instance,the Ruth Mott Foundation (2004assets: $168 million; 2005grants: $6.5 million) was cre-ated by the wife of GeneralMotors pioneer Charles StewartMott. The foundation says it isdedicated to the arts, beautifi-cation, health promotion, andthe preservation of Mott’s his-toric estate, Applewood. RuthMott died in 1999 at age 98. Herfoundation contributed $4.6 mil-lion in general support to theFunding Exchange in 1998-2002,according to FoundationSearch.

Other foundation contribu-

tions to FEX are more explicit about theirpurpose. The Ford Foundation made a 2003grant of $450,000 to the Funding Exchangefor “projects that are designed to broadenpublic engagement on issues of U.S. foreignpolicy.” The largest subsequent FEX grantsconcerning foreign policy went to anti-warprotest groups like American Friends Ser-vice Committee and United for Peace andJustice. Also in 2003 the Ford Foundationgave half a million dollars to Liberty Hill’sprogram in “environmental justice,” an effortto link environmentalist issues to claims ofminority rights.

In 1999-2004 FEX announced grants total-ing about $34.3 million dollars to its 16 com-munity foundations. This amount does notinclude the many individual contributionsmade to each of the foundations separately.

Even corporations and their foundationsgive support to the anti-corporate agenda ofFEX foundations. For instance, in 2004 theFannie Mae Foundation sponsored the Lib-erty Hill Foundation’s annual Upton SinclairDinner where “Hollywood meets the Streets.”The Coca-Cola Company and the GeorgiaPacific Company have given undisclosedamounts to the Fund for Southern Communi-ties, Atlanta’s FEX-affiliated foundation.

FEX Donor-Advised Funds Some foundation grant-makers and indi-vidual donors channel their contributions toa specific activist group using a donor-ad-vised fund managed by the Funding Ex-change or a member foundation. This can

At a time whenliberal ideas are

unpopular amongvoters, the FEX model

of “progressivephilanthropy” offers a

promising strategyfor achieving

social change.

7April 2006

FoundationWatch

You can probe thebackgrounds of many of the

organizations profiled in

Foundation Watchby visiting our

online database at

www.capitalresearch.org

You can also retrieve past issuesof CRC newsletters, including

Organization TrendsFoundation Watch

Labor WatchCompassion and Culture

Past issues may be ordered for$2.50 each. Orders must be prepaid.For information or credit card orders,

call (800) 459-3950. Or mail your check to:

Capital Research Center,1513 16th Street, N.W.

Washington, D.C. 20036

The work of the

Capital Research Center

continues solely through

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contributors.

Please remember

Capital Research Center

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planning. Thank you for

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Terrence Scanlon, President

allow donors to remain anonymous to thegroup receiving their contributions. FEX hasthree major in-house “activist advised funds”that can “launder” donor dollars in this wayand direct them to little-known organizationsthat foundation activists recommend. Theirnames are the Saguaro Fund, the OUT Fundfor Lesbian and Gay Liberation, and the PaulRobeson Fund for Independent Media.

The mission of the Saguaro Fund is to“support organizations that serve communi-ties of color.” It has funded the radical hous-ing and labor activists at ACORN (Associa-tion of Community Organizations for ReformNow), the anti-free trade protesters whomarch under the banners of the group GlobalExchange, and United for Peace and Justice,the coalition group opposed to the Iraq war,which is led by Fidel Castro apologist LeslieCagan. In 2004 Saguaro made twenty-twogrants totaling $211,000, including $8000 tothe Arab American Justice Project in NewYork City (for legal defense and advocacy),$12,000 to Sunflower Community Action inWichita, Kansas (to secure drivers licensesand insurance for immigrants), and $10,000 tothe Atlanta-based Project South: Institutefor the Elimination of Poverty and Genocide.

The OUT Fund for Lesbian and Gay Lib-eration supports organizations and projects“that address the politics of race, class, gen-der and sexuality as integral to systems ofoppression.” In 2004, it contributed $184,000to fifteen organizations. Grant amounts rangedfrom $5000 to African Ancestral LesbiansUnited for Social Change for organizing andworkshops in New York City to $20,000 to theSylvia Rivera Law Project for a “trans-genderyouth organizing initiative.” The late SylviaRivera was a trans person and an activist fortransgender advocacy. The grants also in-clude $10,000 to Al-Fatiha, an advocacygroup for “Muslims who are lesbian, gay,bisexual, transgender, intersex, questioning,those exploring their sexual orientation orgender identity, and their allies, families andfriends.” Writing in David Horowitz’s FrontPage web magazine, Richard Rosendall de-scribes this group as another “advocate ofsocial-justice utopianism so reluctant to ac-knowledge the West’s mere progress…thatthey end up embracing non-Western en-emies of social justice.”

The Paul Robeson Fund for IndependentMedia supports film, video, radio, and Internetprojects, and it is named to honor the notedAfrican American singer and actor who wasa vocal supporter of the Soviet Union and arecipient of the 1953 Stalin Peace Prize. Thefund has made grants to support a series ofsix radio programs entitled “Dreaming Revo-lution” produced by the League of Revolu-tionaries for a New America and available atwww.radio4all.net. Other grantees includeThird World Newsreel, a network of radicaldocumentary filmmakers (www.twn.org) andthe Independent Media Center(www.indymedia.org), a network of alterna-tive news groups. Also receiving RobesonFund support is Free Speech Radio, a newsservice created by disgruntled former report-ers who were fired from or quit the radicalPacifica radio network. The reporterslaunched a strike against Pacifica in 1999-2000 after its chairman, the notorious MaryFrances Berry, then chairman of the U.S.Commission on Civil Rights, tried to cut costsand increase the network’s listenership. Berryhired a more race- and gender-diverse staffand fired what she called the “white malehippies over 50.”

FEX administers several other in-housedonor-advised funds, including the FordSocial Justice Philanthropy Fund, which issupported by grants from the Ford Founda-tion. Ford also founded the FEX Media Jus-tice fund, “supporting grassroots advocacyfor socially responsible communicationpolicy.” That means activists claiming tospeak for low-income minorities get Fordmoney to require that media companies suchas Comcast comply with their demands ifthey want to keep their local cable franchise.Most donor-advised grants are first passedthrough community foundation members.FEX administers other small donor-advisedfunds, as do the community foundations.

At a time when liberal ideas are unpopularamong voters the FEX model of “progressivephilanthropy” offers a promising strategy forachieving social change. Instead of mobiliz-ing the masses, radical activists appeal to thewealthiest among us. For over two decadesthe Funding Exchange has linked a flexibleand enterprising “venture capitalist” ap-proach to philanthropy to radical social goals,and it has tied local activism to national

FW

politics. The total amount of grant moneypassing through the FEX network is com-paratively small, but its potential impact onpolitics is great.

James Dellinger is Research Associate atCapital Research Center

FoundationWatch

8 April 2006

We note with sorrow the recent death of Michael Joyce, a leader in the movement to restore a mission of faith,service and accountability to American philanthropy. As the former executive director of the John M. OlinFoundation (1979-1985) and president of the Lynde and Harry Bradley Foundation (1985-2000), Mike Joycesupported a range of policy ideas, including school choice, tax and welfare reform, neighborhood empowermentand faith-based social policy. Just as importantly, he understood the importance of building nonprofit institutionsto affect public policy over the long term. Think-tanks, public interest law firms, groups supporting writers andscholars, outreach programs to the media, attorneys, women, and college students, all owe a debt of gratitudeto Michael Joyce, who helped create and sustain the conservative movement.

Last month President Bush again urged corporations to support faith-based organizations. A recent WhiteHouse survey of 20 major corporations found they gave only 6 percent of their grants to religious groups.Some ban religious giving altogether. By comparison the Bush Administration reports that it gave 2,760 socialservice grants worth $2.1 billion to religious groups in 2005, a seven percent increase in dollars over 2004. SaidBush, “It used to be that groups were prohibited from receiving any federal funding whatsoever because theyhad a cross or a star or a crescent on the wall,” he said. “And that’s changed for the better. It’s changed forthose who hurt in our society.”

The National Legal and Policy Center (NLPC) has filed shareholder resolutions with four companies—Boeing, Citigroup, Coca Cola, and PepsiCo—to require them to identify and explain their charitable contribu-tions. The companies have funded nonprofit groups such as Jesse Jackson’s Rainbow/PUSH and the Mexi-can American Legal Defense and Educational Fund, says NLPC president Peter Flaherty, and sharehold-ers have a right to know management’s reasons for making these grants. Three of the four companies agreedto put the issue to a vote at annual shareholder meetings this spring. PepsiCo asked the Securites andExchange Commission for permission to omit the resolution from the proxy statement sent to shareholders.The SEC denied the request.

General Electric was also on the end of an adverse SEC ruling. In January of this year the SEC denied GE’sattempt to exclude a resolution from its shareholders meeting requesting the company “to report to sharehold-ers on the scientific and economic analyses relevant to GE’s climate change policy.” The resolution was filed byThomas Borelli of the Free Enterprise Action Fund (http://www.freeenterpriseactionfund.com/). Said Borellion the SEC ruling, “Now GE shareholders will have the opportunity to request that GE justify its global warmingpolicy in scientific and economic terms.”

A new study by the Foundation Center found that foundation giving rose 8.1 percent in 2004, following twoyears of decline. Of the 1,172 foundations surveyed, total giving rose to $15.5 billion and the average grantincreased from $118,649 to $122,355. The two areas that saw the biggest increases were science andtechnology (31.2 percent), and health (23 percent). The two areas with the biggest decline were environ-ment and animals, and human services. They saw declines in giving of 8.1 percent and 3.8 percent,respectively.

Dr. Larry Brilliant has been appointed executive director of Google’s philanthropic arm, Google.org. A self-described “dead head”, Brilliant will oversee the $1 billion in giving that Google.org has pledged over the next20 years for fighting global poverty, and energy and environmental problems. In the 1970s he worked with theWorld Health Organization’s campaign to eradicate smallpox. Since then he has held numerous posts in theacademic, nonprofit, and commercial worlds.

PhilanthropyNotes