The invisible funding crisis: Indigenous communities receive 0.4% of philanthropic dollars

Education: An Annual Gap of $250 Million?

There is a huge funding gap for Tribal Colleges and Universities (TCUs), which is making a significant impact on the future of Native students. TCUs typically receive only $5,850 per student, when the federal law allows for $8,000—Howard University receives $20,000 per student nearly 3.5 times the funding of TCUs.

To keep students in the education pipeline, TCUs write off an average of $100,000 annually in unpaid tuition due to chronically underfunding. The impact however does not stop there, 69% of Native students attend schools where the majority of students qualify for free or reduced lunch, only 8% of white students qualify.

The funding disparities have limited TCUs ability to build out curriculum to support regional economic opportunities, further perpetuating cycles of poverty in Native communities with 25.4% of Native Americans living below the poverty line, the highest rate of all demographic groups in the U.S.

Find out how you can support Native education at American Indian College Fund

Health: Lives Lost to Underfunding

The crisis of health funding disparities is arguably the most alarming disparity. The Indian Health Services has a need of $51.4 billion, but only has $7-8 billion budget, which means a 700% increase in order to meet basic health services.

The scope of this underfunding results in fatal consequences. Native Americans are living 5.5 years less than total U.S. population life expectancy and experienced COVID-19 case rates of 3.5 times more than non-Hispanic white people. While over 71% of Native Americans live in urban settings, only 1% of Indian Health Service (IHS) appropriated funding is available for urban Indian health programs, which has not changed since 1979.

Globally, the picture is similar. Indigenous peoples comprise 6.2% of the global population, however they make up 18.2% of people living under extreme poverty globally, with life expectancy as low as 20 years shorter than the rest of the population.

Cultural Preservation: Languages on the Run

The status of Native languages in North America is dire; there are only 170 left (down from over 340), and all but 20 of them are critically endangered. Total annual funding for Native language efforts is approximately $10 million a total that is pale compared to the $16.7 billion over 10 years identified in Biden’s National Plan. Even garnering a significant portion of that $16.7 billion will be a monumental task. The Esther Martinez grants are the main source of funding, and they only provided $12.9 million total since inception. Experts predict these languages will be extinct by 2050 without intervention represents an irreplaceable loss of human heritage and traditional knowledge systems.

Support the Native language revitalization efforts led by First Nations Development Institute

Economic Development: Capital Deserts in Indian Country

86% of Native communities have no financial institution (credit union or bank) within their boundaries, and only 57 Native Community Development Financial Institutions (CDFI) exist in the country. Since inception, Native CDFIs have received only $220 million total in federal financial assistance.

Economic indicators tell a stark story: Native American unemployment is 6.1% vs 3.3% for whites; median household income is $43,825 vs $68,785 for white non-Hispanic households, limited access to capital along with infrastructure deficits including the fact that 28% of tribal lands lack high-speed internet presents nearly impossible barriers to economic progress.

The Barriers: Why Do Disparities Continue?

Understanding why these funding gaps persist requires an understanding of systemic barriers that limit indigenous non-profits from obtaining sufficient resources.

Harmful Stereotypes and Invisible

Foundation decision-makers are no less free of societal misconceptions about Native communities than the general population. There is the overwhelming perception that “casino money” means Native communities do not need philanthropy, and there is the perception that Indigenous organizations are “not trustworthy” with funding.

Those harms are expanded by invisibility. Indigenous people’s representation in media ranges from 0 to .04 percent. If 90% of K-12 schools are not teaching about Native American life past 1900, then it is not surprising that people making donations do not spend time paying attention to Native people’s needs and capabilities.

Complex Regulatory Barriers

The IRS status of Section 7871 that allows tribal governments to be treated as states by receiving tax deductible donations is confusing for potential donors and limits funding opportunities for tribal entities. Many corporate policies do not support tribal (government) entities with Section 7871 status, so organizations must use an intermediary or set up a separate nonprofit or organization entirely.

Misaligned Funding Processes

Comparison of grant funding applications reflects emphasis on segmented data analysis compared to Indigenous holistic storytelling. The requirement for matching funds, a preference for a short-term project compared to a long-term committed relationship, and outcome measurements that are not aligned with the community framework for measuring success place Indigenous non-profits at a structural disadvantage.

Signs of Change: Success Stories Illuminate the Path Ahead

While these realities are important to acknowledge, there are innovative practices that indicate the potential for change when barriers are taken down and trust is offered.

The Catalytic Impact of MacKenzie Scott

MacKenzie Scott’s $132.5 million distributed to 37 Native nonprofit organizations over a four-year timeframe is just 0.8% of her overall charitable donations, but the systems changes engendered by this philanthropy and its implications are far-reaching. By offering unrestricted, nothing-attached funding to these organizations, Scott also created what can best be described as a “seal of approval” with each award, which recipients could use to leverage additional corporate relationship building and partnerships for the implementation of their ideas.

Of the 132.5m, more than $103 million is authorized to go to Native CDFI’s, which show evidence of effectiveness with consistently low levels of delinquency while serving populations ignored by mainstream financial organizations.

Indigenous-Led Funds are Gaining Traction

Indigenous Led Funds are unique in that they are governed by Indigenous worldviews, are managed by Indigenous people, and serve Indigenous peoples, all of which builds self-determined, power shifting, and paradigm changing practices in communities. Indigenous-Led Funds are designed to operate in ways that allow for the unique complexity and nuance of Indigenous issues, ensuring holistic and culturally appropriate support.

Hill (2021) noted that the convening of the Global Alliance of Indigenous Led Funds is an important step in the journey toward supporting Indigenous Peoples self-determination, and at the same time, those foundations continue to be challenged to change their practice, but consider whether this will bound mainstream or philanthropic organizations to a community-centered practice?The challenges are systemic and adopting significant changes will take time.Reliance on traditional funding relationships may take time to change.

Digital Innovations Extend ReachLike organizations such as DIGDEEP, that have grown through digital fundraising like Facebook and integrated into Facebook, they raised in excess of $190,000 from $64,805 in 2019, while First Nations Development Institute’s Native Fundraisers Community of Practice has made fundraising “less overwhelming” upon contextualizing it in the ways Native people do community economic development while building and practicing skills.

Global Context: Global funding challenges for Indigenous Peoples

The “funding deficit” is not solely ontological in North America. Indigenous peoples around the world hold or manage tenure rights over an estimated 25% of earth’s surface area and more than half of the planet’s remaining intact forests, yet they endure systemic poverty and marginalization from resources beyond logging.

The Indigenous Peoples Assistance Facility (IPAF) provides small grants to Indigenous communities across the globe to strengthen Indigenous peoples and kinfolk, through Indigenous self-sufficient development project funding. The UN Voluntary Fund for Indigenous Peoples, which provides begrudgingly funded support for Indigenous representatives to appreciate opportunities to participate in Jean Michel’s UN mechanisms for climate mitigation and support, is being severely underfunded compared to the demand

In Australia, and the Pacific Islands, the Indigenous Advancement Strategy funding provides funding for projects that seek to improve educational outcomes, employment opportunities for participants/residents, and overall wellbeing in communities, while funding offered by the Pacific Islands Forum Secretariat is geared at climate resilience initiatives. While registering there is great injustice felt globally as Indigenous communities are systematically excluded from mainstream philanthropic funding, in both climate resiliency, mitigation, and sustainability, resources funding however never in land development nor economic development.

Professional Recommendations: Paths to Equity

Indigenous leaders, researchers, and progressive funders provide three pathways for addressing these funding disparities:

Trust-Based Philanthropy Works

The best funders provide unrestricted, multi-year funding for Indigenous communities to prioritize community needs. The Robert Wood Johnson Foundation believes that success lies in “first to understand. then to be understood.”

Structural changes include onboarding Indigenous board members and senior staff, of which only 0.7-0.8% of philanthropy professionals identify as Indigenous. Organizations should acknowledge potential tribal governance structures in their application processes and fund Indigenous data sovereignty efforts.

Corporate Investments See Promise

Shifting from awareness campaigns and inexpensive sponsorships to investment is a true partnership. This opens up corporate assets, including expertise, networks, and platforms, to allow companies amplify Indigenous voices while showing respect for self-determination.

Policy Changes Remove Barriers

Making grant applications less prescriptive and matching frameworks to tribal governance structures, addressing the complexity of IRS 7871 status and implementing the $16.7 billion National Plan for Native Language Revitalization that has significant systemic improvements, increasing direct appropriations to eliminate pressure on organizational capacity to submit competitive grants.

The Time is Now

The data proves an unconscionable reality; although Indigenous peoples are the first peoples of this land and manage the greatest volume of critical global resources, they are funded at one-fifth the population representation. This is more than a moral failure; its a major strategic failure that only ever limits solutions to our most urgent issues. When adequately funded, Indigenous-led organizations are able to create incredible impacts – the First Nations Development Institute had a 4-star Charity Navigator rating while distributing $85 million through 3,473 grants. Native Community Development Financial Institutions (CDFIs) have incredibly low delinquency rates. Tribal colleges graduate students who go on to transform communities.

The question is not if Indigenous nonprofits can successfully allocate this additional funding – they have time and time again proven they can. The question remains will American philanthropy, corporations, and government finally realize that funding Indigenous communities is not an act of charity; it is justice, and it is a smart strategy.

What You Can Do

Every reader has a stake in addressing these disparities. Below are recommendations for how to act based on your individual role and abilities:

As an Individual Donor

• Reallocate giving to Indigenous-led organizations: Research and give to Native nonprofits working on your topic of interest
• Support Indigenous-led funds: Provide support to intermediary funds like the Keepers of the Earth Fund or Native Americans in Philanthropy
• Make unrestricted gifts: Give general operating support instead of project support when it makes sense
• Educate yourself: Familiarize yourself with present-day Indigenous issues and understand the legacy of colonization

Start here: Charity Navigator’s Giveaway to Native-led nonprofits

For Business Leaders

• Develop Indigenous funding streams: Develop ongoing partnerships, rather than making one-time investments.
• Utilize non-financial assets: Offer expertise, networks, platforms, and professional services.
• Develop accommodation for tribal entities: Not all organizations are the same; if your policies reflect IRS status 7871, make the adjustments.
• Build an authentic partnership: Engage in genuine and long-term relationships, beyond transactional giving.

Resource: How Corporations Can Support Indigenous Communities – Giving Compass

For Foundation and Nonprofit Leaders

• Recruit Indigenous board members and staff: Consider aiming for representative inclusion of the communities you serve.
• Change application processes: Accommodate tribal governance processes and timelines for Indigenous decision-making.
• Provide capacity building: Support the organization in potential along side the programmatic grant.
• Support trust-based philanthropy: Provide multi-year funding with as few strings as possible with reporting.

Learn more: PEAK Grantmaking’s Indigenous Philanthropy Resources

For Community Members and Allies

• Engage others within your networks: Challenge stereotypes and advocate for Indigenous participation in your place of work and community organizations.
• Support Indigenous businesses: Prioritize purchasing from Native-owned businesses and social enterprises, wherever possible.
• Boost Indigenous voices: Share Indigenous-led stories or updates on social media.
• Vote for decisions that support Indigenous participation: Where possible, vote for candidates and decisions that support Indigenous Rights and Indigenous Funding.

For Policymakers

• Fully fund commitments made by federal bodies: Deliver promised funding for tribal colleges, Indian Health Service and funding for language preservation.
• Streamline or eliminate regulatory challenges: Look for solutions to address IRS 7871 challenges and to simplify trinkle applications for tribal entities.
• Increase direct appropriations: Move to decrease reliance on competitive grants, which can harm organization capacity.
• Implement the plan: Fully fund the $ 16.7 billion National Plan for Native Language Revitalization.

The other option—continuing to fail to provide Indigenous communities with the necessary resources—perpetuates injustice and wastes the potential contributions those communities would make with appropriate resources. As one Indigenous leader put it, “Change will only occur when we recognize, firstly, that there is a significant data gap related to Native Americans, thereby rendering them almost invisible in a disproportionately data-driven philanthropic world.”

That invisibility will cease when each of us does something. The time for acknowledgment without doing has come to an end. Indigenous communities have waited long enough.

This article is drawn from exhaustive research including data from Candid, First Nations Development Institute, Native Americans in Philanthropy and other leading experts on funding disparities for Indigenous communities. For full source citations and additional resources, please see Candid’s Native Philanthropy hub.