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 Section 7871 of the tax code to develop tribal charitable 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 released on November 4, 2009, titled Charitable and Sovereign: Understanding Tribal 7871 Organizations. The report had the following key findings:
 
  1. There are a large number of 7871 organizations, but only a small number have been actively fundraising.
  2. There is great programmatic and organizational diversity among 7871 organizations.
  3. Protecting the sovereign rights of tribes is frequently cited as an incentive for developing 7871 charitable organizations.
  4. There are significant barriers to fundraising for 7871 organizations.
  5. The myth of “rich gaming tribes” persists as a barrier to fundraising for 7871 organizations.
  6. Federal legislation is inconsistent in its treatment of 7871 organizations and their eligibility for federal grant programs.
  7. There are a large number of tribes that have spun off 501(c)(3) organization to remove barriers to fundraising.
  8. There is a need to establish best practices to reassure prospective donors to 7871 organizations.

To download the full copy of this report, visit our publications page or click here.