Yeah, sell directly to someone who needs it. Don't sell it on Craigslist, you'll be lucky to get $5 a spool and it will take forever to sell all of them. Also, you'll do better selling it as a lot than individually. If you sell it individually, people will come out and cherry pick the good fabric leaving you with rolls you'll never sell.
Also, you might consider keeping some of it. It seems like every couple of months I get some dining chairs with stains all over them. Recovering them is easy and essentially free if you already have the fabric. Not only that, you can market the chairs as reupholstered and get a little extra for them.