We're blaming Boston accents . . .

One story:

The name "Figawi" originated with the first sailors of the race, including John Linehan, a well known New England sailboat racer from Osterville, Cape Cod who, when encountering fog during that first sail to Nantucket, stated "Where the fu&k are we?" The phrase from this foggy passage became lore and was shortened to the more socially acceptable "Figawi."

Another story:

A more elaborate humorous explanation, in part based on the preceding origin, is the tale of a fictional band of nomad Indians that would wander from town to town. They were noted for always emphatically announcing themselves upon their arrival in Pidgin English, "We're the Figawi!"

Sadly, this poor band was actually lost. Wandering from settlement to settlement, they kept asking where they were, but would only receive blank stares from the stupid townspeople. They are probably still out there… The Race founders, attempting to traverse Nantucket Sound with its infamous fog and shoals, felt great kinship with these unhappy souls. The official race emblem for many years sported an Indian looking through a spyglass backwards.

What parents tell their children:

Children are told that it is a shortening of the question "Where in the fog are we"?

Learn more at: en.wikipedia.org/wiki/Figawi