Tag Archives: Native American

First Nations Development Institute Releases Research Report On 7871 Organizations

First Nations Development Institute recently completed a research project on 7871 charitable organizations, their institutional structures, and best practices for their management. This research resulted in a report titled Charitable and Sovereign: Understanding Tribal 7871 Organizations.

In 1982, Congress passed the Indian Tribal Governmental Tax Status Act, codified as Section 7871 of the Internal Revenue Code, treating tribal governments as state governments for a variety of specified tax purposes. One of these purposes was to allow tribal governments and their programs to receive tax-deductible donations. Many tribes have used the 7871 tax code to develop tribal charitable and philanthropic organizations. These organizations include educational scholarship programs, economic development organizations, and grant making foundations.

First Nations’ research revealed that while there are a large number of these so called “7871 organizations” that provide social service, economic development, educational, and other charitable programming, only a small number of them are actively raising external funds. Most such programs are funded by tribal governments or federal funding streams. However, as tribes look to diversify both their programs and funding streams, an increasing number of tribal programs are using Section 7871 to facilitate fundraising as charitable organizations. Use of the Section 7871 designation to create philanthropic and charitable entities is increasingly popular as tribes seek ways to protect their sovereignty while still promoting philanthropic activities.

The report had the following additional key findings:

1. There is great programmatic and organizational diversity among 7871 organizations.
2. There are significant barriers to fundraising for 7871 organizations.
3. The myth of “rich gaming tribes” persists as a barrier to fundraising for 7871 organizations.
4. Federal legislation is inconsistent in its treatment of 7871 organizations and their eligibility for federal grant programs.
5. There are a large number of tribes that have spun off 501(c)(3) organizations to remove barriers to fundraising.
6. There is a need to establish best practices to reassure prospective donors to 7871 organizations.

“We hope this report will raise awareness about the important role that 7871 organizations play in providing services to tribal members,” stated Michael E. Roberts, President of First Nations Development Institute. “There is still a lot of confusion about what these organizations are and what they do. We hope this report will clarify many issues.” One goal of the report is to educate program officers at foundations so they are more comfortable working with 7871 organizations. “We hope to educate members of mainstream philanthropy on this topic,” stated Sarah Vermillion, Vice President for First Nations Development Institute.

First Nations’ research included a national survey and case studies and interviews with five active or former 7871 organizations. This research was funded by the Cultures of Giving Fund, established at the Rockefeller Philanthropy Advisors with major support from the W.K. Kellogg Foundation.

To download a free copy of this report, visit our website at www.firstnations.org and follow the links from the home page.

For more than 28 years, using a three-pronged strategy of Educating Grassroots Practitioners, Advocating for Systemic Change, Capitalizing Indian Communities, First Nations Development Institute has been working to restore Native American control and culturally-compatible stewardship of the assets they own – be they land, human potential, cultural heritage, or natural resources – and to establish new assets for ensuring the long-term vitality of Native communities. First Nations serves rural and reservation-based Native American communities throughout the United States.

Via EPR Network
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First Nations Launches Native Asset Building Partnership Project

First Nations Development Institute (First Nations) released the names of the advisory committee members for its new Native Asset-Building Partnership. Members include Anita Fineday, Chief Judge of the White Earth Tribal Nation; Tadd Johnson, Special Counsel for Government Affairs for the Mille Lacs Band of Ojibwe; Susan White, Director of the Oneida Trust Department; former Senior Vice President and board member of First Nations, Sherry Salway Black; Elsie Meeks, Director of the USDA Rural Development Office; attorney Margaret Schaff, partner at Schaff & Clark-Deschene; Tracy Fischer, Interim President of the First Nations Oweesta Cooperation; and Michael E. Roberts, President of First Nations Development Institute.

The goal of the Native Asset-Building Partnership Project is to strengthen tribal and Native institutions in Minnesota, Wisconsin and North Dakota through tribal nation-to-nation peer learning and model development that will lead to improved control and management of assets for the benefit of Native communities and individuals. Advisory committee member Susan White said, “Peer mentoring will provide ideas and processes on how Indians as the true stakeholders can gain greater control over their own assets. Applying mentoring objectives will elevate a tribe’s ability to be more self-determined and therefore gain greater control over their own assets.”

First Nations’ goal is to partner tribes around specified assets and allow them to share best practices for asset stewardship and management. “Through this project we will be able to continue to ask questions from our brothers and sisters at other tribal nations and create long-term enduring benefit to Indian Country,” notes advisory committee member Anita Fineday who is Chief Judge of the White Earth Tribal Nation located in White Earth, Minnesota.

Sherry Salway Black said “assets are incredibly important for individuals, families, communities, and nations – including tribal nations. The ownership, control, management and development of current assets and creation and acquisition of new assets taken together are wealth and assure a better future.”

The Native Asset-Building Project advisory committee is composed of national and regional leaders familiar with asset-building in Native American communities. “First Nations is grateful to have the participation of such well respected national and regional leaders in Indian Country,” said Michael E. Roberts. The project advisory committee will assist in engaging tribes and Native organizations in the targeted states to determine asset-building needs and regionally-relevant models and assist in the planning and hosting of an asset-building conference that will take place in Minneapolis, Minnesota this fall.

The Native American Asset Building Project is a two-year project funded by the Otto Bremer Foundation, based in Saint Paul, Minnesota. For more information about First Nations’ Native Asset Building Project, contact Raymond Foxworth, Research Officer for First Nations at 303-774-7836 or rfoxworth@firstnations.org.

About First Nations Development Institute
Founded in 1980, First Nations Development Institute is a national Native American-led nonprofit organization. Through a three-pronged strategy of Educating Grassroots Practitioners, Advocating for Systemic Change, and Capitalizing Indian Communities, First Nations Development Institute is working to restore Native control and culturally-compatible stewardship of the assets they own – be they land, human potential, cultural heritage, or natural resources – and to establish new assets for ensuring the long-term vitality of Native communities. To learn more about First Nations, visit: www.firstnations.org.

Via EPR Network
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Refund Anticipation Loans Cost EITC Filers In Native Communities Over $9,100,000 In 2005

Tax day has come and gone, and this year many people opted to get their tax refund a quick but expensive way: they took out a Refund Anticipation Loan. A Refund Anticipation Loan (or RAL) is a one to two week loan made by banks on behalf of filers, facilitated by tax preparers, and secured by a taxpayer’s expected tax refund. RALs are marketed as a way to “get your money quickly” and result in the users paying substantial fees to access their tax refund usually only five to ten days faster than for tax returns filed electronically. The average expense of the one to two week loan can be the equivalent of 50 to 500 percent APR, depending on the total fee and loan term. According to a report just released by First Nations Development Institute and the Center for Responsible Lending, Refund Anticipation Loans drained over $9,100,000 from Native American communities in 2005.

First Nations Development Institute and the Center for Responsible Lending’s report Borrowed Time: Use of Refund Anticipation Loans Among EITC Filers in Native American Communities documents the use of these costly loan programs on reservations and in other Native American communities. Researchers looked at the use of Refund Anticipation Loans in ten states with high Native American populations, and found that residents in counties with a large Native American population (such as counties with reservations in their boundaries) were more likely to take out Refund Anticipation Loans than residents of other counties. This is true despite the remote rural location of many of these counties, where there are few tax preparation businesses. In South Dakota, residents of counties with a high Native American population are five times as likely to take out a Refund Anticipation Loan. In North Dakota, residents of counties with a high Native American population are 11 times as likely to take out a Refund Anticipation Loan.

Most striking is the fact that the use of RALs is quite high among tax filers receiving the Earned Income Tax Credit in Native communities. The Earned Income Tax Credit was originally designed to supplement the earnings of low-to-moderate income families, and in 2009 a family of four could qualify for up to $4,824 in tax credits. Borrowed Time: Use of Refund Anticipation Loans Among EITC Filers in Native American Communities documents that in some Native communities, over seven out of every ten EITC filers received a RAL. In one county in South Dakota, nine out of every ten EITC filers received a RAL. In South Dakota, 8% of every EITC credit in Native communities was spent on taking out a RAL. This means that eight cents of every $1.00 of EITC credit in Native communities was diverted from its original target, working families, and instead went into the pockets of paid tax preparers.

Because Refund Anticipation Loans have a significant cost for Native communities, Borrowed Time: Use of Refund Anticipation Loans Among EITC Filers in Native American Communities provides recommendations for reducing their use. The first recommendation is to increase and support Volunteer Income Tax Assistance (VITA) sites in and near Native communities to allow filers to access free tax preparation services. In many cases, EITC filers and other filers may simply not be aware that they can access their tax refund without using a RAL. The authors of the report also recommend establishing an interest rate cap for RALs, and conducting public education campaigns in Native communities to encourage people to avoid paying high fees for RALs.

This landmark report is the result of a research study conducted under a grant funded by the Annie E. Casey Foundation. For more information about this publication, contact Sarah Dewees, Director of Research for First Nations Development Institute, at 540-907-6247 / sdewees@firstnations.org; or visit First Nations Development Institute’s website at www.firstnations.org to download a free copy of the paper.

Through a three-pronged strategy of Educating Grassroots Practitioners, Advocating Systemic Change, and Capitalizing Indian Communities, First Nations is working to restore Native control and culturally-compatible stewardship of the assets they own – be they land, human potential, cultural heritage, or natural resources – and to establish new assets for ensuring the long-term vitality of Native communities.

Via EPR Network
More Non Profit press releases