“Sudden money," a term coined by Susan Bradley in her 2000 book Sudden Money: Managing a Financial Windfall written with Mary Martin, sometimes creates more problems than it solves. Whether from a divorce settlement, winning a lottery, or receiving a death benefit, new wealth recipients (beneficiaries) often struggle with strategic and transition planning for unexpected cash windfalls.
Nowhere is this problem more pressing than it is for tribes that have recently received long overdue trust settlements involving land, water and leasing rights from the federal government.
Since 2011, class-action lawsuits in Indian country have resulted in over $3 billion in lump-sum payments to some 50 tribes. Of these, the Cobell v. Salazar settlement alone designates $1.9 billion through the Trust Land Consolidation Fund in an effort to buy back fractionated land interests across Indian country on up to 150 reservations.
Having seen many tribes unprepared to manage these large payouts, several Native-focused financial experts – Sue Woodrow, Assistant Vice President and Co-Director at the Center for Indian Country Development at the Central Reserve Bank of Minneapolis, Loren Birdrattler, a private consultant on strategic planning and organizational development in Indian country, and Ian Record, Director of Partnership for Tribal Governance at the National Congress of American Indians (NCAI) – have developed a program to help tribal recipients get maximum benefit for their communities.
The program, called the Piikani Money Campaign — with “Just Don’t Blow It” as its tagline — aims to be proactive. By the time one of the latest federal-tribal buyback settlements went out to the Blackfeet Tribe two weeks ago, the program and its tool kit had already flooded the reservation. Signs, brochures, websites and other electronic media sites reading "Just Don't Blow It" already peppered tribal sites. The educational resources contain information that is easily grasp and easy to use.
Woodrow said during the webinar that since traditional financial education had not been effective, they wondered how to better reach Indian recipients at Blackfeet. The result was a mixture of traditional financial educational tools supplemented with brief sound bites accessible through a wide variety of sources. This culturally-tailored program is free to those receiving offers. To ensure its effectiveness, it was also a culturally-tailored program.
With a potential $273 million in offers to Blackfeet tribal members if they choose to fully participate in the buyback settlement at hand, there is a lot at stake, both to the tribe and to the individuals. Based on past buyouts, the tribe expects $120 million will flood the community in the next few months. The average awards are expected to be about $28,000, and some awards are likely to be over six figures.
Anecdotal evidence suggests that when Indians and others have received one-time large cash payments, the money is quickly spent, with little saved. For instance, one tribal recipient paid $8,000 to cash his federal buyback check at a check-cashing store, according to program organizers. Beyond that, people have stored cash at home instead of in a bank account because of unpaid back charges or high-risk account charges. And elders' families have preyed on them, forcing them to sell the only asset – a leased land or a leased home – they get income from.
“Just Don’t Blow It” is supposed to curtail such problems through the following means:
- Identifying recipients' most important short-, medium-, and long-term financial goals
- Estimating the cost of each of those financial goals
- Setting up savings for each goal
- Understanding key investment concepts and choose investment tools that align with individual investment time frame, diversification, risk tolerance, cost of investment, availability of funds
- Considering what recipient will lose if s/he accepts the buy-out such as SNAP, TANIF, Medicaid, scholarships, taxes
- Explaining how to build credit
- Understanding investment options (like buying a home or starting a business)
- Helping identify scams
- Avoiding elder abuse
- Encouraging buying and investing locally
The information provided in the program’s toolkit is designed to help individuals make knowledgeable strategic decisions, according to organizers, although they admit that that result may sound easier to achieve than possible.
As similar settlements come in Indian country, the developers will gather data at the beginning, middle, and then at the end to evaluate the effectiveness of the program.
They envision “Just Don’t Blow It” as a potential solution for tribes across the nation: a one-stop customizable toolkit, one that can be modified and implemented quickly.
With an estimated 60 settlements between tribes and the federal government yet to be reached, according to organizers, getting this assistance out to more tribes is critical. Though, to their credit, other institutions have tried to take an educational approach to this challenge, the key to its success at Blackfeet – its origin, they believe.
"This has largely been a grassroots driven initiative," Woodrow said. "This is very significant because it has bubbled up in the community itself, and they have moved in the direction that they saw as most critical. It shows that the distance between what's happening in D.C. and the reality on the ground can be bigger than you might think."