August 2004

Many grantmakers struggle with the question of how they can best focus and maximize the impact of their grantmaking. Although this struggle exists throughout the foundation community, it is especially true among small foundations, which are often limited in both time and resources. Should these resource challenges, however, constrict a foundation's ability to work within specific fields of interest, or within specific communities? We at First Nations Development Institute would answer "no."

One recent example is our funding partnership with Kalliopeia Foundation. In June 2002, the foundation established the Native Youth and Culture Fund within the grantmaking program of First Nations. By its nature and its mission, Kalliopeia Foundation works to help cultivate a way of living informed through the life of the spirit, by creating or supporting programs that honor the dignity and nurture the creativity and spiritual potential that exist within each human being. Native American communities traditionally have had a holistic approach to human spirituality that often links their day-to-day engagement of the natural world to individual spirituality—so the mission of Kalliopeia Foundation was one that resonated well with us.

In just ten months' time, through this collaborative fund, First Nations has been able to distribute $160,000 in grants to programs that are strengthening Native youth through the preservation and protection of cultural values and spirituality. One example is a grant to the Native Village of Barrow (Tribe) in Barrow, Alaska—a small Inupiat fishing village. The Barrow people, who fish, harvest, and hunt for subsistence, used their grant to develop a traditional knowledge-based youth program on safe practices for subsistence harvesting and the time-honored traditional building of skin boats and crafting hunting tools and implements.

Many positive outcomes have come from our partnership with Kalliopeia Foundation. First, Kalliopeia Foundation, utilizing First Nations' knowledge of Native communities and proven grantmaking, was able to place much-needed resources in an isolated Native community. Second, the people of the Village of Barrow were able to tap into a new stream of resources that enabled them to reinforce traditional Inupiat spirituality. Finally, First Nations was able to pursue its mission by helping the Barrow Village community get a step closer toward regaining and controlling key assets within their community—culture and spirituality.

The grants are just one benefit, though. In the months ahead, many of the grantees of the Native Youth and Culture Fund will benefit from much-needed technical assistance and training provided by First Nations staff, and Kalliopeia Foundation will benefit further as they participate in cooperative site visits to learn more about the projects firsthand. For us, this learning is key as we seek to build a broader understanding of Indian Country in hopes that the number of foundations working directly within Native communities will grow significantly in the years ahead.

If you have been considering making a grant to a tribe or tribal enterprise, or would simply like more information about how to fund within Indian Country, please contact First Nations at (540) 371-5615 or visit.

How Can Foundations Give to Tribes?

Foundations can give money directly to tribes under the following circumstances in order to maintain the tax deductibility of the donation:

• when a tribal government has been recognized by the Interior Department and the IRS, a foundation can give a donation directly to the tribal government and the donation is tax deductible. In other words, donations to federally recognized tribes are tax deductible. The IRS treats this donation as a "qualifying distribution," not a "taxable expenditure";
• the money given to the tribal government must be used for public purposes. The tribal government should set up a restricted fund to make sure the money is used for public purposes;
• in some cases, a tribe can set up a political subdivision or have an integral part of the tribal government handle grants. To qualify for tax deductibility, however, the subsidiary must be directly under the control of a federally recognized tribal governmental control; and
• a foundation can request reporting and accountability for funding expenditures and can request an outside audit.

Reference: IRS, Indian Tribal Governmental Tax Status Act, 1982, Section 7871 of the Internal Revenue Code

Joseph Getch and Raymond Orr, First Nations Development Institute
© 2004, Joe Getch and Raymond Orr

Joseph Getch is the chief development officer of the First Nations Development Institute in Fredericksburg, Va. Raymond Orr is a freelance writer.