Research before investing in the reserve

In this blog, I will discuss a common question when it comes to helping people on reserve or investing in the reserve. This topic isn’t to down any particular band or people, it is merely to educate and caution those who are well-intentioned in helping communities develop or grow or help a subset of the population or help the local economy. This can be a complicated process and can quickly become an ethics issue depending on the indigenous governance or non-profits financial practices. 

First thing I would recommend if it has to go to charity or non-profit for tax purposes I would recommend it go to one that is not tied to Band and or Tribal council due to political interference. For example, the people you may be helping with this money may be against the band’s political agenda most commonly clandestine resource development. This is a common issue and a secret battle that happens in many communities across Canada. Giving the money to the band or any organization tied to the band will never reach that particular population’s cause. 

The Second Thing I would look into is whether or not the band has an open disclosure on funds or is in third-party management. This will determine whether there is a timeline on your money to reaching its objective or if it ever will. For example,, if the band is in third-party management all funds are managed by firms that are hundreds of kilometers away from the community they serve. None of these corporation’s employees has ever set foot in that community. This leads to indifference to the socio-economic realities of the region, it is just another procurement project for the company. And if your investment or donation is given to the community it will never reach its destination. 

The other part of this is if the community is self-managed. This is another beast on its own because you have to research its financial statements. You have to make sure they disclose their grants and contributions and match them with what is spent on the service delivery. For example, according to Kitigan Zibi’s 2019-2020 report, the budget for social work is 5 million but 1.7 million is spent on the salary of staff for the service delivery. This can say a lot of things but… it just doesn’t make sense!… for example Kitigan Zibi because of its financial transfer agreement where budgets are allowed surpluses… Kitigan Zibi has a total surplus of $57,832,692 for the year 2020. No one other than upper management has an idea where this money goes and which account it is in. but it certainly does not get used in the community or social programs. With that being said at this time in my case there is no Incentive with Kitigan to disclose the accounting or its actual spending anytime soon…. Because it benefits a 50-year kleptocratic regime that resembles an “oligarchy.”  

The goal isn’t to stop you as an investor or well-meaning person from wanting to help out an on-reserve cause. It’s being aware that the politics and agendas of the band councils don’t often align with people’s values or ethics. For example, Look at the recent news with Rosanne Archibald and her exposing the corruption going on at AFN (Assembly of First Nations) Which has been going on for decades. This was nothing surprising to people who are politically literate on reserve. The best cause of action for donation is to donate to the causes from the grass root’s or directly to a charity. If it’s an investment give the funds directly to the entrepreneur especially if they are following every part of their business with a good ethic.