Ballarat and District Aboriginal Co-operative chief executive Karen Heap was left reeling after she received an anonymous letter, unleashing a tirade of racial abuse on the first day of NAIDOC week.

The letter took aim at Ms Heap for publicly condemning the City of Ballarat's controversial decision to drop Mullawallah as the name for the city's newest suburb.

It also attacked the wider Aboriginal community for continually "inflicting" its culture on Ballarat.

"We are inflicted with Your Welcome to Country, smoking ceremonies and calling some of your older people Aunty and Uncle (when clearly they are not)," the letter read.

"You have received an apology for wrong committed by past generations, been given back some land and continue to receive millions of dollars in government handouts (some wasted) and still you are not satisfied."

The letter also said the only "true Aboriginals" deserving of any "sympathy" were those living in Central Australia.

It went onto blame Indigenous people living in remote communities for bringing harsh living conditions on themselves through "self-inflicted" alcohol abuse.

"To add insult to injury the majority of people who claim to be Aboriginal have so little of that blood it is laughable," it read.

The author of the letter said they did not want to be identified for fear of being labelled a racist. 

Ms Heap said the letter was riddled with baseless falsities and damaging misconceptions about Aboriginal people.

"Aboriginal people do not generally chose to live geographic regions, like most Australians Aboriginal people are born into places where their families have lived for generations," Ms Heap.

"It is a deeply offensive comment, any Aboriginal person is a true Aboriginal."

She said the tradition of referring to an Aboriginal elder as "Aunty" or "Uncle" stemmed from an ingrained sense of respect for the leaders of their community. 

"It is a sign of respect for a deeply esteemed person in the Aboriginal community," Ms Heap said.

"In a traditional sense it sees all people for what they are, part of a wider Aboriginal family."

Ms Heap said funding for Aboriginal welfare is highly controlled and competitive so wasted resources was rare. 

She said BADAC self-funded many of its programs and was audited annually.

"What's most disappointing is that the letter does not give us the opportunity to respond and so the cycle of racism continues," Ms Heap said. “It leaves you nowhere, you've go nowhere to go with it. "We need to be moving on from the darkness of the past to make sure we have a place for Aboriginal people in society but it's a constant battle. I would never attack this person or call them a racist but I'd like to be able to educate and inform them about the misconceptions they have about our culture."

melissa.cunningham@fairfaxmedia.com.au