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.

The few Indians who did come on board in Phoenix prove his point.
"I can fill a food basket that will feed six children for one week," a Native American telemarketer named Charlie H. told a Johnstown, New York, woman earlier this year, his tone mournful, sincere and dignified.

"You're still having a hard time?" the woman replied. "I don't understand why the government don't help you people more."

"I don't either. They put us on reservations and forgot us."
"That was a shame. We're helping everybody else in the world."
"There you go. It's people like you who feel the same way and help us. If it wasn't for you people, we wouldn't have nothing."

The woman promised to send a check for $25.
Charlie was soliciting for a new Brian Brown enterprise--the Council of Indian Nations, formed in April 1995 "to provide emergency services and self-help programs to Native Americans in the Southwest."

A Council of Indian Nations brochure printed this year noted its many alleged accomplishments for 1995. A pie chart detailed the charity's "program services" for the year, claiming about half of its income--an amount is never noted--went to "food programs," 18 percent to "medical programs" and 13 percent to "children and educational programs."

That sounded fine. But the parent firm's 1995 tax return indicates that National Relief Charities granted and/or allocated only $96,390 for the entire year to its target Native American population, after collecting donations totaling $5.47 million.

That adds up to a paltry 2 percent--not the 85 or 90 percent its telemarketers claim.

In September 1995, Brian Brown sent newsletters to thousands of donors, applauding his charity's continued work with South Dakota's tribes.

"AIRC forms partnerships with those working on the [South Dakota] reservations," he wrote. "We seek out individuals and community leaders who share our ideals of seeing life improve on reservation communities. . . . AIRC is sensitive to the needs of the Sioux people."

Most readers hadn't a clue that Brown had fled South Dakota months earlier, leaving behind a trail of broken promises.

Last January 26, National Relief Charities amended its articles of incorporation, adding new "purposes" beyond helping Native Americans. Among the new goals:

"To focus public attention upon the problems, needs, concerns and conditions of animals and the environment," and "to provide goods, equipment, services and funds to relieve the problems and meet the needs of those that need help."

Could it be any less specific? Probably not. But under current laws, in Arizona and nationally, the charity doesn't have to spell anything out.

A Phoenix telemarketer provided clues as to the new direction during a call this summer to a Virginia woman:

"We're calling from the Organ Transplant Support Network. We're a nonprofit charity involved in helping families with young children who are awaiting transplants. What we do is help with the expenses that their insurance doesn't cover, like their relocation. That alone runs into thousands of dollars without help of caring individuals. It can spell financial ruin for many of these families. We were hoping you could find it in your heart to help these children and their families with a tax-deductible contribution."

The potential donor asked for written information. The telemarketer responded that she couldn't do that, "because of the costs" of such mailings.

The new direction required a new director. By last spring, Tom Hennessey says, he and Brian Brown were at loggerheads.

"The more I found out about Brian and his programs, the more questions I asked," he recalls. "He was evasive about where the money was going, but he told me how sick he was of Native Americans. I finally came to the conclusion that I was part of a rip-off."

Hennessey says he was looking for a new job when Brown fired him last May. In the months after that, the telemarketing staff shrunk nearly in half, says another ex-employee. Brown also cut the hourly wage for his telemarketers from an average of $7.50 an hour to about $6.50.

Rumors ran rampant that National Relief Charities would close its Phoenix office and relocate, this time to Brown's latest home base of Oregon. Staff morale plummeted.

But things apparently have turned around. In recent weeks, National Relief Charities has advertised in local papers for new telemarketers.

Until the charity files its next Form 990--next April 15 at the earliest--it will be impossible to say how profitable 1996 has been. But it won't surprise anyone familiar with Brian Brown and his charities if this year has been another rousing success.

Says Pennsylvania deputy attorney general Mark Pacella, who has been battling Brown in court since late 1993: "That gentleman and his charities seem to have nine lives.

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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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