They target well-meaning Americans with direct mail and telephone
calls describing conditions of poverty, hunger and despair in Indian
country. Inevitably, the pitch ends with a plea for potential donors
to open their hearts and wallets to a charity or relief organization
that claims to address these dire conditions. But donors should
be wary of a growing number of charities that purport to alleviate
poverty in American Indian communities but instead use donated funds
to stuff their own coffers.
"There are many, many non-Indian operations that use Indians as
a way of garnering revenue," says Jerry Reynolds of the First Nations
Development Institute, a Fredericksburg, Virginia-based nonprofit.
The number of Indian-themed charities has been increasing steadily
over the past 10 years, and the money has been flowing to non-Indian
organizations in record amounts.
Charitable organizations are latching on to Native American causes
because they are an
easy sell. Americans feel guilty about their nation's treatment of
Native peoples, and they give money with the intention of correcting
history's wrongdoings, says Daniel Borochoff, president of the American
Institute of Philanthropy. "These charities exploit the tremendous
reservoir of goodwill that exists worldwide for Indian people," agrees
Vernon Bellecourt, an American Indian Movement leader.
The location of reservations in America's rural outposts keeps
shoddy charity programs hidden from scrutiny. "There are so many
needs out there that it leaves the door open for opportunistic ventures.
There's a lack of oversight from the funding agencies to see if
these groups are legitimately serving native communities," says
Donna Chavis, executive director of Native Americans in Philanthropy,
a North Carolina-based advocacy group.
American Indian communities are among the nation's poorest, so
donated goods and services are usually welcomed regardless of how
they are obtained. "People aren't knowledgeable about the full amount
that's being raised. It's real difficult when you're dealing with
any kind of poverty stricken area; any kind of assistance is looked
at as very beneficial," explains Ken LeDeaux, a former business
manager for the Rosebud Sioux tribe who says he keeps a close eye
on charity activities in the area. Shady operations also may proliferate
because government oversight of charities is sorely lacking. The
Supreme Court has forbidden states from setting limits on what percentage
of a charity's contributions must be spent on programs, and the
majority of charities have gross receipts of less than $25,000--making
them exempt from releasing their tax information to the public.
For that reason, the inner-workings of two-thirds of American charities
remain a mystery.
One rogue charity, the Rapid City, South Dakota-based American
Indian Relief Council (AIRC), gained notoriety in the early '90s
when it was accused of dumping useless textbooks and outdated gardening
seeds on the Sioux reservation as part of its relief program. One
of the AIRC's largest services was its employment-training program,
which consisted of hiring Native Americans to make fundraising calls.
Employees blew the whistle on the organization's dubious fundraising
pitches, which they said were manipulative exaggerations and lies.
They complained that the money the AIRC raised for Native Americans
wasn't making it to the reservations.
Eventually the Pennsylvania Attorney General's office sued the
AIRC in 1993 for lying to donors about certain reservations, claiming
they were hit by catastrophic natural disasters and needed funds
to prevent famine and death. The lawsuit also charged that the AIRC
overvalued the prices of goods it donated to tribes--like the expired
seeds--listing them at market value. In 1999, AIRC President Brian
Brown settled the lawsuit and agreed to pay the state $350,000.
But instead of shutting down the AIRC, Brown--who had previously
been sued by the attorneys general of Connecticut and Pennsylvania
in 1991 for inflating commodity values and deceiving donors--discreetly
downsized the group's South Dakota operations and shifted its focus
to the American Southwest. The AIRC has been born anew under a different
parent organization, National Relief Charities (NRC), which operates
two new subsidiaries--the Council of Indian Nations and Southwest
Indian Relief--in Apache Junction, Arizona. Brown keeps a low profile
in his current office, tucked away in a nondescript industrial park
outside of Portland, Oregon.
However, the charity's makeover is entirely superficial. The NRC
is still distributing a pitiful portion of its revenues to the constituency
it purports to serve. According to the NRC's 1999 federal tax filings,
it earned more than $8.3 million in donations last year, but only
30 percent was spent on programs. In contrast, Brown's salary has
hovered at about $120,000 for the past two years. The National Charities
Information Bureau, an Arlington, Virginia-based watchdog group,
suggests charities should spend a minimum of 60 percent of total
expenditures on programs and services, with the available balance
going to fundraising and administration.