The Northwest Area Foundation is one of the most prominent philanthropic funders of American Indian projects, targeting 40 percent of its grants to Native efforts. Now, it has started a webpage to benefit Native community development financial institutions (CDFIs), local alternatives to the kinds of financial institutions that are scarce on reservations.
The St. Paul, Minnesota-based foundation calls Native CDFIs “engines of change.” “Native CDFIs weave culturally informed relationships that bridge traditional cash economies and the financial mainstream, making financial education and services available to tribal members,” the group says. “They help tribal members open bank accounts, access credit, and make savings plans. Families can purchase their first homes, Native-led businesses can secure their first loans, and communities can build long-term wealth,” the foundation points out.
With the dearth of Indian-owned banks or credit unions in Indian country as well as the general lack of financial services, Native CDFIs, which make loans but do not take deposits, have become a viable alternative in recent years. They have access to funding from the CDFI Fund, a unit of the U.S. Treasury, which has targeted Native CDFIs and tried to help develop new ones.
“Native CDFIs build a powerful multiplier effect in tribal communities, creating jobs and self-sufficiency that lead to more stable and prosperous communities,” the group says. “Most Native CDFIs function as independent nonprofits—separate from tribal governments—opening the door to new market tax credits and incentives to support Native-owned businesses.”
The foundation said that while CDFIs are relatively new, the movement is founded in the cultural and historic strength of Native communities. NWAF has funded many Native CDFIs, including the Taala Fund, Four Bands Community Fund (Cheyenne River Sioux Tribe reservation), the Rosebud Economic Development Corp. (Rosebud reservation in South Dakota), and others.
The Taala Fund, based on the Quinault Nation in Washington state, used its NWAF money to help start and support small businesses. It also wants to encourage savings. One of its goals is to start a matched funding college savings account for each tribal member of elementary school age.
In addition to grantee stories like the Taala Fund, the page provides tools and information for those interested in starting their own Native CDFIs. These include a PowerPoint presentation on successful CDFI startups by First Nations Oweesta Corp., a CDFI industry analysis by the Carsey Institute, policy goals by The Native CDFI Network, and others.
According to the Native CDFI Network, there currently are 70 Native CDFIs, with another 60 in the development pipeline. The group would like to see a budget appropriation for $16 million to assist Native CDFIs for 2018. It also would like to see the federal New Markets Tax Credit program become permanent.
The policy brief spotlights the work of the Four Bands Community Fund and the Northwest Native Development Fund, located on the Colville reservation in Washington state, which serves the Colville and Spokane tribes.