Finances With Wolves

Telemarketers rake in millions of dollars by telling donors they're helping Native Americans. But the biggest beneficiary by far is the charity itself.

Difficult, but not impossible.
National Relief Charities' Form 990s and other public filings are replete with damning data. In its 1995 filing, the charity told the IRS that it paid its attorneys almost twice as much--$171,866--as the $96,390 it granted to the needy and those who serve the needy.

National Relief Charities' fund-raising expenses accounted for two thirds of its 1995 budget, far more than the 25 percent recommended by NCIB guidelines. The charity also said it spent 16 percent on "program services," a figure that appears exaggerated.

Brian Brown claimed in his charity's 1995 tax filings to have a salary of $96,000, though a former top lieutenant says Brown told him he pocketed $300,000 last year.

In March 1995, the South Dakota newspaper Indian Country Today reported that the charity was headed to Arizona, with a new focus on Southwest Indians.

That month, Brian Brown abruptly dismantled his telemarketing operation in Rapid City, South Dakota, after public protests and a spate of critical news stories.

He registered with the Arizona secretary of state in June 1995 under a new name, National Relief Charities (American Indian Relief Council now is a subsidiary), set up shop in Phoenix and hired veteran telemarketer Tom Hennessey as his general manager.

"I thought, 'Great, I've got a job where I can make a decent living and feel good about helping people for once,'" says Hennessey, a Phoenix resident fired by Brown last May. It took several months, Hennessey adds, before he became convinced Brown was a scam artist.

Brown, a certified public accountant who now resides in Beaverton, Oregon, did not respond to phone calls and two faxed letters seeking comment. In court documents, however, he has denied any wrongdoing.

For now, most Phoenix residents need not worry about National Relief Charities and its noble-sounding subsidiaries--the American Indian Relief Council, the Council of Indian Nations and the newest additions to the fold, the Organ Transplant Support Network and the Children's Critical Care Alliance.

Like many other unsavory telemarketing operations, National Relief Charities avoids shaking down residents of the state from which it operates.

"A classic approach to keep the spotlight off yourself," says Denise Valenzuela, an assistant state attorney general and a member of Arizona's multiagency Telemarketing Fraud Task Force.

So far, the out-of-sight approach has worked. Karon Krause, who tracks charities for the Phoenix office of the Better Business Bureau, says her agency has received no local complaints about National Relief Charities or its related operations.

"That's not surprising, because they keep such a low profile here," Krause says. "But we've put an alert out about National Relief Charities because of information we've gotten from around the country. They have quite the bad track record."

The State of New York cited that track record in a still-unresolved 1993 lawsuit. It called Brian Brown's charity "a fraudulent fund-raising machine designed to generate millions of dollars for their directors."

Pete Hickok, a U.S. Postal Service inspector and member of the Arizona Telemarketing Fraud Task Force, won't say if Brown and National Relief Charities are under investigation.

"If we get continuing calls of complaint about a given operation," he says, "then we may feel the telemarketing room is attempting to mislead the public. That's when we step in. But I don't have anything to say about [National Relief Charities] at this time."

We'd like to provide some food to these small children and elderly who are going without, and I was wondering if we could possibly send you a gift-reply envelope for a small tax-deductible pledge to help feed these children that are going without food.

--a National Relief Charities telemarketer, in a successful call to a Brooklyn, New York, woman

The 1988 feature story in the Washington Post was warm and fuzzy. It told of a woman named Bernice Myers who operated a small Sioux craft shop in the unlikely outpost of Warrenton, Virginia--an hour from Washington, D.C.

Myers spoke movingly of how she'd travel regularly to South Dakota's reservations and buy handcrafted items from impoverished Indians for resale at her little shop.

"If she could tap the talent, she thought, maybe she could alleviate some of the need," the Post reported. "'There are no jobs, no money, there's nothing,' Myers said, still incredulous."

Myers' husband, Dave, chimed in.
"The idea is to create jobs. You have these fine artists, and they have no marketing outlet," said Dave Myers, described in the piece as a man who worked in data processing for years before founding the Famine Relief Fund in 1985.

The Post failed to report that a year earlier, Dave Myers had agreed to stop soliciting charitable contributions in West Virginia. Authorities there had alleged that less than 9 percent of Famine Relief's contributions had gone toward programs described in its fund-raising letters.

But West Virginia is just one of 50 states. Myers continued to pitch nationally in the late 1980s and early 1990s, using Famine Relief and its successor charity, the American Indian Relief Council, as his lucrative vehicle.

In 1991 and 1992, he mailed fliers that told of Indian mothers "pleading for milk for their babies or diapers or any hope we can share," and of scores of homeless Indians roaming around Rapid City.

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This comment is posted by National Relief Charities for clarification and accuracy. ** David and Bernice Myers founded the Famine Relief Fund in Virginia in 1998. It closed in 1990, the same year David Myers started AIRC in South Dakota (SD). He operated as a call center with Native Americans raising funds used in turn to provide services for Native people. In 1992, Myers resigned as President of AIRC on short notice. He brought in Brown as President and took a service contract with AIRC during the transition.

In 1993, the Pennsylvania Attorney General brought a case against Brown, Myers and AIRC by association, related to alleged misuse of funds/payments to Directors and exaggerated claims in fundraising. The settlement agreement in this case clearly states “no finding of wrongdoing” and AIRC incurred no fine. AIRC ended the case by offering a settlement to stop the drain on legal fees – AIRC’s federal 990 form includes this information. However, AIRC asked that the settlement funds be directed to aid specific tribes in need that AIRC was already serving.

The form 990s for the early years show program percentages started high (60%) but declined (40% to 25%) as the organization attempted to expand and in doing so incurred higher fundraising costs. However, at no time was the percent of donations at the 2% or 4% level as mentioned in this article. Nor did the SD office close when the Arizona (AZ) office opened; rather, SD expanded to serve more Plains tribes, even as AZ was growing.

The early 990s also show AIRC served 15+ tribes in the Plains and Southwest. Resources benefited many people and communities – not just a single tribe. AIRC’s early income is also misperceived. AIRC had no gift-in-kind products to distribute at the time; all services were cash-based and income ranged from $1.5 to $5M. Program expenses ranged from about $1 to $1.5M and included job services (10-45% of program expense), self-help programs (housing, gardening, 10-40%), substance abuse (about 10%), and a Native crafts make-sell program (about 10%). Roughly, 45% was grants, 25% specific aid to individuals, 10% substance abuse, 10% crafts and 10% self-help.

Today, AIRC is one of eight programs of National Relief Charities, a 501(c)(3) nonprofit in good standing. NRC is a GuideStar Gold Exchange Member, representing the highest level of transparency, and a Top-Rated Nonprofit. NRC’s headquarters and telemarketing center is located in Texas. NRC serves 65 reservations in 11 states, benefiting 250,000 Native Americans each year. We invite you to review NRC’s 2012 annual reportand form 990 for accurate information and to contact us at 800-416-8102 or if you have any questions.

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