Enduring Tribal Prosperity
By Rod Van Mechelen
While some American Indian tribes become wealthy, many of their members languish in poverty. What can be done to reverse this, prevent this, and lay the foundation for a durable prosperity?
2016 Olympia, Wash. - Poverty has long been a problem for the Indian tribes of America. Several brilliant leaders and scholars have dedicated careers to addressing this matter and I will not attempt to address that, here. The focus of this article is, what comes after the money?
On October 17, 1988, Republican President Ronald Reagan signed the Indian Gaming Regulatory Act (IGRA) into law, thereby granting to tribal governments the right to engage in gaming to the extent legal in the states in which the tribe's reservation resides. This was a boon for tribal governments, providing them with much needed revenue to fund social programs and other economic development projects.
But it also had a dark side.
In a pattern replicated by tribe after tribe throughout the United States, tribal governments build casinos, see their revenues grow, only to witness the decline of their members who become reliant on per capita distributions. It was almost like being on welfare.
Per capita payments for children went into trust funds, where they accumulated until the children came of age. Seeing this money, many young tribal members lost all ambition, and coming of age for many starts with a spending spree on fast cars and high living that all too soon gives way to a life of dependence and poverty.
As the time approaches when my own tribe will have a casino, this is a matter for great concern. How could members benefit without risking a similar decline? Some believe the answer is to say no to per capita, and to reserve revenue from all economic development projects, including casinos, for services, education and jobs.
There are at least two problems with this.
First, benefits or money, it doesn't matter. Anything that comes "for free" can create a welfare mentality. Yes, I know this is not for free, but derives from an inherited relationship with the federal government. But that is irrelevant to the psychology of the individual members. Free or not, it encourages a welfare mentality.
Second, it engenders the creation of tribal bureaucracies that grow to enrich the tribal bureaucrats and politicians at the expense of their members.
Fortunately, there is an answer.
There is a saying about family fortunes: poverty-to-wealth-to-poverty in three generations. Somebody works hard, builds a business or otherwise creates a fortune and passes it on to the next generation, which preserves it but does nothing to add to it, following which the third generation fritters it away.
This happens to most fortunes, but not to all of them. Some families manage to retain, maintain and grow their fortune generation after generation. How do they do it?
Father and son, Bill & Will Bonner, set out to answer that in their book, Family Fortunes. What they found is that these families behave like tribes. No, they don't say that, but anybody familiar with how tribes work can instantly see that this is what they describe.
I won't do a detailed review of the book, here, but in my opinion it should be mandatory reading for every tribal council member of every tribe in the country, as the Bonners describe how these families have managed to create, maintain and grow their fortunes generation after generation, while maintaining a family "tribal" culture in which their members thrive without falling victim to the welfare mentality.
Power to the People: The United Way Model
Part of what they found is that these tribes relegate power to their members. Specifically, responsibility for tribal affairs and tribal business.
Members are expected to at least be knowledgeable about the tribe's businesses, they are encouraged but not required to work in the businesses, and they are required to attend annual if not quarterly "general council" meetings to vote on key issues.
Most Indian tribes already do this. But we can take this another step further to relegate responsibility to every tribal member for determining how tribal funds will be distributed.
National Indian Gaming Commission
Indian tribes are required by law to follow the criteria above set by the National Indian Gaming Commission (NIGC), but tribes can determine for themselves how they go about determining the distribution. My suggestion is to leave responsibility for this to the members.
IGRA requires net revenues from any tribal gaming operation to be used for the following purposes:
- fund tribal government operations or programs
- provide for the general welfare of the Indian tribe and its members
- promote tribal economic development
- donate to charitable organizations
- help fund operations of local government agencies.
If a tribe is able to adequately provide these services and wishes to distribute net revenue in the form of a per capita payment to members of the tribe, the tribe must have a Revenue Allocation Plan, which is approved by the Secretary of the Interior.
Source: National Indian Gaming Commission FAQ: What happens to the profits from Indian gaming operations?
Within the parameters set by the NIGC, certain programs must be funded. This could be set at a minimum amount. Beyond that, every adult tribal member could pick and choose how much of their "share" of the revenue would be allocated.
This way, programs would need to compete for their members' support. Some members would want to support education, others cultural activities and events, while others would want to put their share into economic development. And so on.
The logistics of this could be handled similar to how corporations handle United Way.
United Way is a charitable organization that works with employers to provide the means for employees to decide how much they want deducted from each paycheck, and which charities they want to support. The model has been in use for decades, it works, and tribes could employ something similar to allow their members to pick and choose which programs they want to support with their "share" of the tribal casino revenue.
But how much is each member's share? For simplicity, a share could be determined by first deducting the base minimum amount allocated for programs, and then dividing the remainder by the number of adult tribal members. Engaging members in the allocation process would help to cultivate a sense of ownership for the programs, as each member would thus feel more invested in them.
Beyond this, however, lies another possibility for cultivating ownership, responsibility, and thrift.
Buying Shares in Tribal Enterprises
While the NIGC has regulatory authority over tribal casinos and casino revenues, this does not extend to other tribal enterprises, especially off-reservation. And it may be possible to allow tribal members to allocate some of their share of the casino revenue to "invest" in tribal enterprises, buying shares that would belong to them in what are called Section 17 corporations described in the Tribal Business Structure Handbook, and from which they could earn dividends, just like family members of wealthy non-Indian tribes are paid dividends in the family enterprises.
This is just an idea. I have not investigated the feasibility or whether it would be subject to Bureau of Indian Affairs (BIA) oversight, but there would need to be a means for external audits to ensure against fraud and to protect the individual Indian shareholders.
Assuming this could be done, this would allow tribal members to use casino revenues to build a secure future for themselves and their family members through investing in tribal enterprises. Some would fail, some would succeed, but the entire process would help to cultivate an attitude of responsibility that would run counter to the welfare mentality engendered by benefits and per capita.
Raising Kids Right
For my own tribe, I would like to see a summer camp where children can spend the summer learning life skills, receiving remedial tutoring, learning culture and both tribal and international languages, and having fun. Once, the Cowlitz were known for their ability with horses, and horses should play a role in this.
While education is very important, college should not be the goal for all or even most tribal youth.
In one of his books, Malcolm Gladwell described the differences between the education of poor children versus wealthy children. Poor children actually receive more classroom instruction than wealthy children do, yet wealthy children derive vastly more benefit. Why? Because classroom instruction is primarily about indoctrinating children to become obedient little minions of the state. Wealthy people don't care about that, nor should we.
There's a saying that A students work for C students, and B students work for the government. Another important truth is that there are a lot of billionaires who do not have college degrees.
Billionaires who don't have a college degree include Ted Turner, Ralph Lauren, Mark Zuckerberg, Michael Dell, Sheldon Adelson, Larry Ellison, Bill Gates, Steve Jobs, Jack Dorsey, Paul Allen, Sean Parker, Evan Williams, Jan Koum, Dustin Moskovitz, Hiroshi Yamauchi, Gabe Newell and Azim Premji, to name a few. So college is not necessary to success, and in the years to come it may even prove a detriment.
Tomorrow Will Be Different
The world in which we live is very different from the one into which I was born, and I'm only 63. Within 20 years, it will change even more.
Many of the jobs of today will be taken over by robots and computers. Most college degrees provide training for jobs that no longer exist, and millions of new college graduates are struggling to find jobs. Most American families are subject to the whims of the present, while tribal youth can benefit from the wisdom of their tribe, with its focus on 7 generations.
Seven generations from now, the world will be transformed. Life spans for some will be measured in centuries rather than decades. Work will take on a completely different meaning as the more nations adopt a guaranteed basic income for their citizens. The division between classes might all but vanish, or it could grow even wider.
To be prepared will require every tribal member to have a high willingness to learn coupled with a high willingness to accept change. Because tomorrow will be very different.
Rod Van Mechelen
Rod Van Mechelen is a member of the Cowlitz Indian Tribe and served from 2002 to 2012 on the Cowlitz Indian Tribal Council.