Native Business Magazine - December 2018 by Native Business

NATIVEBUSINESSMAG.COM | DECEMBER 2018 | $8.95

BEST BUSINESS ACCOUNTING PRACTICES

FINANCING TRIBES: A LONG TRADITION FOR KEYBANK

Vince Logan:

8 ENTREPRENEURS ON ACCESS TO CAPITAL

Future Generations of Native Finance Professionals

LACEY HORN

COMING HOME AND MAKING AN IMPACT HOLDING WELLS FARGO ACCOUNTABLE TO INDIAN COUNTRY THE WOODLANDS WAY FINANCIAL LITERACY MADE EASY THE MASHPEE WAMPANOAG TRIBE’S FIGHT

on the cover

IN THIS ISSUE DEC 2018 • Volume01 Number 2

Lacey Horn

She Always Knew That She Would Be Back. See Page 8. BY NATIVE BUSINESS STAFF

NATIVE AMERICAN BANK KNOWS SUCCESS DOESN’T COME SO EASILY “Going forward 5 to 10 years, I see the bank, because of our nationwide scope, having 6 to 8 regional hubs around the country.” See page 26. BY NATIVE BUSINESS STAFF

Banking & Finance

Features

The Mashpee Wampanoag Tribe’s Fight For Trust Status Is About More Than Land BY ANDREW RICCI

Vince Logan: Investing In Future Generations Of Native Finance Professionals One of Logan’s priorities as a Native wealth investment manager is getting Tribes to move toward investing at the institutional level.

BY ANDREW RICCI

Profile

Financing Tribes: A Long Tradition For KeyBank Key Bank has done four hefty Native debt deals in the year between August of last year and August of this year, totaling nearly a half billion dollars in finance.

BY MARK FOGARTY

“The only way we can sustain our languages, cultures and people is through our economy.” - Shane Jett

Shane Jett: “If You’re Not at the Table, You’re on the Menu” BY DEBRA UTACIA KROL

Point Of View

Respect Indian Country, Retire “Rent-a-Tribe” One of the ugliest assertions is that a tribe’s success occurs by “renting” itself to non-tribal members, who abuse it for iniquitous purposes.

BY JAMES WILLIAMS, JR., CHAIRMAN, LAC VIEUX DESERT BAND OF LAKE SUPERIOR CHIPPEWA INDIANS OF MICHIGAN

Money

Wells Fargo Gets Real About Corporate Responsibility And Repairing Its Relationships With Tribes BY NATIVE BUSINESS STAFF

Financial Literacy Made Easy NAFSA’s online playlists serve as a primer to deeper financial understanding

BY NATIVE BUSINESS STAFF

Cover Photo By: Ryan Red Corn D ECE MB E R 2 0 1 8

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A TRIBALLY OWNED BANK SHARES ‘THE WOODLANDS WAY’ Beyond earning the respect of customers as a trusted advisor in financial and related matters, Woodlands National Bank is committed to going the “extra mile” to provide exceptional customer service. See page 34. BY NATIVE BUSINESS STAFF

Accounting / Audit

The Future

ARROWHEAD CAMPGROUND & THE NAVAJO WAGON

10 Best Business Accounting Practices From Sam Owl Owl offers a wealth of experience in the accounting field, having worked for two of the Big 4 accounting firms PwC and Deloitte.

BY LYNN ARMITAGE

BY NATIVE BUSINESS STAFF

Special Report

“At the end of the day I’m just a Native guy who loves to help our people and utilize as many Native American people as possible.” - Sean McCabe

APACHE SKATEBOARDS AND APACHE SKATE TEAM

What every tribal government should know about audit preparation is simple: it can bolster a nation’s sovereign immunity.

BY NATIVE BUSINESS STAFF

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NATIVE AMERICAN NATURAL FOODS

HIGH REZ WOOD COMPANY

8 Entrepreneurs & Access To Capital

Native CPA Firm Defends Tribal Financial Sovereignty

BY MARK FOGARTY

Gabrielle Scrimshaw’s Journey From Rural Saskatchewan to Harvard University to Launching an Investment Firm for Indigenous Business.

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BIG ELK ENERGY SYSTEMS

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Businesses

FOUNDERS/PUBLISHERS

Gary (Cherokee) and Carmen (Makah/Chippewa-Cree/Yakama) Davis

EDITORIAL

Executive Editor Carmen Davis - carmen@nativebusinessmag.com Senior Editor Kristin Butler - kristin@nativebusinessmag.com

CREATIVE

Art Director Kym Tyler (Diné) Creative Consultant Vestalight Sevenly

WRITERS

Contributing Writers Andrew Ricci • Suzette Brewer (Cherokee) • Lynn Armitage (Oneida Nation) Renae Ditmer (Chippewa) • Mark Fogarty • Clifton Cottrell (Cherokee) Debra Utacia Krol (Xolon Salinan Tribe) • Theresa Braine Mary Annette Pember (Chippewa) • Mary Belle Zook (Citizen Potawatomi Nation)

ADVERTISING & EVENTS

Director of Advertising and Events Yvonne Schaaf (Salt River Pima/Mojave/Quechan) - yvonne@nativebusinessmag.com

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NATIVE BUSINESS MAGAZINE

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LETTER FROM THE PUBLISHERS

Money.

PHOTOS BY WHITNEY PATTERSON PHOTOGRAPHY

hen it’s discussed as it relates to Indian Country, it often concerns a lack thereof, limited access to banking services and capital, and poor outreach to underserved and unserved Native communities. It’s important to raise awareness about systemic poverty and the geographic isolation of many reservations that has led to historically low incomes and high unemployment rates of residents. Yet we think it’s equally important to shine a light on people and institutions driving solutions to empower self-sovereignty, self-determination and economic strength. In the second issue of Native Business Magazine, we chose to focus on finance. Within these pages, we share the insights and stories of Native women and men defying the odds and improving tribal economic development strategies and access to capital. Cherokee Nation Treasurer Lacey Horn graces our cover. Horn manages the Cherokee Nation’s multi-million-dollar budget, oversees internal and external audits, and applies cutting-edge thinking to decrease tribal expenses while growing revenues. Under her leadership, the Cherokee Nation has increased its dividend to create a Sovereign Wealth Fund, and the tribe has allocated an additional $11.6 million for its 10 health centers. For our finance issue, we spoke with Vince Logan, an Osage Nation member and authority on financial empowerment and wealth creation, about preparing the next generation of Native finance professionals. As senior advisor of the Native Wealth Practice at Permanens Capital L.P. in New York, Logan underscores the need for Tribes to invest at the institutional level. We also spotlight the best practices of exceptional Native American accountants and profile a recent Harvard Kennedy School graduate planning to launch an investment firm for Native businesses and entrepreneurs. We examine the obstacles that have slowed or inhibited financial literacy education across Indian Country, and we share online tools available that can serve as vital stepping stones to enhance one’s financial knowledge. The finance-themed issue of Native Business Magazine puts the banking industry under a microscope. For centuries, Indian reservations have been considered a nonmarket for banks. To this day, Native Americans drive sometimes hundreds of miles round-trip to access banking services. Fortunately, in certain pockets of Indian Country, that’s changing. Both tribally owned and mainstream banks are opening branches in untapped markets

on and near reservations, as well as in cities with large urban Native populations. They’re also keeping up with the technological advancements of the 21st Century, extending online and mobile banking services to their customers. That said, it’s no secret that Indian Country has had a fraught relationship with some banks. Native Business Magazine doesn’t glaze over that tension and the lingering wariness of tribes and Native American people to bank with certain corporations. In this issue, we face head-on topics such as corporate responsibility and reparations with tribes. At the end of the day, it’s impossible to have an economy without Native American-owned businesses. That’s why, in our December issue, we also showcase entrepreneurs who have turned passion into profit—but all of whom first had to find the capital to begin their companies. Some self-capitalized their businesses, others secured investors, and some business owners applied for and received loans through more traditional routes like business incubators, nonprofits or the U.S. Small Business Administration. We asked each of these entrepreneurs the same 10 questions, and their replies shed light on the state of affairs of small business capitalization across Indian Country. As Native Business Magazine demonstrates in our “finance” issue, human and financial capital is only growing across Indian Country. By 2050, the Native population is expected to increase by more than three million people. Access to capital and financial assistance must mature with us. The upside and potential for Native American public and private business is enormous. But it will require all of us in Indian Country to recognize our worth, boldly communicate opportunities and push the funding envelope like never before—even if that means us investing in ourselves on a more continuous basis.

We just might be the “funding” change we have been waiting for. Onward,

GARY DAVIS Publisher

CARMEN DAVIS

Publisher & Executive Editor

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Horn

C H E R O K E E N AT I O N

TREASURER OF THE

Lacey Lacey Horn always knew that she would be back. “I always knew I would work for my Tribe,” Horn said in an interview with Native Business Magazine. “I never knew in what capacity or in what form it would take. But I just knew I would come back and help my people in my own way.” By Andrew Ricci

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PHOTOS BY: RYAN RED CORN

COMING HOME & MAKING AN IMPACT

COVER STORY

s the treasurer of the Cherokee Nation, she is doing just that. Horn grew up in Oklahoma Indian Territory. Her mother is a nurse practitioner and her father worked with her grandmother in the family business, and she credits both of them for being role models who provided a strong blueprint for her life. It was her late Grandma Horn, she says, who inspired her love of accounting and finance when she was only four years old. Even though she has a bachelor’s degree in business administration and a Master of Science in accounting from SMU, she says that “Grandma Horn was my first finance and accounting professor and she taught me everything about running a small business and managing finances, so I always say finance is in my blood.” Those early experiences set her on a path that has made her a nationally recognized leader, advisor to the US Treasury on Tribal issues, much sought after board member and speaker, and heavily decorated professional. While at SMU, Horn spent time interning in the internal audit and tax departments at the Dallas office of Hunt Oil Company, one of the largest privately-held companies in the United States. To this day, she credits Hunt Oil for supporting her goals and endeavors, and for providing her with opportunities to grow and develop. “SMU is a thoroughbred institution for business and finance, so foundationally, I had a solid education,” she said. “When I started at Hunt, they let me write my own ticket, so I worked in their internal audit and tax departments.” When it came time for her to graduate, she decided that she wanted to go into public accounting as a profession. After hearing that the best opportunities for that field were in Washington, DC, Chicago, or San Francisco, she moved to the Windy City to take a job with KPMG, one of the largest professional services companies in the world and one of the “Big Four” accounting firms. Even though KPMG employs 189,000 professionals, Horn quickly gained recognition among her peers and colleagues. She was consistently rated as a “Superior Performer” in the Financial Services division and was selected as the Chicago representative for the KPMG Midwest Audit

Senior Associate Council, one of 14 members representing the Midwest area offices. She was also selected as a 2009 KPMG National Intern Instructor from a nationwide pool of applicants. “When I went to work for KPMG, it was like getting another college education,” she said. “They matched me with a mentor who was exacting and a perfectionist. From an audit perspective, that’s what you want, so I was lucky to be able to learn from her.” “I was also lucky to be exposed to big names and well-known clients,” she continued. “Everyone I worked with there were stars in their own right, and they taught me more than I could have imagined.” For someone just starting out in their career, she views the KPMG experience as crucial. The tone that was pushed from

Once she moved, she found that the recession had hit Oklahoma just as bad – if not worse – than the rest of the country. And with the Tribe preparing to elect a new Principal Chief, Horn says that she felt like her people needed a change. This spurred her to get involved with the campaign of Bill John Baker, who was elected in 2011 to serve as the 7th elected chief of the Cherokee Nation. Horn had no idea that he would later tap her to join his administration as the Tribe’s treasurer. And she certainly had no idea how far this role would take her beyond her cabinet duties. “When Chief Baker asked me to be the treasurer, he told me that if I really applied myself, I’d come out of this in eight years as an expert in Indian Country,” Horn said. “I was 30 years old and I had no Tribal experience, but I was a quick learn-

“If I can help to pave roads by creating or following best practices, then perhaps other Tribes can either follow that path or emulate it in their own way.”

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the highest levels of the organization reinforced a culture of integrity and commitment, and Horn says her experience with major public companies led to a high comfort level around numbers – seeing billions of dollars on a company’s balance sheet – that prepared her well for her later positions. Her KPMG experience also provided her with another asset that has come in handy: a strong network of professionals that now extends from Dallas to Chicago and all around the world. “If I have a problem or need help with an issue or a question, there’s a lot of people I can call who can help me,” she said. “I know how to phone a friend when I need to.” After four years in Chicago at KPMG, Horn felt a calling to move back to Oklahoma. “After the financial crash happened, it was just a different vibe,” she said. “I was also going through some personal experiences. My sister was having a baby and my grandmother was 87, so I felt like I wanted to be back home with my family.”

er and I was able to rely on the team here. Chief was right, I’ve learned so much, and together we’ve really accomplished a lot.” As Treasurer, she oversees all of the Cherokee Nation’s finances, which is no small feat. The Cherokee Nation is the largest Native American tribe in the United States, operating not only as a government, but also as a nonprofit, a foundation, and a corporation with a footprint in 49 states. It takes six months of coordinated effort for her team to put forward the overall financial budget for the Tribe, and she is also responsible for overseeing various internal and external audits. Payroll and accounts receivable, warehousing and receiving, and purchasing and contracting are all also under her purview. One of her first steps in the role was to bring the audit experience that she gained at KPMG to examine the Cherokee Nation’s budget, looking for opportunities to increase revenues, decrease expenses, and work with the federal government to secure additional funding. As a result of these efforts, the Cherokee Nation’s bud-

COVER STORY

get has increased from roughly $600 million on her first day to $887 million that was recently approved for fiscal year 2019. “I looked at employee fringe and found opportunities to save on costs, without sacrificing benefits,” Horn said. “We found a lot of other ways to save money, and we also organized to better compete for federal grants. This enabled us to free up our tribal money to go directly into needed services for the Cherokee people.” “We also increased our dividend to create a Sovereign Wealth Fund,” she said. While in office, she has helped upgrade the tribe’s bond rating, promoted financial disclosure and transparency, and received numerous “Excellence in Financial Reporting” awards from the Government Finance Officers Association. Looking at the numbers, it’s clear that Horn has made progress toward her goal of helping her people. The recently-approved budget includes an $11.6 million total increase for the Nation’s 10 health centers, which is the result of improved third party billing processes. The health center projects, in particular, are accomplishments she is proud to have had a role in making possible. Growing up, she saw firsthand how her mother, a nurse practitioner, had to treat patients without enough resources. And when she delivered her son in 2010, the Tribe’s hospital had to send her home before her 48 hour stay, which is the national average and what doctors recommend. “Being a mom is one of the reasons that I’m so passionate about our new health care facility that will soft open next July,” Horn said. “When I had my son, I had to leave the hospital early because they needed the room for other mothers having babies.” This is a story that Horn has told to as many decision-makers as she can, to the Halls of Congress and everywhere in between. It is proof, she says, that the feder-

al government needs to meet its trust and treaty obligations. Horn’s experiences and record have made her a much-sought after asset and advisor. She currently serves as a member of the Native American Rights Fund’s Board of Directors, the Governmental Accounting Standards Board’s Tribal Government Accounting Working Group, and the Board of the Oklahoma Center for Nonprofits. In 2015, Horn was selected by Treasury Secretary Jack Lew to be one of seven Native representatives on the U.S. Department of the Treasury’s Tribal Advisory Committee (TTAC), a committee that was established to advise the Treasury Secretary on taxation of Native Americans, the training of IRS field agents, and training and technical assistance to Native American financial officers. “TTAC is so important to Tribal economic development,” she said. “Indian

Country has such an enormous economic impact and we do all of this with our hands tied behind our backs by an outdated tax code. Tribes have real solutions that would not only benefit our people, but all the people who live in and around our reservations. I take every opportunity possible to communicate this information with the hope of enabling economic development and making our lives better.” One of the keys to Horn’s successes – and a mantra she learned from Chief Baker – is to always try to find a reason to say yes instead of looking for an excuse to say no. “In trying to say yes instead of no, you have an opportunity to make a positive change,” she said. “Sometimes, you have to say no though, and when that’s the case, say it nicely.” She also says that, especially in politics, it’s important to carry out your mission professionally and with integrity. “In roles like mine, there is a bright light shining on you,” Horn said. “I try to make decisions by considering the return on investment it will have for the Cherokee people. If I can help to pave roads by creating or following best practices, then perhaps other Tribes can either follow that path or emulate it in their own way.” If she can do that, helping her own Tribe as well as blazing a path for others, Horn says her goal of bringing greater prosperity to Indian Country will be met. With her term ending on August 14, 2019, Horn doesn’t know what will come next. She says that if she’s asked to stay on, she’d welcome the opportunity to continue serving as the Tribe’s Treasurer. But one thing about her future is certain: whether she stays in a Tribal government role or goes back to the private sector, Horn is just getting started. “One thing that I’ve learned is that when you set your mission to be the hands and feet of God, doors open for you,” she said. D ECE MB E R 2 0 1 8

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VINCE

LOGAN Investing In Future Generations Of Native Finance Professionals

PHOTO COURTESY VINCE LOGAN

By Andrew Ricci

“V

ince Logan is one of the most impactful men in my life,” said Justin Wilson, a member of the Choctaw Nation of Oklahoma who today serves as Director of Strategic Investments for his Tribe. “He has this remarkable way about him that is difficult to describe but is very much intentional, that consistently enables me to see the best in myself and what I might achieve, and moreover, motivates me to actively pursue it,” Wilson said. “He doesn’t allow me to shoot lower than my potential or convince myself that settling for less than my best is acceptable.” This opinion is shared by several of Logan’s mentees who he has helped to navigate the worlds of law and finance both inside and outside of Indian Country.

“Vince is one of those guys who’s ensuring that tomorrow is going to be better than today,” said Tyler Pearson, a member of the Cherokee Nation who is currently in his second year of business school at the University of Chicago after receiving his J.D. from the University of Oklahoma College of Law. Pearson had been interested in finance and investments since childhood, when his father bought him stock in PepsiCo. The interest built from there, but when it came time to officially make his entrance into the world of professional finance, Pearson didn’t know where to start. “I wasn’t quite sure how to go about getting into the industry,” Pearson told Native Business Magazine. At a conference in 2008, he and Logan met and found that – both being from Oklahoma – they

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FEATURE

had many mutual friends in common. The next summer, when Pearson found himself in New York interning with Citigroup, he reconnected and became one of Logan’s mentees. “If I ever needed anything, Vince was always willing to make that introduction or write that letter of recommendation,” Pearson said. “That’s huge. That’s something that a lot of people in Indian Country maybe haven’t had in the past and that I was lucky enough to have.” Many who know Vince Logan, a member of the Osage Nation, consider him to be a true visionary leader in Finance for Indian Country. Today, he leads the Native Wealth Practice at Permanens Capital L.P. in New York, where he works with Tribal leaders in developing investment policies, advising on portfolio management, and providing internal compliance and regulatory oversight for Tribal accounts. But one of the reasons why he is able to be such an effective mentor is that his journey to becoming one of a small handful of Native professionals doing this kind of work led him through several different areas of law and finance. “I attended the Oxford University summer program during law school, and when I got back to Oklahoma I realized that the world had opened up to me when I was over there,” Logan told Native Business Magazine. “I spoke to a professor at my law school and he told me about Columbia University’s School of International and Public Affairs and possibly an international career.” Logan was fortunate enough to get admitted to Columbia, and before he moved to New York City, he knew that he needed to work when he arrived. In the pre-Internet era, this meant doing it the old-fashioned way – sending 100 letters to law firms all over the city and walking from law firm to law firm looking for someone who had an open position. That yielded a job at a firm where he worked in transportation finance law and equipment finance, particularly in areas like aviation and shipping. “I knew nothing about shipping, but I jumped in and learned an incredible amount during my time there,” Logan said. “It was all based on financing equipment, which is quite involved and a complex area of law. From then on, I saw the world through this financing lens.” That led to a successful career in the private sector in which he learned about various aspects of international commerce and trade – two areas highly dependent on financing projects. Banking led to investment banking which led to investments. All of that changed during a Federal Bar Association Indian Law Conference in the mid-90’s, which he describes as a turning point in his career. “One of the tribal leaders at the conference asked me if I could help him,” Logan said. “They had invested gaming revenue with a bank and he wanted to know if they were being properly charged in terms

of fees and whether it was a good idea to invest with this bank.” “I really didn’t have an answer for him,” Logan said, but it had piqued his curiosity. After talking to the managing partners at the firm he worked for and expressing his interest in learning more about the asset side of the balance sheet, they helped him land a position at the Merrill Lynch Private Bank, which started his new trajectory into finance and into investments. He’s been in that industry ever since, including the three years he spent as the Special Trustee for American Indians at the Department of Interior where he oversaw tribal and individual funds held in trust by the federal government. One of the key challenges of running a Tribal Wealth practice, Logan says, is that there is no “one size fits all” solution that works in the tribal space. While sovereign nations may share some common traits and investment themes, they are all vastly different. “I know intimately about 20 to 25 Tribes across the country,” Logan said. “I know them well, and I can tell you they are truly separate sovereign nations.” This means that the size of the Tribes in terms of membership can vary dramatically, as can a Tribe’s amount of wealth and resources. “Some of the Tribes that we are working with have a small gaming operation but large natural resource revenues, so you can’t even approach it from a sector viewpoint,” Logan said. As a result, he has to keep track of not only trends and developments in the gaming industry, but also tracks the oil and natural gas market, other commodities like timber, and developments in renewable energy. “Given that, it is a challenge to build a practice and build a Tribally-focused business and to deliver professional financial and investment advice to sovereign nations,” he said. “You must know a lot. You need to come to the table with a tremendous amount of resources, and that’s what I do.” One of Logan’s priorities as a Native wealth investment manager is getting Tribes to move toward investing at the institutional level. He says that because Native American economies have grown over the last several decades, they’re now having to make complex investment decisions on a large scale, which should require certain safeguards and other policies. “Going decades back, all of the Tribes started out with very small portfolios, but over time the amount of money got larger and larger,” Logan said. “And what is happening – and what I hoped would happen – is that Tribes became institutional in terms of their investments, joining the ranks of the Universities, faith-based institutions, foundations, and endowments with institutional investment policies and institutional boardsmanship in place.” As Tribes grew and started to think more institutionally, Logan says they started to adopt what he calls the “3 P’s”: policies, protocols, and procedures. This institutional thinking also means

“I know intimately about 20 to 25 Tribes across the country,” Logan said. “I know them well, and I can tell you they are truly separate sovereign nations.”

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“We have to educate our Native youth, we have to mentor our Native youth, and we have to employ Native youth, but it’s tough to recruit talent when the numbers just aren’t there.” enhanced record keeping as well as the development and enforcement of ethics codes at the institutional investment level. “Going back when I started in this part of the business, I would visit a Tribe and they would have hundreds of millions of dollars in the bank, and it was pretty common for not much to be written down or memorialized,” Logan said. “Because I would ask them how their investment decisions were made and they would say they really didn’t remember why they did certain things. That’s why I encouraged and still encourage Tribes to think more institutionally.” As Tribes make this transition, Logan wishes they were able to do so with Tribal professionals on the journey – which isn’t currently happening as much as he hopes it someday will. That’s why he’s placed such an importance on – and dedicated so much of his time toward – mentoring Native youth who want to break into the industry. It’s part of what Logan calls building the professional classes. “What you see most in Indian Country is the outsourcing of professionals,” Logan said. “They simply don’t have people in their Tribe or there aren’t enough qualified Native Americans to fill top professional roles there. Some have it better than others, and it’s obviously a mixed bag, but what I see for the most part is that these key decision makers at very key positions are filled outside the Tribes.” “I would love one day to have a world where these are Tribal people in these jobs,” Logan continued. “We have to educate our Native youth, we have to mentor our Native youth, and we have to employ Native youth, but it’s tough to recruit talent when the numbers just aren’t there.” That’s why Logan has set out to do something about it and regularly works with Native youth to try to get them into the world of investments and finance. He has seven young professionals that he mentors, in addition to several who he says have “graduated” and now actually mentor him in some ways. In addition to helping them with the nuts and bolts issues of starting off in the professional world – applying for jobs, making connections, dealing with tough bosses, etc. – he consistently reinforces with them the importance of approaching their profession with integrity and ethics. “I tell them that integrity is number 1 and building a skillset is number 2,” he said. “Everything else will fall into place. They need to know that when you’re in a profession, it’s going to take a lot of twists and turns, but if you have a skillset and approach it with integrity, you’ll be fine.”

And his mentees give him high marks for his impact on their lives. “The self confidence that he inspires is so important,” said Justin Wilson, who is now back home at the Choctaw Nation helping his own Tribe with its portfolio. “So many Native Americans simply aren’t exposed to the professions and careers that Vince looks to expand through Indian Country, and his guidance and demonstration that we are plenty capable of finding success in the fields of finance, entrepreneurship, law, policy, and executive leadership goes so far to making it a reality.” Wilson also credits Logan for creating a network among the other young men and women that he mentors and encouraging them to support one another in whichever ways they can. He says that “is so important to me and has solidified my own dedication to mentoring young Native professionals wherever I can as well.” When Tyler Pearson, another of Logan’s mentees, graduates, he hopes to go back into private equity and focus again on principal investing, but he wants to make sure he can do things that positively impact Indian Country. And he hopes to take on his own class of Native mentees. “I’d like to follow in Vince’s footsteps by paying it forward and returning the favor that I’ve received from him,” Pearson said. If the rest of Logan’s mentees continue to pay it forward, his vision for the future of Native finance may come about sooner than he thinks.

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MASHPEE WAMPANOAG THE

TRIBE’S FIGHT

Trust Status Is About More Than Land

By Andrew Ricci

or the Mashpee Wampanoag Tribe, as with many Tribal nations, land is about much more than a plot of earth. “Land is the blood and bone of our ancestors, and we always had the land,” Mashpee Wampanoag Tribal Chairman Cedric Cromwell told Native Business Magazine. “It was part of our creation story.” “When you’re standing on your land, there’s a place of identity, and that’s economy,” Cromwell continued. “Once you know who you are from an identity perspective and as a sovereign people, you’ll be able to prosper because now you stand on a place that you can call home. You stand on land that you own. You stand on a place that provides resources for all so that we can prosper.” Since time immemorial, the Mashpee Wampanoag Tribe has called the land in Southeastern Massachusetts home. As the Tribe’s Vice Chair Jessie Little Doe Baird said at a recent rally in front of the U.S. Capitol, “My blood and bones are from Mashpee, as were my mother’s and her mother’s before her.” And with that land came the thriving economy that Cromwell talks about. “When you think about all the natural resources our Tribe had before the first settlers, if you want to use the word ‘rich’ and ‘wealthy’, we had that

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“

If we can’t even live in our homelands, if you really disperse the people away from their homelands, you pretty much kill them off.

”

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“There are EPA grants that are associated with trust lands, so when you take away trust status, that goes.” because we were able to provide for everybody,” Cromwell said. “It was a shared economy. That meant that everyone had shared wealth and nobody went hungry. Everyone had resources to provide for themselves, grow, and prosper.” The Tribe’s ancestors were there to welcome the Pilgrims when they landed at Plymouth Rock and helped to save the first colonists from starvation. The relationship between the Mashpee Wampanoag and the first European settlers is one of the oldest such relationships in the United States. But despite this exchange that places the Tribe at the epicenter of United States history, the centuries that followed saw the Mashpee Wampanoag’s tribal lands whittled away until the Tribe was left entirely landless. Thus, the fight to restore their homeland – and therein, their sovereignty – began. For decades, the Mashpee Wampanoag Tribe organized, lobbied, and pushed every lever in their power toward federal recognition. And in 2007, those decades of advocacy paid off when the Department of the Interior acknowledged their status as a federally-recognized Tribe, laying the groundwork for lands to be taken into trust, ending their long period of landlessness and giving them a place on which to exercise their inherent sovereign rights. As Chairman Cromwell testified before the U.S. House of Representatives Subcommittee on Indian, Insular, and Alaska Native Affairs, “even before our recognition was restored, we began the process of re-acquiring historical land that could be set aside as a federally-protected reservation. In the late 1970s, we embarked on a long and ultimately successful effort to work cooperatively with the Commonwealth of Massachusetts, the Town of Mashpee and City of Taunton, and other stakeholders as part of our overall effort to find land within our historical homeland that could be taken into trust to serve as our reservation.” Finally, nearly a decade after gaining federal recognition, the Department of Interior took land into trust and proclaimed it as the Mashpee Wampanoag’s reservation. “The Department’s decision finally allowed Mashpee to have a land base on which we can exercise our sovereignty and provide for our people, build homes, and conduct the business of government,” Cromwell told Congress. “Our reservation includes our Meeting House, Government Center, burial grounds and cemeteries, tribal museum, tribal offices, conservation land, and cultural recreation land, and we are working on additional tribal housing and economic development projects.” The Mashpee’s victory was short-lived, however. Shortly after the Tribe got their long-awaited federal recognition, the Department’s decision was challenged in court by local residents. This began a long legal process which is still continuing three years later. As of press time, the most recent action was a ruling by the Department of Interior on September 7 reversing its initial decision to hold land in trust on behalf of the Tribe – a decision that, if upheld, would destroy the Mashpee Wampanoag Tribe and set a dangerous precedent for Indian Country as a whole. In response, the Tribe filed a complaint in the Federal District Court for the District of Columbia challenging Interior’s decision as arbitrary, ca-

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pricious, and contrary to the Department’s own administrative decisions and clear law. “This would be the first time since the termination era that the United States acts to disestablish an Indian reservation and make a Tribe landless,” Cromwell said in his Congressional testimony. Cromwell told Native Business Magazine that the Tribe’s entire economy and well-being is tied to the trust status that is currently in a state of suspended animation. And while the Tribe fights to save its sovereignty in court, the Department of Interior’s actions have created confusion about the legal status of the Tribe’s reservation. Along with this confusion comes a wide range of damaging effects. “What does [losing sovereignty] mean for economic development?”

he said. “It’s over. It’s over. When you take our trust lands away, you take our resource management and economic development.” “Now, as a sovereign nation, we lose a component of our sovereignty,” Cromwell continued. “So the Indian Gaming Regulatory Act doesn’t apply anymore because that applies to initial reservation status and we have that. We’re building a billion-dollar facility that was going to provide 7,000 jobs, $30 million in infrastructure improvements, and $20 billion for the Commonwealth over the life of the contract, in addition to many years of prosperity to my people.” And with this project now on hold as a result of the legal challenge, the impact continues to ripple through almost every aspect of the Tribe’s finances. “Our economy is getting smashed,” Cromwell said. “Our debt services don’t get paid, which accumulates interest. In the meantime, the monies that we needed from the resort development would have spawned a portfolio of other businesses like financial services, like free trade zones with manufacture and distribution, stem cell management, and research on areas of health issues that impact our people.” With the resort awaiting clarity on the Tribe’s legal status, the opportunities that these other businesses would have provided are similarly stuck in limbo. And Cromwell says that his people suffer as a result. “What you are doing is trying to kill off a people when you take their trust lands,” he said. “Our people that are underserviced can’t get a fair shake. They can’t get jobs. They can’t have an economy. And then they get set back dramatically.” In addition to just the direct and indirect economic development opportunities that the resort would generate for the Tribe, Cromwell also told Native Business Magazine that other funds that were set to improve the lives of the Mashpee Wampanoag Tribe could be on the chopping block if they lose their trust status. “There are EPA grants that are associated with trust lands, so when you take away trust status, that goes,” he said. Another casualty could be the Tribe’s language immersion preschool and kindergarten that is adding one new grade each year. “We worked for 25 years to open up our language school,” Vice Chair Jessie Little Doe Baird, who was instrumental in bringing the school to fruition, said at the recent rally. “We teach our subjects in our own language. We seek to protect our children from social ills through our language.” The school, in particular, is a key part of the Mashpee Wampanoag Tribe’s future. In addition to helping to revive a language that had not been spoken in more than 150 years, studies have shown that children learning in their heritage languages that are multi-lingual speakers test an average of 30 percent higher in

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STEM subjects due to the cognitive advantages of multilingual language acquisition. Immersion education also provides protective factors for students against social pressures such as drug addiction, suicide (particularly for Native American children), and dropout rates. If the Mashpee Wampanoag Tribe loses its trust land status, Cromwell says, the grants that make the school possible will dry up. As a result, the school would close – another dramatic blow to the Tribe’s future. Another project – the Mashpee Meetinghouse Village tribal housing project – is also in danger if the Tribe loses its sovereignty. “Our housing development project is based on Low Income Housing Tax Credits per our sovereign trust land with 52 units that would provide quality housing for our elders and youth,” Cromwell said. In total, the Tribal housing project is set to provide a total of 140 bedrooms for a Tribe with high rates of low income and with

an average rent of $2,400 per month for a three-bedroom home. It took over a decade to reach the point of construction. If the Mashpee Wampanoag’s trust status is revoked and the land converts to fee simple, the Tribe will lose the LIHTC funds and the planned development will suffer. “We have many generations living in one household, so this would give everyone their own space which means quality of care, quality of sleep, quality of lifestyle, and quality of education,” Cromwell said. While the Tribe certainly stands to lose everything if the Department of Interior’s decision is upheld, the region and Commonwealth as a whole also stand to lose key benefits. In Cromwell’s testimony before Congress, he outlined a number of ways that protecting the Mashpee Wampanoag’s reservation lands would positively benefit the towns of Mashpee, Taunton,

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and the surrounding communities. He says that the Tribe has committed to $30 million in upgrades to the Taunton water system and roadways, $10 million per year to local first responders and Taunton city services, and $65 million to the Commonwealth for broader community development initiatives that will benefit Tribal and non-Tribal residents alike. “Once implemented, these commitments made by the Tribe to the City of Taunton will represent the single largest urban renewal effort in Southeastern Massachusetts in a generation,” Cromwell said. “The Tribe is committed to working closely with the Taunton community and Southeastern Massachusetts as a whole to bring greater economic prosperity to our shared region, for the benefit of all.” The Tribe has found allies in Congress who are working to rectify this long historical injustice. Legislation has been introduced in both the House (H.R. 5244) and the Senate (S. 2628). And the House Bill, which has broad bipartisan support from across the country, has been heard in Committee. “The purpose of H.R. 5244, the Mashpee Wampanoag Reservation Reaffirmation Act, is to reaffirm the status of the Tribe’s reservation and make clear that the Tribe is entitled to be treated the same way under the [Indian Reorganization Act] as other federally recognized tribes,” Chairman Cromwell said in his testimony. “This is a noncontroversial, bipartisan bill with the singular, straightforward purpose of protecting our reservation.” H.R. 5244 has received strong local support, including from the City of Taunton and the Town of Mashpee. The Taunton Chamber of Commerce has also submitted a letter of support to the Congressional Subcommittee. Indian Country, too, has rallied around the Mashpee Wampanoag’s cause. More than two dozen individual Tribes have written resolutions and letters in support of H.R. 5244. “If land into trust goes away, we lose all those economic and cultural advantages that help to grow our people, from housing, to health care, to education, to natural resources, to elder services, to substance abuse management,” Cromwell said. “All those things get taken away. If we can’t even live in our homelands, if you really disperse the people away from their homelands, you pretty much kill them off.” For decades, the Mashpee Wampanoag Tribe has fought to restore their homelands and provide for their people as they once did. Today, the Tribe hopes that it will reach a final resolution that will return them to those halcyon days of prosperity. It was the economy that their land and sovereignty provided that allowed the Mashpee Wampanoag to help those first settlers centuries ago and therein cement their chapter in the history of the United States – a country that is now trying to disestablish them. Today, the 2,877 citizens of the Mashpee Wampanoag Tribe are just hoping that they can continue to have their own small piece of the world where they can continue to live and prosper freely – for now and for generations to come.

PHOTO COURTESY DOYON LIMITED

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FINANCING

TRIBES

The Lucy F. Covington Government Building at the Colville Tribes combined a ramshackle campus of tribal buildings into a 153,000 square feet facility that houses 1,000 employees.

A Long

Tradition For

KeyBank

By Mark Fogarty

KeyBank “is very mindful of the communities it serves, and being a responsible provider of those services to the community.”

hen Mike Lettig attended an advanced management school at Case Western University in Cleveland in 2002, the KeyBank executive was given a big task: come up with an idea that would change the face of the company. It took him a couple of years to get his idea off the ground, but Lettig’s idea became reality in 2005 when he started a Native American Financial Services unit for the big commercial bank. It was a modest effort to start, consisting of himself and one client, who had “$20 million in loans and $5 million in deposits, or maybe it was $5 million in loans and $20 million in deposits,” said Lettig, who is KeyBank’s Executive Vice President of Agribusiness and Native American Financial Services, and is based out of Bellevue, Wash. Now the unit has a core team of six executives which can expand out to a team of 20-30 depending on the kind of deal they are doing for a tribe. And the numbers are significantly higher now: over the past three years the unit has seen $2 billion of commitments go on its balance sheet, $1.2 billion in outstanding loans, $1.8 billion in assets under management, and $900 million in deposits, as well as having tapped the capital markets for another $8 billion in capital. It now does business with more than 70 tribes, including the Cowlitz Indian Tribe of Vancouver, Wash., the Colville Tribe of Washington, the Yakama Nation of Washington, the Tulalip tribe,

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the Puyallup, the Seminoles, the Oneida of New York, the St. Regis Mohawk Tribe, the Seneca and others such as the Navajo Nation, the country’s largest tribe. Lettig’s core unit (three people in Washington, one in Michigan, one in Oklahoma and one in Portland, Ore.) has continued what’s been a longstanding commitment to Native finance. “Key and its predecessors have been involved in the Native space, as far as we can tell, for at least 60 years, probably longer.” It wasn’t a strategic focus for the bank, more a factor of geography. “We were in close proximity to Indian tribes, either with a physical presence with a retail branch office that had some folks that were interested in developing a better understanding of what was going on in Indian Country. Relationships started that way.” Starting with managing funds and opening accounts for tribes, eventually the business connections developed into lending relationships and access to capital. The unit has been supported by KeyBank management, which targets all its individual businesses for close backing. “The support of the business has always been in the DNA of this company and its predecessors,” Lettig said. KeyBank “is very mindful of the communities it serves, and being a responsible provider of those services to the community.” Many Indian tribes are within KeyBank’s footprint. They include the Northeast, Washington, Oregon, Idaho, New York. It also has a

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PROFILE

close proximity to the many tribes in California. “We’re pretty close to a major chunk of them,” the executive said. Lettig outlined a representative effort for the unit. A tribe comes to KeyBank looking for $650 million in capital. The tribe submits its financial information, and describes the project. The team quickly develops an analysis in about two or three days, recommends a structure, then brings in the credit team. A tailored solution is provided to each tribe’s project. A new administration building, for instance, might take a tax-exempt solution because it’s essential government services, so the deal would get a lower cost of capital. “You can do it on balance sheet with us, in essence it’s a direct loan from the bank, or we have helped tribes create an awareness level in the market that buys municipal paper, and have introduced Native American municipal paper as an offering, and there’s an appetite for it,” he explained. A gaming operation, for instance, can be a blend of tax exempt and taxable debt, he said. An interesting project Lettig has worked on is an administrative building for the Colville Tribe. When an administrative building burned down, the tribe wanted to spruce up a dilapidated campus of governmental offices. The solution combined all the buildings into one of 153,000 square feet that now houses about 1,000 employees. “It’s a good-sized facility,” Lettig said. What does he think is the most challenging kind of financing in Indian Country, the biggest need? “Governmental infrastructure and housing,” he said. “Roads, water, sewer, health facilities. To be able to bring in capital that addresses those ever-expanding needs, those are challenging but the most rewarding.” In housing, some tribes use a combination of federal housing block grants and augment (leverage) those from different revenue sources. Distribution from gaming, for example, can support a credit facility the tribe could deploy for housing. Another interesting deal Lettig remembered was financing jails and courthouses for the Navajo Nation in Tuba City, AZ, Shiprock, NM and Window Rock, AZ, where the deal was unsecured. “We put together a credit facility on an unsecured basis. It was a $60 million credit facility that was unsecured, to the Navajo Nation as a general obligation. We agreed to Navajo court, Navajo law, Navajo binding arbitration.” Lettig said the unsecured deal was an acknowledgement of the sophistication of the judicial infrastructure of the Nation, and its integrity, and that that was just as important as the financial capacity of the nation. The Nation issued a bond after KeyBank helped them obtain a credit rating of A stable, an unusual achievement. Key Bank has done four hefty Native debt deals in the year between August of last year and August of this year, totaling nearly a half billion dollars in finance. In June, it closed an $80 million first lien senior secured lien loan for Navajo Petroleum of Window Rock, Ariz. The company “will use the proceeds to retire its Wells Fargo-led first lien credit facility and for general corporate purposes, including the future funding of anticipated Greater Aneth Field related capital expenditures,” said the Navajo Nation. Louis Denetsosie, President and Chief Executive Officer of

Mike Lettig has run the Native American Financial Services unit for KeyBank since 2005.

NNOGC said, “The closing of this facility is a significant step toward stabilizing NNOGC’s finances after the 2014 price decline.” Guggenheim Corporate Funding, LLC will serve as administrative agent and collateral agent for the facility. KeyBanc Capital Markets, LLC served as the financial advisor and sole placement agent. This August, it financed $130 million in senior secured credit facilities for the Stillaguamish Tribe of Indians of Arlington, WA. In May, it closed $142 million in senior structured credit facilities with San Pasqual Casino Development Group Inc. of Valley Center, CA, and in August of last year, $105 million for Laguna (NM) Development Corp. Other top executives of the unit besides Mr. Lettig are Ryan Bumrungkittikul, relationship manager; Terence O'Farrell, senior banker; and Ben Rechkemmer, senior banker. Sectors KeyBank funds include Casino Gaming and Hospitality, Governmental Infrastructure and Administration, Natural Resources and Energy, Agriculture and Aquaculture, Non-gaming Economic Development, and convenience stores. Financing options include Credit Financing, Treasury Management, Investment Management, Capital Markets Expertise and Insurance and Benefits. — Research assistant Priestess J. Bearstops, Oglala Lakota, contributed to this article.

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“If You’re Not at the Table, You’re on the Menu”

SHANE

JETT By Debra Utacia Krol

“Some of the best jobs are the ones you’re not looking for—they come looking for you!” says Shane Jett. A citizen of the Cherokee Nation, Jett obtained his current role as CEO of the Citizen Potawatomi Community Development Corporation, one of Native America’s largest community development financial institutions, or CDFIs, through serendipity—not to mention the ability to work across the political aisle and experience working with foreign countries. NATIVEBUSINESSMAG.CO M

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BANKING & FINANCE

PHOTO COURTESY SHANE JETT

fter a career that included military service—he’s currently serving in the U.S. Navy Reserve—working for international business organizations and as an Oklahoma state representative from 2004 to 2010, Jett possessed a depth of business and public sector expertise. “We founded the Native American Caucus in the legislature when we discovered there were 17 of us Natives on the House floor,” says Jett. “The Caucus visited 38 states talking about economic development.” One of the messages the caucus offered: diversify tribal economies beyond gaming to take advantage of the resources while gaming revenues continued rolling in. He also worked to bring economic development initiatives to tribes. However, Jett didn’t know much about banking or how CDFIs work to support building tribal economies or strengthening tribal communities. But Jett says his experience reaching across the aisle when serving in the state Legislature led to his current role. Jett, a Republican, reached out regularly to constituents, especially tribal constituents, no matter their political views. “I didn’t just pay lip service to tribes,” Jett says; “when tribes needed me, I was there.” One of those tribal communities was the Citizen Potawatomi Nation. In October 2011, Jett received a call that would change his career direction. “I had just been interviewed by a manufacturing company that wanted me to open a plant in Brazil, where I had worked before.” “But I got a call the next morning from Rocky Barrett, the chairman of the Citizen Potawatomi Nation. He said, ‘I have a business proposal for you. Where are you right now?’” “I’m at the university.” (That would be Saint Gregory’s University in Shawnee, where Jett was teaching world geography and culture, and U.S. government classes at the time.) “I’ll be there in 20 minutes,” Barrett said. Jett says, “He asked me if I wanted to run his community development corporation. I asked, ‘What is that?’” Barrett replied, “It’s a community development financial institution.” “What is that?” Jett asked. Barrett explained the purposed of the CDFI, which is to supply financing for Native American businesses all over Oklahoma. Jett, who says he represented about 90 percent of the Potawatomi’s trust land during his term in the Legislature, said, “This is the best economic development tool I’ve ever seen for Native American economic development. Why have I never heard about this before?” “I don’t know,” said Barrett, “but do you want to run it?” Jett was intrigued, and Barrett asked him to start that day. However, Jett had to teach his class, so he went to the office that Friday, and was promptly established in his office. Jett had to jump right in and straighten out an embezzlement scandal. “They needed somebody with credibility and experience with the federal and state governments,” he says. “My job was, clean up that mess and grow the organization.” So Jett set to work. “I’m a boots on the ground person,” he says. “I learned that a lot of what I learned in international business applies to tribes,” Jett says. “Languages, cultures and histories are all different in the international realm,” he says. “And so are tribal nations.”

And, the CDFI has grown and prospered ever since. The corporation has grown from a $14 million portfolio when Jett started to nearly $80 million in revolving loans, he says. The Potawatomi’s CDFI has supported the creation or retention of almost 1,600 jobs through more than 400 commercial loans to Native-owned firms. More than 9,200 tribal citizens have received business or financial training. In fact, Jett says the Citizen Potawatomi CDC is now far and away the largest of its kind in Native America. The CDFI supports building and growing tribal economies by providing financing for a variety of projects, Jett says. “The denial of access to capital prevents families from building wealth,” Jett says. “It’s like paying rent for a home, which is like paying 100 percent interest and building no equity,” he says. But, “When we can go to a tribal CDFI or a tribal bank to fund our project, we can begin creating wealth to bring our young people back home,” he says. “We’re investing wisely in our own communities.” In fact, Jett believes that, by building a strong economy, he’s also helping support tribal sovereignty as well as giving tribal citizens the opportunity to preserve their cultures. “The only way we can sustain our languages, cultures and people is through our economy,” he says. But there’s more to this story: Jett and the Citizen Potawatomi CDC continue to innovate as they develop new ways to serve their community. Jett says that he’s received support, and great ideas, from tribal leaders. In addition to Barrett, Citizen Potawatomi Vice-Chairman Linda Capps has worked with Jett to develop some initiatives to make life easier and more prosperous for Citizen Potawatomi Nation’s families. “Mrs. Capps noticed that some tribal employees were getting their wages garnished by payday lenders, who charge up to 400 percent interest,” Jett says. “’Why can’t we lend to our employees?’” she asked Jett. To deal with the issue, Jett and his staff developed employee loan programs that include financial literacy training, so staffers can learn to better manage their money. Absenteeism was also an issue. “Some employees were having a hard time getting to work because they lacked reliable transportation,” says Jett. “So, we created the Jump Start Program, which enables employees to purchase new vehicles with a payroll deduction.” These and other such programs, such as the “credit building loan,” which helps raise credit scores before a home purchase, are responding to the community’s needs, Jett says. Jett’s work to support economic development throughout Indian Country continues to be recognized. His CDC was the first to obtain New Market Tax Credits. In September 2017, he was elected as chairman of the CDFI advisory board—the first Native person to be so selected. And in April 2018, Jett was honored with an “Executive of the Year” award from the Native American Finance Officers Association. He’s also been profiled in several business publications as an inspiring business leader. But, Jett’s most cherished accomplishment is his family. He met wife Ana while living and working in Brazil. The couple are the proud parents of daughters Raquel, 14, Esther, 9 and 3-year-old Sarah. And, Jett’s not done building one of Indian Country’s strongest economies yet: “Within two years we expect to open a credit union,” he says. “Then the tribe will have a bank, a CDFI and a credit union.”

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GROWING PAI

Native American Bank Knows Success Doesn’t Come So Easily By Native Business Staff

ative American Bank is making moves. The bank will relocate its headquarters from the 24th floor of a Denver skyscraper to a stand-alone, single-story building in downtown Denver in 2019. Increasing its visibility and services comes with a cost—including financial demands, need to increase personnel, and time and resource constraints on its currently tight-

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knit staff. “We’re a very flat organization, meaning very few of us have any back-up,” said Native American Bank President and CEO Thomas Ogaard. The only national Native-owned certified Community Development Financial Institution (CDFI) in the country, Native American Bank formed in 2001, when many of its initial tribal and Alaska Native Corporation (ANC) investors purchased

Blackfeet National Bank in Browning, Montana, with the aim of turning it into the only national Native-owned bank. The Denver-based Native American Bank, just shy of $100 million in assets, still operates the original bank in Montana. The new location will mark its second retail branch, and its first in Colorado. Today owned by 33 investors, including 30 tribes, tribal enterprises and ANCs,

INS

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BANKING & FINANCE

the bank is committed to supporting the economic growth of Native communities, though it’s not exclusive to Indian Country. Ogaard leveled with Native Business Magazine about the challenges that come with organizational growth. He also shared his vision for the expansion of Native American Bank across the country. This quote seems to sum up his perspective: “Don’t

limit your challenges. Challenge your limits.” -anonymous Who are the primary clients of Native American Bank? Native American Bank is a really a designated, mission-oriented financial institution. Our goal is to serve Indian Country and Alaska Natives, individuals and entities. Our primary clients today are tribes,

tribal corporations, Alaska Native Corporations and individuals that we serve in the lower 48 and Alaska. That has brought us business in 20 states where we’ve either completed or are in the process of completing projects. We work with all of those entities. Every deal is different, so we look for the best opportunity to create credit that will serve the borrowing entity plus the bank and our shareholders. It isn’t

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any one particular tribe or individual or entities that we are targeting; it’s Indian Country in its entirety. Like other Native entities, we seek to serve the general population as a whole. Our goal is to bring those revenue streams back to the bank for our shareholders—30 of whom are tribes or tribal corporations. It helps them as well. We have three additional shareholders who are nonprofit entities that share our mission. Together, we have 33 shareholders today. Who are your biggest clients, and what have been your largest loan deals in Indian Country? From a banking perspective, we have a fiduciary responsibility for confidentiality, although some of the deals that we have

It doesn’t seem like there have been a lot of Native individuals who go into banking, so we’re looking at ways that we can grow our own internally. done have gotten a lot of recognition. But I can tell you that we’ve been involved and partnered with other financial institutions—some of them major financial institutions—doing significant sized loans, some of them exceeding $30 million. These are significant opportunities, not only for the bank but for us to help tribal entities in Indian Country, and it has been very rewarding. We’ve done hotels and a lot of housing; we’ve done C-stores; we’ve done a lot of different types of entities or projects all over the country. We have a number of similar projects in our pipeline and are working hard to bring them to fruition. Since 20 Tribal nations and Alaska Native Corporations established Native

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American Bank in 2001, what obstacles have you faced and overcome? Well there has been a number of them. As you can imagine, it has been a challenge at times to grow any particular enterprise, especially as we have tried to do on a nationwide basis. The challenges have been on a number of different fronts. Initially, it was getting traction in Indian Country, and then you had the Great Recession that impacted banks across the board. Native American Bank was affected like many other banks. Part of it was not having adhered to the mission. My goal in coming here was to bring us back to that mission-orientation, and I can tell you that over 95 percent of what we do is in Indian Country and supporting the original mission. Other challenges as we have grown and gained scale are acquiring the necessary capital to support that, which is an additional investment in the bank. We have been successful in doing that and continue to be successful, but it seems like it’s an ongoing effort in doing that—but successful. The regulatory environment for banks was ramped up quite significantly after the recession, and for banks our size, it is a financial question as to acquiring the resources to keep up with all the regulations that we have to comply with on a daily basis. That has been one of those hurdles for us. While we have been successful in doing it, it comes with a cost. We work with our trade associations to hopefully find a common ground where we can perhaps unburden some of the banking industry—particularly banks of our size that don’t have the complexities of some of the larger banks—into a better regulatory environment that doesn’t require the amount of financial resources as it does today. That’s a pretty significant hurdle for us right now. What are the biggest challenges to growing a bank now? I think, looking forward, it’s still going to be the capital that we need to support the growth. But when I look at what we have in our pipeline for future projects, it is also finding other bank partners to help us fund some of these particular projects. Because of their size and scale, we can’t, say, take a $30 million project and fund it ourselves. It’s much larger than we would want to hold on our own, so we look for

partners. It could be one sizable bank that could take a large piece of it, or a number of smaller banks that can help us as well. For example, we just worked with two other Native banks and a fourth larger bank, and the four of us came together to do a sizable $30 million-plus line of credit for a tribe. Having three Native-owned banks in this case be involved was significant, and we needed those partners to come along in order for us to get deals like this done. We have more of those in our pipeline. We are finding partners for these deals. As word spreads it’s getting a little bit easier to talk to other financial institutions—be they Native-owned or not Native-owned, and to find partners that are willing to come in and support the projects that are going on in Indian Country. That has been a challenge and it will always continue to be a challenge. I think that, from our perspective, finding the right staff and personnel is a challenge. We are obviously geared towards hiring Native individuals and finding those individuals with the skillsets that we are looking for for some of the projected product roll-outs. To manage those types of things can be a challenge. It doesn’t seem like there have been a lot of Native individuals who go into banking, so we’re looking at ways that we can grow our own internally. It’s a challenge today and will remain a challenge into the future. What do you hope to achieve by opening a stand-alone branch? That’s a really great question. We’re today in Denver on the 24th floor of an office tower right in the middle of downtown. It’s very hard to create an identity for yourself in that environment. I think a stand-alone branch is going to serve multiple things for us. It’s going to help us build an identity in Denver as a Native-owned bank in an urban setting. We’re going into a part of Denver that could use more banking services, and it is a dynamic area that seems to be changing. Denver is a great hub for a lot of Native entities as well. We’ll be reaching out to them to see how we can support them. At the same time, we want a bank that the general population around our bank branch, as well as the overall population, will support us, be they Native or non-Native. We are definitely open to that, and we think that it can be a hub and a template for future regional locations

around the country. What kind of internal burdens does opening a stand-alone branch put on your team from a growth perspective? I think that initially there will be some financial burdens. I think that we will have to increase our staff. Paying for the physical equipment and ATMs and those sorts of things will impact us. As for the rest of what some would call burdens, I call opportunities. We’re pretty much looking forward to those opportunities—overcoming what will initially be the expense of getting this off the ground to formulating a successful business plan for this particular location, and not only serving our customers well but obviously making the bank successful as well. It’s going to stretch some of us. We’re a very flat organization, meaning very few of us have any back-up. It’s going to stretch us in terms of our own time and what we dedicate our time resources to in order to make this happen and make it happen successfully. We are looking forward to it. We’ve done a lot of things upfront to get ready for this, and we are right in the middle of our project timeline to bring this branch online in July 2019. It’s exciting for the entire staff and can’t wait for it. We’re going to have an open house and a blessing ceremony and invite the community and our board members from around the country in and have a wonderful kick-off celebration. In addition to expanding with a physical location, you’ve also grown your online banking platform. How are Native American Bank’s digital tools making banking more convenient and meeting the modern-day needs and expectations of your customers? We’ve invested quite a bit in technology. We have the full capability for anyone to bank with us no matter where they are. To-

day you can make a deposit with us at Native American Bank by taking a photo with your smart phone and uploading it on our app, and it will get deposited. You don’t have to go to your bank branch; you can sit in your living room and make a deposit. That is one facet of technology today. For someone who wants to be part of the mission, geography doesn’t matter anymore. You can do it from anywhere, which makes banking that much more competitive. We think that we have a compelling story to tell, and we will be investing in our ability to reach out and market ourselves as much as we are in bringing the physical branch to fruition. All those things are important to us. In 2018 we went through the core system conversion, and it was a major undertaking and a major accomplishment to get the support—the technical and technological support—to do the things that I just mentioned. What is your 5- or 10-year vision for Native American Bank? You know it’s interesting. I got here almost six years ago, and initially the vision and the goal was to make the bank a viable enterprise. It was under a formal agreement at the time with its regulator which really restricted just about everything the bank could do. We successfully executed on the business plan that we put together and we came out of that formal agreement in the summer of 2016, which really escalated our plans to move forward. Getting the bank to be a viable bank and to be a profitable bank was a top priority then. Going forward 5 to 10 years, I see the bank, because of our nationwide scope, having 6 to 8 regional hubs around the country from the Southwest to California to the state of Washington to Alaska to the Midwest to the Southeast. We’ve looked at the map and where we do business; we’ve looked at a number of metrics; and there

are 6 to 8 that we think will be good opportunities to put regional hubs in. Part of the goal is simply to be closer to where we do business and to our customers. I’ve been involved in banking on reservations or Indian communities for almost 40 years. You have to understand how each tribe operates with its own laws and their rules and regulations. That is a learning exercise in and of itself. We think that 6 to 8 locations is really important. The size of the bank has doubled since I’ve gotten here. I expect it to double again in less time than it took initially. I think it should be the largest Native-owned bank in the country probably by 5 to 10 years out. I think the bank can be a catalyst for creating an environment for jobs and opportunities for those who want banking careers, whether they’re at another Native-owned bank or in banking in general. We can be the incubator for that. There’s a lot of opportunity today and a lot of available jobs in banking and there’s a lot of people in the next 5-10 years who will be retiring from banking. What is was 10 years ago is not what it will be in the future. Technology is taking over, and every bank will have to keep up with it. I see technological innovation as being a key component to what we do. As long as we have the support of our shareholders, we intend to keep up with the technology and be relevant in our space—not only in Indian Country but in the banking environment overall. What sets Native American Bank apart from its competitors? What we are trying to become is an entity where what you do with your money can also be a force for good. You put your money in a bank, and it’s safe and secure. But from our perspective, we’re going to be about the social value of Native American Bank, because your deposit dollars are used to make loans. We take depositors’ dollars and take those and fund loans that we have as our primary asset base. If you can get all of your banking needs done, and at the same time your money is helping this particular mission—whether it be housing or new economic development or creating internship and management programs to educate people on the value of careers in banking—that’s who we want to be, and that’s what differentiates us from other banking entities particularly as we’re looking to serve Indian Country.

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BY DEBRA UTACIA KROL

Wells Fargo Gets Real About Corporate Responsibility &

REPAIRING ITS RELATIONSHIPS WITH TRIBES 30

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“We know that it will take some time to regain the trust of the tribes, but we are committed to doing that.”

Jon Campbell

IT’S EVIDENT THAT WELLS FARGO IS MAKING AN EFFORT TO REPAIR ITS BRAND IMAGE WITH INDIAN COUNTRY: • In 2016, the company developed and published an Indigenous Peoples Statement in consultation with tribal leaders and indigenous stakeholders. • In 2016, Wells Fargo donated $540,000 to two Native Community Development Financial Institutions.

PHOTOS COURTESY WELLS FARGO

• The bank is fulfilling its three-year, $3 million grant to the American Indian Graduate Center.

Above: Wells Fargo counts 17 banking locations on tribal lands—more than any other financial services company. Pictured: Wells Fargo’s Hialeah Gardens, Florida branch near Miccosukee Tribe Headquarters, also in Miami-Dade County.

• Most substantially, last year, Wells Fargo announced its five-year $50 million financial commitment to help address the economic, social and environmental needs of American Indian and Alaska Native communities. • Earlier this year, Wells Fargo appointed Dawson Her Many Horses, a veteran banker and an enrolled member of the Rosebud Sioux Tribe, to lead Wells Fargo's services to tribes and tribally owned enterprises. • And most recently, the corporation committed $5 million over three years to support solar projects in tribal communities across the U.S. through GRID Alternative’s new Tribal Solar Accelerator Fund.

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BANKING & FINANCE

he large financial commitments and gestures have not gone unnoticed or unappreciated. But what does this mean for corporate culture and establishing guidelines for integrity in regards to tribal engagement? Native Business Magazine had a candid conversation with Jon Campbell, head of Corporate Responsibility and Community Relations at Wells Fargo, about just that. How has Wells Fargo evolved its approach to engaging with tribes in recent years? I think for Wells Fargo, the biggest evolution has been that we thought about our relationships with tribes on a one-by-one basis. They were local relationships. Our bank leaders knew the local tribal leaders. Like lots of other things, the world changes, and as you become a bigger company, you begin to think about the aggregation of things. For example, in 1992, I moved to Phoenix, and one of my experiences was that I got to know the leadership of the Navajo Nation very well. I built four branches on the reservation. I knew that tribe; I knew the Pima tribe; I knew a few other tribes. But it was like I knew them, and my team knew them, but the rest of Wells Fargo didn’t think about the fact that we had this relationship with 200 tribes. Then I think that, at least for Wells Fargo, what happened next was the gaming space in Indian Country took off. We had a few people in the company who began to do more things with an aggregation of tribes. I think what caused us to think about this more holistically was unfortunately when the DAPL [Dakota Access Pipeline] pipeline erupted and became such a challenge for so many people, and it was such a tragic situation. We said that we can’t think any longer about tribe by tribe; we have to think about how Wells Fargo represents itself broadly. Tribes are all different, and they have their own direction, but I think for Wells Fargo to think about this collectively was a big deal. Out of that came the 50 million-dollar commitment; out of that came hiring people who specialized in this. When you begin to aggregate things, you start to make a difference, and start to think about it more broadly instead of a one-off. [We began] thinking about it more broadly as a large community, and thinking, what can we do collectively across that broader community? Wells Fargo provided financing for the controversial Dakota Access Pipeline, which is opposed by some tribes. How has Wells Fargo taken action to remedy its relationship with Indian Country, beyond committing $50 million over the next five years to help address the economic, social, and environmental needs of American Indian/Alaska Native communities? The 50 million bucks was a big deal. That’s a big philanthropic commitment. If you had been in those meetings that I was actively a part of and helped get started, it was exactly about that. It goes back to this aggregation. One of the things that I noted was [our] complete inconsistency. Dealing with sovereign nations is a real challenging situation, but we would have attorneys who would interpret one thing one way in Arizona impacting the Pimas, and another attorney who would interpret something differently that would impact the Rosebud Tribe in a different way in the Dakotas. The same would happen to our credit teams who were approving loans to the tribe for everything from gaming to other enterprises. One of the things I noticed was that you can’t have inconsistency.

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We needed to have a common Wells Fargo approach to legal and credit matters. You could have a credit officer who has no experience with a sovereign nation, and if a transaction comes through and they don’t have the experience, they won’t know what to do. Whereas if you have someone who has worked with sovereign nations and worked with tribes, you wouldn’t have that fear. It’s a big community, and having people with different levels of awareness, different levels of familiarity, really created this inconsistency in how we treated the tribes. That’s just wrong. I think that we needed to get our act together and have a more consistent approach to things so that we can deliver more consistently and more effectively to tribes from Washington state to Florida. That’s not going to happen overnight; that’s going to take a while. That’s the sort of thing that Dawson [Her Many Horses] is helping us do. Patty Juarez is helping us do that. On my team, I have one person who has really become an expert on philanthropy in Indian Country. You start to create content experts that we can spread across the whole enterprise who can provide a consistent, better experience for the tribes. Has Wells Fargo established formal best practices or an engagement policy to address how it handles relationships with tribes? How does this corporate recalibration and employee education look internally? To be completely candid, we’re still having to build this infrastructure that I described. We needed a coordinator. One thing I’ve learned over my years is you usually get best results when someone is accountable. We had a lot of people who were engaged, but nobody on a daily basis to really help coordinate, convene or collaborate. That’s where I think people like Dawson [Her Many Horses] are really helping us do that, and I think that over time, we’re going to end up with a number of people who have expertise in this space, and through that kind of expertise we’re going to deliver more effectively. One of the things that we learn in life is that disappointing, sad events do help us get better. One of the outcomes that came out of our activity in DAPL was that we did create and publish, for the first time, an Indigenous Peoples Statement. We worked closely with other tribal leaders as well as other indigenous stakeholders and their representatives to help us figure out how our decision-making for projects and where our financing might impact Native American or Alaska Natives. That’s requiring a lot of training.

BANKING & FINANCE

PHOTO VIA BUSINESS WIRE

For example, in Minnesota there is a pipeline that may be rerouted, and it actually doesn’t cross tribal lands, but it’s near tribal lands, so several tribes in Minnesota care quite a bit about where the pipeline may be rerouted to. One of the things that we learned, and one of the things that we put in the Indigenous Peoples Statement was in cases where we might be a lender and we know that there is tribal concern, even though we’re not the pipeline company, we’re going to the tribes to talk about their views. That’s a very big shift; that requires a different style for us. We didn’t do that in the case of DAPL. We were not involved with the tribes directly before the activity took place. That’s the sort of best practice change that we’re bringing forth. We’ve been meeting with those potentially impacted tribes without the pipeline company there— to seek their input, get their views, and hear their concerns. Hopefully that would be a best practice where we take a more direct engagement ourselves to help us understand the tribal concerns. That was a result from our learning from DAPL and our Indigenous Peoples Statement. It's just being respectful of one another and understanding each other’s opinion. It’s a fairly basic step but one that I think people appreciate. People appreciate when they can share their points of view, and I think that we learn from it. It impacts how we work with our customers. In 2016, Wells Fargo was accused of coercing tribal members to open bank accounts they didn't need as part of an aggressive sales campaign. How has Wells Fargo shifted its approach to handling accounts with individual tribal members? We had sales goals, and they worked as a positive incentive for our sales teams for a little while, but at some point, they became negative and people started feeling pressure. One of the first things we did after the impact had become clear was to take away those sales goals. That was step one. Step two was that many of our managers had learned to manage by using those sales goals as their primary tool for management. Without those sales goals, it changed what our managers needed to be capable of. Frankly, that meant that a number were not right for the way we wanted to do business going forward. We shifted from a sales model to an advice and service model. It takes different skillsets to be highly effective at one or the other. We’re still making the changes. The other change that occurred was changes in products—products that really do favor the consumer as opposed to Wells Fargo shareholders. One of the other substantial changes would be in one of the other most hated parts of our business and that is in the overdrafts space. People hate the fees that have historically accompanied overdrafts, so we actually made quite a few changes in attempting to try to benefit the consumer. For example, we introduced a new product called Overdraft Rewind and basically if you have a form of direct deposit at Wells Fargo and you overdraw your account but we know that your deposit would come in, then we wouldn’t charge you those fees. That has impacted our revenue line substantially, but it has benefited countless consumers. We do a better job of warning the consumer that their account is nearing a point where they are out of money. People are really taking advantage of that. To recap the two main changes: we’re shifting from a sales model to an advice and service model and reforming our overdraft policies. We have some other exciting products coming. We have one called Greenhouse, which is a very neat product that will help con-

sumers even more in managing their money and preventing overdrafts. We’re dedicated to developing products that are completely designed to benefit the consumer while giving up some of our own revenue. How much progress has Wells Fargo made against its philanthropic and funding goals set for Indian Country? We announced our five-year $50 million financial commitment almost exactly a year ago. We’ve already written checks and done distribution of 6.5 million dollars to 25 nonprofits. That’s a good start. We’ve actually approved almost 13 million dollars so far this year, and those are going to be funded over the next few months. When you start something brand new it takes a little while to get up and going. We knew that it would be a bit of a hockey stick in that, of the 50 million dollars, more of the money would probably go out at a later time. But I’m actually pleased that we’ve approved $13 million of grants this year. One of our grantees so far was First Nations Oweesta Corporation. We gave them a $500,000 grant to launch a home down payment assistance program to help home ownership for Native Americans. They’re going to do $5,000 to each tribal member for down payment assistance, and we think that’s a great program. We know that home ownership on the reservation is challenging. That was a fun one. Another one that we are really excited about is a group called GRID Alternatives, and they are the national leader in solar technology and training to help underserved communities. We’ve had a history with Grid. This year we announced that we are committing $5 million over the next three years to GRID to support their new program, the GRID Alternatives Tribal Solar Accelerator Fund. When we made the announcement a year ago, we thought that this was a great way to catalyze the growth of solar on tribal lands. We’re really excited about that one. The first tribe to benefit from the program was the Spokane Tribe in Washington. I think we have another build coming up with the Los Coyotes Reservation in southern California. Not only has the money been committed, but it’s actually touching the ground. We have one going and the second about to start. Those are a couple of examples in year one that I feel good about and am pretty darned excited about. If you could leave Indian Country with one last message, what would it be? I think it’s a pretty simple message. We continue to learn how to serve parts of our customer base better each year. I would say that we undeserved our tribal relationships, and we didn’t give it the attention that was necessary. What happened with DAPL has given us a resurgence in seeing the power of what the tribes are about and given us an incentive to better serve the tribes. We know that it will take some time to regain the trust of the tribes, but we are committed to doing that. I think that we have advantages over our peers in that we are based in the West, and there seems to be a larger group of tribes in the West, so we have a geographic similarity. We have branches on reservations and that makes us relatively unique, and I know that over the years, my relationship with the Navajo Nation was the favorite part of my time in Arizona. I loved to go to the president’s inauguration, and sit on the parade ground waiting for the inauguration, and visiting our branches on the reservation. I think that regaining that excitement about those relationships and putting our efforts into that just seems like the right thing to do.

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‘The Woodlands Way’ A Tribally Owned Bank—With $195 Million In Assets and Growing— Shares its Recipe for Success By Native Business Staff

n 1996, the Mille Lacs Band of Ojibwe purchased a local bank in Onamia, Minnesota, becoming only the third tribal nation in the United States to own a bank. The tribe renamed it Woodlands National Bank, and it became the first tribal-owned bank to be granted a national charter. At the time of purchase, the bank counted $17 million in assets. Before the turn of the century, assets substantially increased to $25 million, prompting Mille Lacs stakeholders to open more branch locations. Today, Woodlands’ seven branches have combined assets of $195 million. Woodlands National Bank specializes in small business loans, mortgages and consumer accounts. Whereas some national, non-tribally owned banks are wary of

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lending to individuals or businesses on reservations due to a lack of understanding of sovereign rights, combined with other compounding factors like poor or nonexistent credit histories, Woodlands National Bank is expanding economic opportunity for tribal members and entrepreneurs. Woodlands is meeting Native American demand for a broad range of financial services on and off reservation in Minnesota and in neighboring states. For instance, Woodlands opened a bank in the Phillips neighborhood of Minneapolis, thanks to the support of several nonprofit organizations. “This is a low-income neighborhood with a high concentration of Native American residents that had virtually no access to traditional banking. This branch now serves approximately 800

PHOTO COURTESY WOODLANDS NATIONAL BANK

“One of our core values is to cultivate long-term relationships with our customers, so that we’re partnering with them in their success,” said Sarah Oquist, Board Chair.

BANKING & FINANCE

PHOTO COURTESY SARAH OQUIST

Sarah Oquist, Board Chair, Woodlands National Bank

Pictured: The original Onamia, Minnesota, branch, purchased by the Mille Lacs Band of Ojibwe in 1996. Today, Woodlands National Bank counts seven branch locations across Minnesota.

customers with traditional checking accounts, personal loans and home loans,” Ken Villebro, President and CEO of Woodlands National Bank, told Native Business Magazine. That said, Woodlands maintains a strong presence in urban areas to stay competitive. “Early on, we operated strictly in small rural communities which made growth a challenge. We made the decision to focus more of our growth strategy on developing small business banking customers in the Twin Cities market,” Villebro said. Over 20-plus years, the bank has expanded its resources to bring the benefits of full-service banking to small businesses—such as cash management, remote deposit, ACH, electronic wire services and more. For personal accounts, Woodlands offers checking and savings accounts, personal and auto loans, retirement accounts, and more. Woodlands National Bank is also one of the largest originators of HUD 184 mortgages in Minnesota, and the bank obtained an “Outstanding” rating in the Community Reinvestment Act. The Woodlands Way Beyond earning the respect of customers as a trusted advisor in financial and related matters, Woodlands National Bank is committed to going the “extra mile” to provide exceptional customer service. The bank refers to its personalized service as “The Woodlands Way.” Too often, customers at mainstream banks are talking to someone new each time they need assistance, explained Villebro. “Our management team has been with Woodlands for over 18 years on average and our entire officer team has been with Woodlands for over 13 years on average. This provides for continuity of service that cannot be found at most banks,” he said. In today's banking environment, many institutions have similar products and rates, which means the only defining difference between banks can be levels of service, and a deep understanding and respect of concerns and needs specific to Native Americans. “Because we’re tribally owned, we understand what it’s like to make loans to tribes or tribal entities or Native homeowners. I feel like we’re more sensitive to the unique needs of our diverse clients and business owners,” said Sarah Oquist,

Chair of the Board of Directors for Woodlands National Bank. “We’re a community bank. One of our core values is to cultivate long-term relationships with our customers, so that we’re partnering with them in their success.” A founding member and CEO of minority- and women-owned Sapientia Law Group, Oquist is the first female and first Mille Lacs Band member to chair the Woodlands’ Board. Oquist underscored that providing jobs within local communities is important to Woodlands National Bank. “We have 51 employees, five of whom are Native American. We’re always looking at [ways to enhance our] succession planning and training. How do we create environments for people to learn and grow and enjoy their work? Our team will be best able to provide good customer service if they feel like they’re being treated well, too,” she told Native Business Magazine. Online Banking Among the ways Woodlands National Bank is growing its customer base and building loyalty is through online banking services. “Technology is ever-changing,” acknowledged Oquist, adding that Woodlands aims to offer the latest online banking services to clients. “We’re always making sure we have the right vendors and technology to provide those [online] products; and also educating our team, so that they can support those products; and then educating the customers, so they know how to utilize the products. We believe one of our biggest opportunities is to provide online services that successfully support our customers in their banking needs.” In addition to the benefits of receiving or making direct electronic deposits, customers of Woodlands National Bank will soon have access to even more online banking tools. “We are focused on rolling out expanded online services including more individual access in the coming months and online account applications and personal loan applications to Minnesota residents in the coming year,” Villebro said. It’s continuous upgrades like this that keep Woodlands sustainable and competitive in today’s market. “I think one of the main goals for me is to continue to grow Woodlands National Bank in a very healthy way, and to continue to improve service to the various communities where our branches are located,” Oquist said.

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POINT OF VIEW

Respect Indian Country, RETIRE “RENT-A-TRIBE”

t is sad in this day and age that some people believe American Indian tribes are incapable of addressing their people’s basic needs. For decades, tribes have created businesses to serve their citizens and the public good. But it seems that when tribal businesses succeed, competitors and critics undermine them by asserting that Native American tribes could not possibly have created a successful enterprise themselves. Those who oppose the idea of American Indian tribes operating successful businesses that compete with non-tribal rivals sometimes use offensive terms to create the illusion of nefarious conduct. One of the ugliest assertions is that a tribe’s success occurs by “renting” itself to non-tribal members, who abuse it for iniquitous purposes. The term “rent-a-tribe” grossly misrepresents American Indians, their intellectual abilities, and business acumen. To understand these attacks, it is helpful to know why tribes operate businesses at all. American Indian tribes are sovereign; they have the inherent authority to govern themselves free from outside interference. Sovereignty is acknowledged by the federal and state governments through treaties, laws, executive orders, and intergovernmental agreements, and confirmed by centuries of United States Supreme Court and lower court precedent. As sovereigns, American Indian tribes deliver services to their citizens and communities through government-run agencies, just like any other government. But unlike their non-tribal counterparts, American Indian governments often cannot raise enough tax revenue to fully fund the essential government services necessary to support the needs of their tribal citizens. This is particularly true for American Indian tribes located in remote areas. Instead of taxing citizens to pay for a bridge, community building, or meal program for hungry seniors, tribes’ funding comes from their businesses. (Most Americans are familiar with tribal casinos but are surprised to learn tribes operate businesses in energy, government contracting, retail, hospitality, and fintech.) The term “rent-a-tribe” originated in gaming, where attacks started as soon as tribes became a competitive threat to non-tribal casinos. Opponents suggested that tribes’ practice of hiring capable vendors to provide services related to casino operations was akin to “renting” sovereignty and detracted from the tribal ownership of the business, even though many non-tribal entrepreneurs engage in identical outsourcing practices when starting a new business in a regulated industry. Today, tribal gaming has arguably reached its economic peak in Indian Country. Many tribes cannot rely on casino revenue to

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meet the needs of their communities, which is why they started looking to the internet. Online tribal lending is a key economic engine for American Indian tribes thanks to rapid technological innovations, the ability of consumers to engage in business with geographically-isolated tribes through the internet, and tribes’ competitive advantages. When tribes make the commonplace strategic decision to outsource call center services, direct mail, or software development, opponents of fintech and online government-to-consumer lending accuse tribes of so-called “rent-a-tribe” schemes. Echoing similar gaming attacks from 30 years prior, these critics show continued ignorance of tribes’ rights as sovereigns. For example, as elected Chairman of the Lac Vieux Desert Band of Lake Superior Chippewa Indians, I am responsible not only for the operation of our Tribal government, but also stewardship of our culture, our lands, and our way of life. Alongside our Tribal Council and with a heavy dose of entrepreneurial passion, we operate businesses that provide jobs for the region, strengthen our tribal economy, and fund important social and cultural programs. We are the largest employer in our area. Over forty percent of our Tribe’s general fund is generated from our government-to-consumer lending business, and revenues generated by tribal lending improve cultural preservation efforts, housing, health care, law enforcement, elder services, education, and infrastructure in and around our isolated reservation in Michigan’s Upper Peninsula. We are not alone—dozens of tribes across America operate successful government-to-consumer lending businesses. We understand that business is competitive, but it is reprehensible when critics imply that we are unsophisticated or have been “suckered” into business relationships. The suggestion that my Tribal Council and I (or the governing body of any tribe) would place our sovereignty for sale to the highest bidder is deeply offensive. Each of the 573 federally-recognized American Indian tribes has the freedom and authority to engage in legal business operations (like tribal lending). At a time when America needs greater civility and honest discourse, a term like “rent-a-tribe” should be retired permanently. This term is a shameful relic of the past. American Indian tribes’ pursuit to operate businesses to generate revenue and ensure their self-sufficiency and self-determination should be applauded, not villainized or discounted. James Williams, Jr. is Chairman of the Lac Vieux Desert Band of Lake Superior Chippewa Indians of Michigan.

PHOTO COURTESY JAMES WILLIAMS, JR.

By James Williams, Jr.

FINANCIAL LITERACY MADE EASY By Native Business Staff

NAFSAâ&#x20AC;&#x2122;s online playlists serve as a primer to deeper financial understanding

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e’ve all been there, Googling “how

to get a car loan” or “how to refinance a mortgage” or “how to climb out of

PHOTOS COURTESY NAFSA

credit card debt.” And we all know that finding a trustworthy resource among pages and pages of Google results is a lost cause. What if there was an unbiased source of streamlined, educational information, all in one place? Enter the Native American Financial Services Association's (NAFSA) Financial Literacy Program. It may sound serious, but it’s incredibly accessible and digestible. It can even be fun. And while you may want to pull the covers over your head and ignore that glaring debt or the need to save for retirement, it’s not going to go away until you face it head on. NAFSA executives want you to know that these tools are incredible primers available from the privacy of your own home, or wherever WiFi is accessible, at nafsa.everfi-next.net. “With this program, we’re really just trying to demystify finances. I think it gives you a starting point,” said Mika Leonard, NAFSA’s chief operations officer (COO) and a member of the Miami Tribe of Oklahoma. “It’s a great tool as you go through different phases in your life. It’s extremely comprehensive and less threatening than Googling. It’s a great, basic starting point for individuals who want to know more about their finances.” So many people weren’t taught financial literacy growing up. “I was never sat down in a classroom and shown these type of [financial] modules,” shared Olivia Hoff, Digital Marketing Manager at NAFSA. “A person of any age can sit down and watch these and get a good knowledge base for moving forward.” Teresa Guzik, Communications Manager at NAFSA, added: “Our modules are easy to use; they’re bite-size. We actually have interactive tools where you can put in the amount of debt you want to pay off over a certain period of time, and it will give you how much you need to save.” Native Business Magazine spoke with these three NAFSA executives—Leonard, Hoff and Guzik—about each of the six playlists in NAFSA’s Financial Literacy Program.

Business 101 The Business 101 playlist is a phenomenal module to “roll through one by one,” said Leonard. Nothing contained in this series will be information that an emerging or new business owner wouldn’t find useful, she said. The Business 101 series provides the tools you need to build and maintain credit, develop a business plan, and advance your current project. For instance, the playlist breaks down short-term and longterm financing options. Lines of credit and business credit cards are the two primary options for short-term financing. For large purchases that take a longer time to pull off, the playlist recommends termloans and explains the collateral required, or unsecured loans available to customers

with strong credit history. The other route to take is commercial real estate loans, secured by real estate collateral, such as an office building or piece of land. “I think Native Americans have always been entrepreneurs in one way, shape or form. I think the idea of sole proprietorship, entrepreneurship and having your own business really resonates for a lot of people, whether they have a specific type of artistic skill or trade. For a lot of people, owning and managing their own business is a dream. But as we know, there are steps you have to take to be successful. Being good at your craft isn’t enough,” Leonard said. “I think this playlist does a really good job at giving you those core foundational items—things you would need to do before you even approached a bank

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about getting a loan. If you don’t already work in the financial services industry, all of the features as they relate to banking are not things just anybody would know. They’re not that easy to navigate. We don’t want folks to walk into a bank and not feel like they have the information they need. I think this playlist is really great, and there’s fantastic information for anyone thinking of starting a business. I think for people that are looking to expand their business, our section of obtaining and using credit is really helpful.” Finances 101 Gaining sovereignty over your personal finances can transform your life. Yet the process can be daunting. NAFSA’s Finances 101 series helps users create a budget; and learn the ins and outs of savings and checking accounts, credit cards, as well as explore mobile payment options, and more. “I think that the Finances 101 is probably one of our most important tools. I think finances can be really scary, particularly if you don’t understand them,” Leonard said. “People don’t discuss finances, even with parents or relatives. It’s a difficult conversation. And parents may not have all the answers. A lot of people don’t have that support group around them. Young people, I think especially, don’t really understand credit card debt or student loan debt. Having a module where they can understand what credit cards are, why you need to not just meet the minimum payment, but why you should pay off your credit card every month just because of the interest rates… I don’t think that’s intuitive, and I don’t think the average person knows that.” Olivia Hoff drilled home the fact that the banking industry is modernized, and a digital financial literacy tool is a great component to that. “I was thinking the other day about how people used to balance their checkbooks, and no one that I know of does that anymore. It’s all on my phone, through apps. I’m paying my credit card off through an app. I’m looking at my banking account through an app. Banking isn’t behind the times anymore, “ Hoff said. NAFSA executives agree that understanding credit cards is one of the most potent focuses within the Finances 101 playlist. Too often, young people fall into

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“There are some choices you can make at a very young age that can have a tremendous impact on your future finances,” Leonard said. “I don’t think we have to be scared of those things. We just want to make that information available to people.” a debt trap, because they’re receiving credit card offers with confusing disclaimers. “You think about the amount of paperwork you get with credit card statements, all in fine print. It’s clearly written for a lawyer, and it’s really hard to understand. It’s easy to think—I’m swiping this card, and not knowing where that money is. It’s borrowed funds. I think it’s important for people to understand what interest is, how interest is calculated, and how your interest can suddenly jump by missing a payment even by a day—how much your interest can go up overnight and put people into really detrimental situations at 18 or 19 years old. Again, we want to have financially educated young people who won’t be spending their adult life paying off a credit card that they opened when they were 18 or 19,” Leonard said. Major Life Decisions Where does one turn for straight-forward, unbiased information about obtaining a car loan, buying a first home, or refinancing a mortgage? NAFSA’s tool on Major Life Decisions offers a great introduction to what might seem like a big step in life. “I think for young people, I know for me at least, I didn’t know what a mortgage was,” Teresa Guzik said. “I don’t have a relation to a mortgage; I’ve only ever rented. Just going through this module is really helpful for me to understand what a mortgage is, how I might have to use it in the future. The mortgage refinancing calculator makes it easy to gain a grasp of what you’re paying now, and what you’d be paying to refinance.” Leonard added: “Often when we search for answers online, where most of us go for information—because of ad words and how savvy all the digital marketers have gotten, we are so frequently getting ads

that may not necessarily be providing us with a base of information, which is what we want.” This playlist delivers quick and easy information, and handy calculators allow visitors to enter exact numbers to better inform their financial decisions. “This is about: Am I going to be comfortable paying this monthly amount for 30 years? Having some hard numbers in front of you is really helpful. Much like our other tools, this allows people to then go to their financial institution with informed questions, specific questions, thus making them a more informed consumer, and that’s ultimately what we want,” Leonard said. Looking Into the Future NAFSA’s Looking Into the Future playlist goes in-depth across topics. Visitors have the option to click on subject matters of personal interest—from planning for retirement, to managing your investments and collecting social security, to much more. These areas are often topics people want to avoid. They might be seen as taboo, or people don’t want to admit they’ll get older. “The fact of the matter is, we’re living longer, we’re working longer, and people are needing more and more money saved in order to comfortably retire,” Leonard emphasized. She continued: “This is a place they can go on their own, look at the information, and then basically dig deeper if they want to, having some of the terminology and understanding some of the initial nomenclature. …I think this is about helping folks be mindful of the kinds of things they will need to consider at some point in their life.” After all, financial logistics are confus-

MONEY

ing. “Let’s face it. You would really have to be a professional in one of these settings to understand all of this. We want to give people a place where they can take the information in on their own time, at their own pace, in their own home, and not feel completely overwhelmed by it,” Leonard said. The calculators are a great resource to reference throughout one’s journey. Visitors can continue to plug in their numbers. “Once they get a new job or a pay raise, they can plug in their salary and those new numbers to see what they should be saving for retirement and how to adjust their lifestyle,” Guzik said. Protecting Our Elders Sometimes, the need to care-take can feel “all of a sudden,” but it really shouldn’t be that way, “because we all know aging is inevitable,” Guzik said. Rather, planning to hire a caregiver or become a caregiver can look like an active decision. “There are some frank conversations you need to have with your family members. Elder fraud is something you’re going to need to talk to your grandparent or parent or loved one about. That can be a difficult conversation,” Guzik shared. When hiring and saving for a caregiver, it’s important to find someone that meets your specific needs. When becoming a caregiver, it’s critical to understand legal caregiver roles and how to plan ahead. “I think, especially in Native American, Indian Country communities, family and taking care of elders are a huge deal and engraved in the culture. Planning for that, not only mentally and physically but also financially, with your support group, and deciding how you’re going to proceed with that, is extremely important,” Leonard emphasized. Youth Financial Toolkit The Youth Financial Toolkit help young Native people navigate the murky waters of banking basics, credit, saving for higher education and more. Developing good financial habits during youth is vital to long-term financial health. It’s important to recognize that it’s never too early or too late to begin growing or repairing one’s relationship to one’s finances. “If you ask any financial expert, they’re always going to say, ‘start now,’”

Leonard said. “The banking basics is one of my favorites, and also saving for higher education, because many people, their parents aren’t going to pay for college. They need to think about how much they can save, how much they can take out in loans, and how they’re going to use that credit and those basics wisely going forward. As we

mentioned, the decisions you make while you’re young can have a long-lasting impact on your finances and your credit. Just going over these can make a big impact on the future,” Leonard said. Learn more about NAFSA’s Financial Literacy Program at nafsa.everfi-next.net.

NAFSA launched its Digital Financial Literacy Program in September. The financial literacy modules provide easy-to-understand information to help people better understand their finances and make more informed decisions. To complement this program, NAFSA is offering tips, information and news related to financial literacy in blog posts. Here is one blog post by NAFSA that delivers guidance on how to use credit cards wisely: Credit cards are a great financial tool for people and offer many freedoms. While using a credit card, it is important to be aware of the potential risks and benefits. Every time you use your credit card to make a purchase, you essentially borrow the money from your credit card company. Typically, you must pay the company back, partially or entirely, the following month. The Pros:

The Cons:

• Building Credit – Using and paying off the balance on your credit card will build your credit history and help improve your credit score.

• Diminished Credit – Missed payments or late bills can severely damage your credit history.

• Protection – Many credit cards provide protection plans from fraudulent purchases if your card is stolen or compromised.

could lead to increased impulsebuying and irresponsible purchases.

• Interest – If you carry a balance on your credit card past the due • Convenience – You can purchase date, you could pay interest on an item and pay for an item later the amount borrowed. or over time. • Too Easy – The ease of purchasing

Paying the Minimum – As NAFSA has mentioned, a perk of having a credit card is the ability to purchase bigger ticket items and pay for them over time. Many people only pay the minimum balance on their credit card, or some amount lower than the total, to eventually pay back the full balance when they are able. While paying the minimum can be convenient, it’s smart to consider the total cost of your purchase if you pay over time. Credit card companies can charge high interest rates which only compound with time. For an in-depth look at how and when to use credit, including a credit card bill breakdown and minimum payment module, check out the Credit Use section of NAFSA’s Financial Literacy Program. D ECE MB E R 2 0 1 8

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BEST BUSINESS ACCOUNTING PRACTICES FROM SAM OWL

By Lynn Armitage

amuel T. Owl Jr. would never call himself a numbers guy, even though he’s been a certified public accountant for more than 14 years. “There is an interesting level of theory behind accounting, and I am big on finding the most efficient processes,” says the 39-year-old manager in the business operations and tribal services practices at CLA (CliftonLarsonAllen), a national professional services firm in the Washington D.C. area. “It’s not all about numbers, numbers, numbers.” An enrolled member of the Eastern Band of Cherokee Indians, Owl says he is the only CPA from his

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tribe who is under 40. “I got into accounting because Native accountants are so few and far between,” and now, he explains, most of his time is spent serving CLA’s more than 50 tribes and tribal enterprises with various financial matters, including financial department assessments, systems implementation, audits, outsourcing and consulting. Owl offers a wealth of experience in the accounting field, having worked for two of the Big 4 accounting firms PwC and Deloitte. He is also the former Chief Financial Officer for the National Congress of American Indians.

ACCOUNTING / AUDIT

Who better to offer the following list of accounting tips and best practices to other Native business owners than this wise, young Owl? 1. Hire the right people with the right skill set. It’s the No. 1 priority, says Owl. “Make sure you have a qualified staff with the right credentials or ways to access professionals possessing those skills.” If this access is not available, he suggests creating a mentorship program to develop these professionals or tap into other resources, such as telecommuting or outsourcing. “Outsourcing is a big part of the industry right now,” he says. While it is not necessary to have a CPA at every level of your organization, Owl believes that having a CPA at the top is the best practice and will give you time to develop the rest of your staff. 2. Create lean policies and procedures, ideally separately. While these systems are usually referenced in the same breath, Owl recommends that companies establish policies and procedures separately, as one does not always inform the other. “You don’t want to create bottlenecks or any unnecessary steps that will lead to inefficiencies in your process,” he says of the main goal. Owl adds that companies should revisit policies and procedures on a regular basis, always thinking about the desired outcome and best practice. 3. Choose the right accounting system. You want something modern that will allow you to connect to other utilities to help create efficiencies, says Owl, who likes working with cloudbased systems. “Automation is a big, big part of our industry and economy right now, as it helps feed more real-time data into your accounting system and gives you access to other professionals.” He suggests selecting a system that fits your industry or organization, one that offers agility and flexibility.

PHOTO COURTESY SAM OWL

4. Stay current with changes in accounting guidance and regulation. It is important to always stay ahead of these changes, as you want to know how they will affect your future financials. “For instance, a change in accounting principle could kick you out of compliance with your debt,” Owl explains of what is at stake. Many resources are available to accounting professionals to keep them up to date on industry regulations, such as webinars and round-tables hosted by professional service firms. For Native businesses, Owl recommends NAFOA, the Native American Finance Officers Association. “It is a really good source for information. They are constantly monitoring regulation changes.” 5. Set up a system of internal controls and use internal audit departments. The key is to prevent fraud and misstatements in your financial reporting, and it all starts at the top, says Owl. “The tone at the top will set the organization on the path to having the right internal controls and going through the right practices.” One crucial practice that he recommends is reconciling accounts on a monthly basis. “That way, you are able to identify errors earlier and if there is fraud, you would be able to recognize it right away.”

6. Identify key performance indicators and dashboard them. Accounting is a numbers game, and by definition, not a very visual medium. But for CPAs, like Owl, visualizing key accounting metrics through “dashboarding” helps summarize a lot of data on one page. “Dashboarding gives you the visual information to make the right decisions with real-time information,” Owl explains why he frequently uses this financial reporting tool that helps aggregate data. Because key performance indicators should be industry-specific, Owl suggests using dashboards throughout an accounting organization, at every management and staff level. “We also set up dashboards for our clients, as well.” 7. Engage the right consultants and auditors. They are a critical part of any financial team, says Owl, who advises that you choose strategic partners outside your organization who know your industry very well. “Make sure you are engaging with, and have access to, subject matter experts who can grow with you.” 8. Run background checks on key employees. While this important recommendation applies to nearly every business, it especially holds true for employees who handle sensitive financial affairs for individuals or corporations. “Know who you are hiring. It’s a basic, key practice,” says Owl. Background checks on senior management performed by reputable companies will help you “make certain that you have people of integrity and ethics in your C-level suite.” 9. Know your audience and stakeholders. Who you report financials to can run the gamut, from a sole proprietor to a small business to a large corporation. Owl says it’s important to really understand who your clients are, as they all have different financial reporting needs. “For instance, there are a lot of small organizations that don’t require an audit. Maybe they go to a bank for a loan or mortgage building or some sort of financing and don’t need a full audit. There’s no use in expending resources on things that are not necessary at that point in time.” 10. Invest in organizations that hire and support Native financial professionals. “It’s good for Indian Country and it’s good for Native businesses,” says Owl, who believes that Native CPAs are underrepresented in the financial industry. “I think it’s because Natives are not introduced to these careers early on. When you think about protecting tribal sovereignty, most people think about being a lawyer. They don’t understand that protecting tribal sovereignty might also mean protecting the financial resources of the tribe or tribal enterprises.” Owl says the need is greatest for tribes in rural areas, as they don’t always have the broadband infrastructure to tap into technologically advanced accounting systems. “We hear from tribes all the time that they are looking for accounting professionals. It’s definitely a niche with a lot of room to be filled.”

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Native CPA Firm

DEFENDS Tribal Financial Sovereignty

hat every tribal government should know about audit preparation is simple: it can bolster a nationâ&#x20AC;&#x2122;s sovereign immunity. Thatâ&#x20AC;&#x2122;s because getting the financial numbers in order before the auditors arrive makes it far less likely a tribe

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will have an audit finding that leaves its funding challenged, according to Sean McCabe, a Native certified public accountant. McCabe, who heads the Albuquerque-based McCabe CPA Group, has made Native accounting and audit prep the focus of his business (the group

has also started doing actual audits in the last year or so). A Navajo, he works almost exclusively for Native governments and their entities like housing authorities, schools and casinos, and he has a passion to hire and train Native accountants. He also has some advice for those

PHOTO VIA RAWPIXEL.COM FROM PEXELS

By Mark Fogarty

ACCOUNTING / AUDIT

PHOTO & GRAPHIC COURTESY SEAN MCCABE

“If that takes me a little more time, and a little more patience. Then I’m going to do it. I’ll take the Native over somebody else every day of the week.” who think they need a big brand name like KPMG on their audits: save yourself some money. You’re paying for a lot of partner salaries and overhead, he feels, and audits are basically a commodity that can be done just as well by smaller firms like his. “We have to all follow the same procedures,” he tells Native Business Magazine. “There’s no need to buy the brand name.” He prides himself that his firm is agile and technology-responsive so overhead is small. Physical office space is shared space that is only used to meet clients, with a lot of data stored in the cloud and people working from their own homes. “We have embraced technology completely. We’re very mobile. Technology is an equalizer,” he feels. “At the end of the day I’m just a Native guy who loves to help our people and utilize as many Native American people as possible” is how he sums himself up. Currently 75% of his professional staff is Native American. The McCabe Group currently has about 25-30 clients and has served more than 100 tribal governments and entities since he started it 12 years ago after about ten years working for gaming operations and other private firms. He was with a regional operation in Albuquerque for four years and did another six years with CEO/CFO jobs with casinos. He decided to go out on his own when a federal regulation created an opportunity for a niche market. In the wake of the Enron scandal, the advent of the Sarbanes-Oxley law created accounting rules that made it impossible for companies to do audits for the same clients they did consultant work for. “We did nothing but accounting service and audit prep the first ten years of the company,” he notes. With audit prep, “We make sure you’re ready for the audit,” he says. “Tribes really need that.”

Audit prep generally takes from between two to six weeks, he says, depending on the size of the client and the complexity of the operation. “We come in for reviewing prior year financial statements and doing whatever reconciliations are necessary,” he says. The summer is actually a busy time for his firm, since many tribal governments close their fiscal years on June 30 and all tribes and their associated schools, casinos and other entities need an annual audit. “If the balance sheet is correct, everything else falls into place on the income statement,” he says. His firm will look at cash balances, accounts receivable, prepaid expenditures, capital assets and other items. The company doesn’t run out when it is ready to hand over the data to the auditor, either. “My firm will be there during the audit,” he says. “We’re there to help every step of the way.” And that’s not just to rack up the billable hours. McCabe works for a flat fee each time. The larger nations, such as the Navajo, have many entities with their own accounting departments, he says, including dozens of schools. “We rarely do all the entities,” he says. “We come in for one or more of them.” There are not many Native CPA firms, says McCabe, though many accounting firms have Natives working for them and are profiting from their labor. “It’s almost a marketing thing for them,” he said. “And they should hire Native Americans. They’re getting rich off Native American tribes.” “My firm’s actually pretty rare,” says the graduate of Fort Lewis College, who is from the Fort Defiance chapter of the Navajo Nation. “I want to hire nothing but Natives. Anyone can learn the profession. Someone just needs to give them the opportunity. “If that takes me a little more time, and

a little more patience,” he says, “then I’m going to do it. I’ll take the Native over somebody else every day of the week.” McCabe also was a consultant to the production of the Native American Finance Officers Association’s GASB 34 implementation guide and is a recognized speaker on the National Indian Gaming Commission’s speaker series on governmental audits and operational issues. McCabe was recently named to the American Institute for Certified Public Accountants Minority Initiative Committee. He is a licensed Certified Public Accountant in the State of New Mexico and a member of the New Mexico Society of and American Institute of Certified Public Accountants. The McCabe Group website underlines its commitment to tribes. “We are Native American owned and operated and understand the nuances that are unique to Native governments,” it claims. Business accounting and business consulting are its biggest areas of expertise, it claims, with specialties including accounting consulting, audit prep, audits, forensic audits, litigation support, payroll services, Chief Financial Officer/controller services, bookkeeping and tribal consulting. In an earlier interview with Native Business Magazine, McCabe said “Speaking as an entrepreneur, Native America has started to become very sophisticated in its business practices and its business development. There’s a real opportunity for all Natives, if we can learn how to hire each other and work with each other. There’s opportunities for growth in business sectors like professional services providers like accountants, lawyers, and doctors all the way down to retail and food service.” — Research assistant Priestess J. Bearstops, Oglala Lakota, contributed to this article.

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GABRIELLE SCRIMSHAW’S JOURNEY By Native Business Staff

From Rural Saskatchewan to Harvard University to Launching an Investment Firm for Indigenous Business

PHOTOS COURTESY GABRIELLE SCRIMSHAW

aised in a town of 800 people in Saskatchewan, Canada, Gabrielle Scrimshaw, Dene, was an unlikely candidate to grow up to launch an investment firm for tribal and First Nations businesses and indigenous entrepreneurs. But that’s exactly what this indigenous professional with a passion for creating social impact is gearing up to do. In Scrimshaw’s single-parent household, money was tight. As a teenager, she helped out scooping ice cream at a local shop. When the opportunity came to apply for college, there wasn’t enough money to cover the application fees. Scrimshaw applied to the one school that waived her fee, the University of Saskatchewan, and became the first person in her family to attend post-secondary school. “For me, going to a University in Canada, my community helped fund that,” she shared. When she graduated top of her class from her four-year program at the University of Saskatchewan, she didn’t have a job. “I had applied to several jobs and didn’t hear anything back,” she told Native Business Magazine. Scrimshaw kept pushing forward. At a recruitment fair, she met with representatives from the Royal Bank of Canada, who began to pursue her to work at their branch in Saskatoon, where the University of Saskatchewan is based. But bigger horizons were calling. “I knew that if I had big ambitions, I probably needed to be in Toronto at the head office to have a trajectory and start myself off in finance,” Scrimshaw said.

THE FUTURE

In recent months, Gabrielle Scrimshaw’s plan to launch an investment firm for indigenous business has gained some momentum. “I’ve reached out to several investors and am having a lot of interest in investing in such a fund. Right now, I'm looking to speak more with Tribes who have successfully funded large-scale projects, or Tribes who are looking for private investment,” Scrimshaw said. A circumstantial—or fateful—situation lead her down a different path, beyond Saskatoon. Seizing the opportunity also took gumption. At a business event in Toronto, Scrimshaw spotted the Chief Human Resources Officer for the Royal Bank of Canada at the buffet table. “Out of 80,000 employees, she’s top 8,” Scrimshaw said. “I went and introduced myself, which by the way, is something I’m not even sure I’d have the confidence to do today. But I was in my early 20s and had nothing to lose. I said, ‘Here’s a little bit about me and where I’m from. Here are my longer-term ambitions. I want more of a generalist role where I can learn a lot. These are the experiences I’ve had, and the clubs I did while I was in school. Is there anything that you think would be suitable for a candidate like me in the bank?’ Although “ambushed by someone at a buffet table, she was very polite,” Scrimshaw noted. The human resources executive didn’t have an answer for Scrimshaw, but she did follow-up. “She ended up making some calls. When you’re one of the top eight executives, everyone picks up the phone. They ended up flying me back to Toronto, and I had a whole bunch of interviews with people from all different businesses within the bank. They were probably just seeing if I’d be a good cultural fit, if I had potential,” Scrimshaw said. At the end of that two-day period, the Chief Human Resources Officer and her recruitment executive decided that they would be flexible and hire Scrimshaw into the bank’s Graduate Leadership Program, one of Canada's most competitive post-graduate finance programs. In 2010, she became the program’s youngest associate and first associate who didn’t hold a graduate degree. “I wasn’t qualified for it, and I think they would also agree. I was a very nontraditional applicant,” Scrimshaw said. While fulfilled in her departmental rotation-based work and education through

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the bank’s Graduate Leadership Program, Scrimshaw also observed a culturally relevant challenge. Immediately post-graduation, support for young indigenous professionals seemingly drops off, Scrimshaw noted. “At that point, people thought I had made it, that I was good. But from my perspective, I was in the beginning of my career. I had been throughout university, spending more and more time learning about myself as an indigenous woman, as a Dene woman, and what that meant. And I didn’t want to stop that learning growth, and at the same time, I wanted to develop new skill sets, and I had no network in Toronto. I just kind of felt like there were a lot of unknowns. For me, I was hoping to find a space where I would feel supported as an indigenous person. That I could still learn how to be a leader in a corporate environment but be true to who I am as a Dene woman, and I had no idea what that would even look like. I wanted to grow my network and skillset. So, I started looking around the city, googling different Native organizations. And although there are many amazing nonprofit organizations, they were more for social support or community centers, there was nothing specifically dedicated to that leadership angle. That was the lightbulb moment, like two months after I moved to Toronto,” Scrimshaw said. Shortly after landing in the big city, Scrimshaw co-launched a nonprofit, the Aboriginal Professional Association of Canada, to form a network and “lean in” with other indigenous professionals in the Toronto area. The nonprofit, still active today, is dedicated to advancing aboriginal leadership across Canada in the private, public and social sectors. Within the nonprofit’s first year, she reached out to indigenous professionals within the Toronto area and asked about their experience, their gaps, their secrets to success, “How do you transition?”

Scrimshaw asked. “Our challenge was a) How do you remove the barriers that people face, and b) accelerate the things and grow the things that are helpful to the community?” The Aboriginal Professional Association of Canada evolved into a full-fledged nonprofit organization, operating nationally with volunteers across the country. Running a nonprofit taught her about sales and relationship building. “I had to learn how to hire, train and manage budget,” Scrimshaw told Native Business Magazine. Her experience leading a nonprofit likely helped her get her foot in the door at Stanford, she said. In 2015, she was accepted to the Stanford Graduate School of Business (GSB). She ultimately finished her MBA at Stanford GSB as part of a dual-degree program with Harvard’s John F. Kennedy School of Government, where she resumed her studies in the fall of 2015. Scrimshaw wanted to attend the Kennedy School, specifically because of the Harvard Native American Program. “There’s a student center with other programs specifically geared toward the Native American community with indigenous representation from across the world,” she said. The one thing she knew entering grad school was that she would want to continue working on indigenous economic development. The question for her was how. She also had limited exposure to how things work in the United States, so she particularly wanted to use her experience at Harvard Kennedy School “as an opportunity to learn, connect and grow,” Scrimshaw said. “I also knew going into grad school that I wanted to work on indigenous economic development, and I knew I wanted to stay on the private sector side. The MPA was focused on governance and indigenous economic development,” she said. “Having an understanding of how governments work and how to influence policy made sense. For me, I knew I wanted to stay

THE FUTURE

on the private sector side, so that’s why I did my MBA. But I knew that to work and thrive, and really help indigenous communities, that I would have to have an understanding of the public sector as well. I view the MBA and MPA as super complimentary, but with the MPA being super focused on governance and indigenous economic development,” Scrimshaw said. Her advice to indigenous youth regarding education is not to limit yourself: “Now that I’ve gone through three different schools, I know that people shouldn’t stop themselves, because they don’t think they can afford it,” Scrimshaw said. “Especially if you’re an indigenous student. If the school is a good school and an inclusive school, there are probably pools of funds to help pay for your education. Schools like Harvard and Stanford have pools of funds available for indigenous students. Hopefully finances shouldn’t be an issue. Both Stanford and Harvard were incredibly generous with their fellowships for me.” Scrimshaw earned her MPA at Harvard in May 2018. Throughout her time at Harvard, she became incredibly convinced of “the potential to make a massive impact by helping out indigenous communities through starting businesses. So many of them are ready for this type of investment,” Scrimshaw said. “They just might need help starting out the business or getting capital to start the business. But it could help them become more economically independent.” Now Scrimshaw is in the process of reaching out to people who have started investment businesses. “I’m talking to potential investors and mentors; I’m reaching out to communities to see what their challenges are and how I can be helpful,” she said. She’s also speaking with tribes who have successfully funded large scale projects, or tribes who are looking for private investment. Her ideal client is middle-of-the-road

on the economic spectrum. “In the last 30 years, we’ve seen a massive economic upswing for indigenous communities across North America. Yet you have some communities who are remote and rural. They face many different challenges—whether they be social or economic—and they’re still trying to find their footing. On the other hand, you have different communities who have hundreds of millions of dollars in revenue, that have great infrastructure. I want to focus on these communities in the middle. I’d like to help all communities one day, but I think when you start anything, it helps to have a focus. For me, this focus is the communities who have some strong governance, have good leadership in the community, and are ready now either to start diversifying their income or just thinking about different businesses,” Scrimhaw said. On the other side of the equation, there

are many potential investors who want to help indigenous communities, or they want to learn more and diversifying their investment portfolios. “I feel like I’m narrowing in on it. It’s not a question of if there’s potential; it’s the structure,” Scrimshaw said of her forthcoming investment firm. “I’ve been lucky enough in my career, that I have the skills, the access and the network to help them do that. The more I lean into this space, the more I’m convinced of the potential, and I’m so excited and motivated to spend the next several years focused on this.” Scrimshaw continues to reach out to people who have started investment businesses. She’s talking to potential investors and mentors, and reaching out to communities to see what their challenges are and how she can be helpful. Scrimshaw views her investment firm as a “totally new capital pool that communities can have access to.” She’s still trying to figure out: “How many communities would we want to work with? Would it be a project-by-project basis? How early do we want to get that capital into these communities? What are the things that might have to happen before that?” With all of these questions, Scrimshaw is working toward providing these communities with ultimate ownership of the business, so that they can define success and have control of their economic and social future. She intends to help them build and start the business, “and maybe after five years, they buy the majority of the equity back, so that they have ultimate control,” she said. “There are all these questions about how the structure would look and what ROIs we would need. I can figure that out. But my ultimate goal is to help every community I work with have ownership of businesses and the ability to start new businesses with the available capital that they need to do that,” Scrimshaw said. D ECE MB E R 2 0 1 8

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ENTREPRE BY NATIVE BUSINESS STAFF

ACCESS T & Native Business Magazine asked several indigenous entrepreneurs 10 questions about how they accessed the capital to fund their

business ideas. No matter your background, skillset, connections or sector of business, every entrepreneur must tackle the question of capitalizing their vision. In Indian Country, this if often uniquely challenging. We asked entrepreneurs across an array of industries to share how they went about securing the money to start their business and how they attained success. From their various vantage points, one can glean ideas and inspiration, as well as an overview

TRIBAL TECH, LLC

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In 2000, Vicki Vasques retired from the federal government to launch her own business. Today, Tribal Tech, LLC has a healthy portfolio of over $8.3 million with about 100 people working nationwide for Tribal Tech in training and technical assistance to various government entities including tribes, providing grant application, administration, data analysis, and a full spectrum of communications and IT services. Vasques, president and CEO or Tribal Tech, LLC, underscores that when it comes to running a small business, the president has to have his or her hands in every pot—“to know everything from A-Z,” from executive management to finances, to human resources, even IT—to ensure success. Vasques is a huge advocate of the Small Business Administration’s 8(a) program, and advises everyone considering getting into the federal space to get certified as soon as possible. The education, training and technical support that the SBA offers can be the difference between success and failure, she advises. Native Business Magazine spoke with Vasques about her slow and steady journey to build a successful and sustainable business in government contracting.

PHOTO COURTESY TRIBAL TECH, LLC

of the state of affairs of capitalization across Indian Country.

SPECIAL REPORT

ENEURS

TO C APITA L 1) When you came up with the idea for your business, what were your initial thoughts about how to capitalize it? Having worked for the federal government for over 20 years, it seemed like a great idea, as well as the timing was right, to start my own business, pursuing government contracts. My plan was to apply for the SBA 8(a) certification that is designed to give minority and disadvantaged businesses a fair advantage going after government contracts. I soon learned how extensive this process would be and how long it would take for approval. 2) What difficulties did you encounter with raising capital to start your business? I was very fortunate to have left the federal government with a retirement pension, not huge, but enough to pay the bills and get started. I also invested a part of my savings into the startup of Tribal Tech, not needing to borrow or raise capital. 3) Were you aware of any federal or Native American programs to help you finance your business, and did you feel that you had access to them? Did you take advantage of those programs? The federal program that I was aware of, and as I mentioned earlier, was the SBA 8(a) Small Disadvantaged Business certification. At the same time, the SBA had just come out with the 8(m) certification for woman-owned small business, which I also pursued. 4) Were you aware of any programs for Native entrepreneurs available in your community or through your tribe? Being based in Alexandria, Virginia, there were not any programs for Native American entrepreneurs in the community. I did join the Women Presidents’ Organization (WPO), Washington, DC Chapter to meet other women small business owners; not only to network, but to learn from one another. I also found value investing my time in trying to meet other 8(a) small business owners, as I traveled throughout Indian Country and by attending various native organizations’ regional and national meetings. 5) Did you feel like you had the appropriate amount of business and accounting training to provide you with an understanding of how to go about accessing capital? Very good question! Running a small business, understanding

the financial side, was not my strength. I purposely point this out, because I put my trust in a partner, who encouraged me, after we won our second largest contract, to move all our back-office functions (for example: Finance, BD, HR, IT) under one provider. I thought this would be a win-win for Tribal Tech – a turnkey operation, letting me focus exclusively on our core operations. However, the trust deteriorated, accounting errors occurred, and a huge IT investment, building out their infrastructure; I felt stuck and needed to get out! Once I made the decision to cut all services and transition our back office to headquarters, which was a scary and costly undertaking up front, we quickly realized significant cost savings, control and accountability. One move I’ll never regret! My weakness in the financial side quickly became my strength and priority. As I learned from a saying, attributed to President Reagan, “Trust, but verify”. 6) What avenue(s) did you ultimately use to fund your business, and knowing what you know now, what funding path would you recommend to other aspiring or emerging entrepreneurs? I established a close relationship with a banker at a financial institution. We took baby steps, growing Tribal Tech together. I would also add that establishing a realistic line of credit, especially if you’re in the government contracting business, is essential. 7) How did the process of raising capital to launch your business empower you as an entrepreneur? Vasques didn’t need to borrow or raise capital to launch Tribal Tech, LLC. Entrepreneurship, in general, is very empowering, she concedes. It requires a “110 percent effort…and one you have to be 100 percent engaged in every day," she said. Vasques “really put the pedal to the metal to build Tribal Tech’s past performance” to greatly improve her ability to bid competitively in the federal marketplace. 8) How has access to capital changed over the course of operating your business? What additional business strategies have you used to help fund your business? Again, I must point out our long-standing relationship we have developed with our banker and financial institution. As we have grown and needed more resources, they have helped us every step

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9) What would your advice be today for entrepreneurs who are just starting to seek funding for their businesses? Ask the tough questions and don’t give up. Establish that close relationship with your bank and don’t be afraid of change. I always say, focus on the right things and don’t get ahead of yourself! 10) What are some of the ways that Indian Country could improve its support for funding emerging entrepreneurs? This is another great question. I’m sure the tribal leaders around the country could provide some great advice based on their vast amount of experience. Emerging entrepreneurs wishing to work in Indian Country should begin a dialogue with these leaders and seek out ways to gain their financial support.

ARROWHEAD CAMPGROUND & THE NAVAJO WAGON

Roseann and Lester Littleman invite tourists to unplug and experience the Diné way of life in the rugged, high-desert landscape of Navajo country. Guests can book a stay in one of their traditional dwelling options, Hogan or Tipi. The Littlemans also offer wagon tours to the hidden Mystical Antelope Canyon, a spiritual place of towering sandstone walls. The enterprising couple call their bedand-breakfast and tourism operation “Arrowhead Campground & the Navajo Wagon.” The Littlemans had already listed their residences on Airbnb when they approached the Native American Business Incubator Network (NABIN) on the Navajo Nation for assistance. Among other recommendations, NABIN quickly advised the Littlemans move their Airbnb e-listing from LeChee, Arizona, to nearby Page, “which is a big tourist community where Lake Powell is,” said Jessica Stago, lead business counselor for NABIN. Whereas numerous slot canyons weave through the area, the canyons on the Littleman’s property have a unique advantage. They run east to west. Nearly all the area slot canyons stretch north to south.

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As the sun rises and sinks, it casts light through the red stone slots. “Throughout the day, the lighting changes, and they have a longer time to lead tours,” Stago said. Roseann is a retired National Park Service employee, and Lester is a retired coal miner. Native Business Magazine spoke with Roseann Littleman about capitalizing Arrowhead Campground & the Navajo Wagon tours. 1) When you came up with the idea for your business, what were your initial thoughts about how to capitalize it? We set funds aside about 5 or 6 years ahead of time; we started purchasing the equipment—the welding machine, the tractor—we were going to use. We planned ahead to where we had the stuff we needed when we opened the business. We got rid of personal loans. We didn’t buy any vehicles for anything, so we had the money ready for after retirement. 2) What difficulties did you encounter with raising capital to start your business? Where to start… Waiting for the business site lease and going through the archeological clearance, spending money for travel back and forth from Window Rock to Tuba City, Arizona, to meet with small businesses in Tuba. We knew that borrowing the money was going to put us down, so we had to use our own money for this, using retirement money. We needed labor for the ground work—using the tractor, setting up the tipi, making signs for the entry to the campground, etc. We couldn’t get a business loan because we were not established. So, we got a personal loan for the restroom. Tourists want to be able to shower, they want to know if there is running water. Tourists way of life is different; they are used to things like electrical. We try to show them about how we live, in a traditional way. 3) Were you aware of any federal or Native American programs to help you finance your business, and did you feel that you had access to them? Did you take advantage of those programs? Only NABIN, and the Small Business in Page at the Communi-

PHOTOS BY: JAKE HONYUNGOWA

of the way. With the threat of our government contracts being impacted by continuing resolutions or shut downs, it’s a comfort to know our bank is there.

SPECIAL REPORT ty College—those are the only programs. Dolly at Navajo Regional Business Development Office (RBDO) showed us how to keep the business going with all the paperwork that we had to go through. It took time. We were stalled for two years because of the consent form that slowed us down. We couldn’t get the business site lease until we got the family to approve the consent form allowing us to start a business on the grazing rights land. Even though I have a grazing permit, I had to work with the other people that have a permit too, because they have their livestock in the area. It’s open range, so they are your neighbor, and if they don’t want you to do the campground or tour, they won’t sign the consent form. And then that will be the end. We had to work with them to get the okay for the business.

PHOTO COURTESY HIGH REZ WOOD CO

4) Were you aware of any programs for Native entrepreneurs available in your community or through your tribe? The Navajo Regional Business Development Office (NRBDO) is where we started. We attended some classes with them on how to go about business ideas; it was a help to us. We didn’t know anything about trade names or anything, we had no guidance. We’re not familiar with computers, so running a website was something we didn’t know how to do. We were just going along on our own.The other tour operators won’t help you, because they are too busy with their own businesses.

take a chance on a big loan, so I wanted to pay a lot of it our self. 7) How did the process of raising capital to launch your business empower you as an entrepreneur? A lot of it is sacrificing—not buying things and making sure to lower your bills so you can save money. 8) How has access to capital changed over the course of operating your business? What additional business strategies have you used to help fund your business? The camping helps to keep the project going, so the money coming in from that is paying for what we need now. So, what money that is coming in, we have to use toward the expenses. Without the money from the campground, we would be stalled, because the canyon tour is not well known, so it’s taking time to get going. The hardest part is getting the materials down to the slot canyon. 9) What would your advice be today for entrepreneurs who are just starting to seek funding for their businesses? It’s more of a work around than anything. You have to come from all sides, look into everything, talk to people, ask questions and see how you want the money to work for you. At times, things seem impossible in your mind. There are just two of us, and we have 10 things to do, and we have to do this one day at a time. You just have to go with it. You have to practice teamwork, communicating with each other. 10) What are some of the ways that Indian Country could improve its support for funding emerging entrepreneurs? I would like to know more about how to write for grant money, or where are the grant funds, or match funds to help start a business. For information about lodging or tours, visit camptourantelope. com or call (928) 640-3852.

HIGH REZ WOOD COMPANY

5) Did you feel like you had the appropriate amount of business and accounting training to provide you with an understanding of how to go about accessing capital? No, there was no training available. 6) What avenue(s) did you ultimately use to fund your business, and knowing what you know now, what funding path would you recommend to other aspiring or emerging entrepreneurs? We used our personal income, our own savings. We set aside money strictly for this business. We know a loan is something that you have to pay back, and over time, what you pay builds. So if the business is not successful, you lose a lot of money. I didn’t want to

Stephan Cheney, a 28-year-old Lakota entrepreneur of the Kul Wicasa Oyate fromt the Lower Brule, South Dakota, hunts for wood around his Northern California home to make his signa-

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SPECIAL REPORT ture furniture. “I collect a lot of pieces of wood randomly along the way,” says the discerning scavenger. He also has friends and relatives scouting for him. Overtime, word has spread within Cheney’s circle of family and friends that he has a gift for making furniture from scrap pieces of wood, even though he had never been trained in that art. “I am self-educated and it all starts with the belief, ‘Yeah, I think I can do that!’” Cheney made my first dining table because his Relatives were sitting on the ground when they came over to visit him and his wife. Native Business Magazine spoke with Cheney about how his Relatives helped make High Rez Wood Company a reality.

2) What difficulties did you encounter with raising capital to start your business? Initially, I had to get over the invisible barrier I had placed in front of myself saying that my work wasn’t good enough to sell. I would see work online being sold for thousands of dollars and think to myself, maybe one day, but today isn’t that day. I have a woodworking brother and mentor who operates his own shop full time. I would go over whenever he asked for help to learn. His shop has everything a woodworker would need to make and create. The problem is that this planer might be $3,000. This drum sander might be around $2,000. This router is $600, and the sander $300. Those numbers are a little discouraging, especially as I am doing work out of a little 7ft by 6ft space which is my laundry room! I down-played my importance and quality of work because it was coming out of such a humble little space. The mentality switch allowed me to think forward about what could work instead of what couldn’t work. I found ways to create the same quality of

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pieces that would allow me to advance my goals. 3) Were you aware of any federal or Native American programs to help you finance your business, and did you feel that you had access to them? Did you take advantage of those programs? I am not aware of any programs, and for sure do not feel I have access to them. I am looking constantly for those things, but have yet to find one that might benefit the work and help maintain the integrity that goes into each piece. 4) Were you aware of any programs for Native entrepreneurs available in your community or through your tribe? I am not aware of any in this area specifically or back home in Lakota Territory but would be open to any insight folks might have to offer! 5) Did you feel like you had the appropriate amount of business and accounting training to provide you with an understanding of how to go about accessing capital? I feel I can always use more training in business and accounting. I spend a lot of time researching what works for people and what doesn’t. I analyze trends and try the best that I can to incorporate those things into High Rez Wood Company. The biggest thing for me is finding ways to make the things I make more accessible for everyone. 6) What avenue(s) did you ultimately use to fund your busi-

PHOTO COURTESY HIGH REZ WOOD CO

1) When you came up with the idea for your business, what were your initial thoughts about how to capitalize it? One of our important ceremonies in Lakota epistemology is the Hunkapi, The Making of Relatives. Notice in this example the “R” is capitalized, noting that it carries some significance within the language. It holds some power in these terms. I have been taught that we are all connected. Mitaku Oyasin translates roughly into, “To all of my Relatives.” When this is said, you are acknowledging everyone and everything around you and their own ways of being. You are acknowledging that all Relatives are significant and that we all have a connection to one another. High Rez Wood Company was created making gifts for Relatives, and the main reason it will continue to grow and expand is from the support and backing of those same Relatives.

SPECIAL REPORT ness, and knowing what you know now, what funding path would you recommend to other aspiring or emerging entrepreneurs? Ultimately High Rez Wood Company works because of the support of all the Relatives. I think across our communities, this is the difference-maker. About a month ago, I had a Relative order a jacket that didn’t fit him. He asked if I wanted it, and in exchange if I could make him a cutting board. Over lunch I was telling him about the progress I was making on the board and how I was really getting pretty quick. I could make a board in about an hour, start to finish. A week later he asked if I could join him for Dinner, where he and his Wife asked about investing in High Rez Wood Company. He and his wife shared that they really loved the work and that they just want to see me make things in a bigger way. They asked if I could make them a dining room table in exchange for a jointer. I was blown away by this support and could not believe what had happened. This moment has really solidified my thoughts about our communities. We are capable of so many beautiful things especially when we support and uplift one another in the ways that we can. I would encourage all of the Relatives to seek out those people in your community creating and uplift them in every way you can.

PHOTO COURTESY GEOFF HAGER

7) How did the process of raising capital to launch your business empower you as an entrepreneur? I believe that it made it all real to me, knowing I can actually do this. It went from dreams to reality just like that. There are many woodworkers out there, yet people were really interested in getting work from me. Now I have work in multiple countries! 8) How has access to capital changed over the course of operating your business? What additional business strategies have you used to help fund your business? With the help of purchasing some equipment, I am able to create things quicker and with precision. I now have few different styles of pieces that I can recreate for the Relatives, such as specific styles of cutting boards, benches and tables. There are more Relatives looking for hidden pieces laying down in the forest and just more information being shared out there about the work through avenues like Native Business Magazine. 9) What would your advice be today for entrepreneurs who are just starting to seek funding for their businesses? I am like you, in that I am only now navigating the ways in which I can expand the funding needed to take High Rez Wood Company to the heights that I envision. My best advice is to remove all the negativity associated with you accomplishing your goals and dreams. Starting first with yourself and the negative barriers you put up to guard yourself. It takes knowing ourselves and believing in ourselves to really grow. This is followed by the support of those people and things you surround yourself with. When there is a wall in front of you, find the way over it. If you need some help, I’ll build you a stool so we can get over it together. 10) What are some of the ways that Indian Country could improve its support for funding emerging entrepreneurs? I am not sure if I have the answer to this as our communities are so vast and different.

BIG ELK ENERGY SYSTEMS

Geoff Hager, founder of Big Elk Energy Systems, is a believer that all of life is built on relationships. Bank representatives and investors are a part of that. “If you want someone to invest in you, you have to go all-in yourself,” said Hager, a direct descendant of Osage chief Big Elk. Hager and his wife liquidated their retirement funds and put all their money on the line to start Big Elk, a pipeline equipment manufacturing company. “I went two years without a paycheck and one year without medical insurance,” he said, and he spent a lot of time praying he and his family would not become ill. “That really spoke volumes to people. Even though what we had was a tiny fraction of what was needed to get the business off the ground, they knew how powerful that was,” Hager said. Their leap of faith paid off. The 100-plus employee company has attained a whopping three-year growth of 3,152 percent, raking in $20.6 million in annual revenues last year. Hager hopes to increase that amount to $100 million in a few years. Hager says Big Elk has a “go big or go home” strategy, and he means it literally. The carbon steel parts the firm manufactures in its 140,000-square-foot facility in Tulsa, Oklahoma, are as big as semi tractor-trailers. Big Elk manufactures parts for pipeline companies. Speaking of relationships, Hager wanted to underscore why it’s paramount for stakeholders in his industry to consult tribes. Using an analogy, he compared pipelines to highways (he feels these are the safest ways to transport people and energy across land). No one would build a highway through tribal land without consulting the tribe on its sensitivities, he said. “I am opposed to pipeline infrastructure being laid anywhere that does damage to indigenous people,” he said. Native Business Magazine spoke with Hager about obtaining more than $8 million in capital to launch Big Elk Energy Systems. 1) When you came up with the idea for your business, what were your initial thoughts about how to capitalize it? I’ll readily admit that while I had been in this line of work for several years prior to going in on my own and starting my own business, I would say that the financial piece of that was the one

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SPECIAL REPORT area that was a big void for me. As a part of conducting business, I had a decent rolodex of contacts for a variety of different roles such as operational sales, various technical and engineering type roles. What I didn’t have was a lot of financial contacts and particularly those involved in capital markets. Thinking back to that particular time period, I wasn’t sure how to capitalize it. I had one guy who I knew who was a church connection. He was an investment broker; he had sources of capital, and he would try to find good business ventures, and if he could get the two married, then he’d make a good commission off of the deal. I started there, because I didn’t have anyone else. It worked theoretically. We got a funding contract put together. Unfortunately, that deal failed and I had to start over from scratch. That was a really challenging time period. My best answer to this question is to say that I really didn’t have any solid initial thoughts about how to capitalize it. My only thought was to try to find someone I knew who worked in the capital markets and guide me in a way to get us off the ground. I went through a lot of bumps and bruises before getting there. 2) What difficulties did you encounter with raising capital to start your business? The first one as I alluded to previously, the first contract I had in place ultimately fell through, and it took over nine months to get to that point. So in the process, I had actually secured with my own funds, and I didn’t come into this deal independently wealthy. My wife and I had been good stewards of our income, living below our means, but we didn’t have the kind of capital necessary to start our business. We needed between $8 to $10 million to start our business, and we didn’t have anywhere near that amount of money. So we had to raise capital. We also knew that we would need a property, because the equipment we manufacture is very large. You have to have a large facility with large capacities. We found an ideal property, and I knew it was the right property for us. But in order to secure it, we had to put up $80,000 for earnest money. We had to do that with our own funds. We were already in a position of liquidating some retirement funds to make that happen. Delay after delay after delay, ultimately, our initial funding contract for the business fell through. We had to walk on the property contract. My wife and I lost $140,000, which was almost everything that we had. We had to start over. So this time, I went a different route. I went to a bank, trying to find a lender who would be willing to take some amount of risk, which is very difficult to find. Most banks are completely risk averse. We found a bank that would back us if we could bring some amount of private capital to the table. The end of that conversation was, if we could shoot for $3 or $2 million, they could make it happen. About two months later, we came back with $2.4 million in private capital from an assortment of different private investors, and then the bank lended us the rest of the funds that we needed. This all took place over nine months. Throughout that time period, you could find me in the fetal position in the corner, just hanging on for dear life. It was a very difficult time-period before when we eventually raised the capital to start the business. 3) Were you aware of any federal or Native American programs to help you finance your business, and did you feel that

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you had access to them? Did you take advantage of those programs? I was made aware of the U.S. Small Business Administration (SBA) programs to help finance, and we did take advantage of that program. We did use an SBA 504 loan for some percentage, maybe 35 percent, of the property and equipment to get the business started. We also used a line of credit available to us through TEDC, the Tulsa Economic Development Commission. We also had a state program called a quality jobs program that we used. 4) Were you aware of any programs for Native entrepreneurs available in your community or through your tribe? I don’t know that I was aware of any programs specific to Native entrepreneurs. When you’re starting a business in Oklahoma, you get the benefit, since the business resides on Indian land, you get more accelerated depreciation rates. That’s not a specific program per say. Certainly I would give the Oklahoma Chamber of Commerce credit. They helped us get assimilated to the resources they had. But there’s no funding related to that. 5) Did you feel like you had the appropriate amount of business and accounting training to provide you with an understanding of how to go about accessing capital? That would be a resounding no. When we were first getting started, I reached out to a couple of different accounting firms, in hope that going with a larger firm, they would have collectively the expertise to help us go through the process of accessing capital. In that sense, I would say we had some success. We use HoganTaylor LLP in Tulsa for our general finance and consulting services. They’ve been with us since the beginning. My answer for myself is a big no, but once I got them involved, they had expertise and helped quite a bit. 6) What avenue(s) did you ultimately use to fund your business, and knowing what you know now, what funding path would you recommend to other aspiring or emerging entrepreneurs? Ultimately, we used a combination of traditional, senior debt along with private capital. Those two efforts combined allowed us to get off the ground. Furthermore, it was having an entity coming along side to help guide us on that path. Knowing what I know now, it’s such a different story now. Back then when I needed money, there was no one around. Now I’m surrounded by people who want to help, which is good. It’s important to have a good banking relationship; that’s something that needs to be established up front. I’m a believer that all of life is built on relationships, and when it comes to funding your business, your bank is going to be central to that and certainly investors are going to be central to that. My recommendation is to make sure that those relationships are as strong as possible going into the request to fund your business. A lot of people just want to go with a big bank because of the size, and they think you might have access to capital. But it’s more important to have a bank that you can have a personal relationship with the people involved. Because when you’re starting a business, you’re going to go through some tough times, and you’re going to need some people to hang on with you through some difficult time periods. That only hap-

SPECIAL REPORT pens if they’ve bought into the dream and what it is that you’re doing. We use Blue Sky Bank. When we started it was called Citizens Bank of Oklahoma, and now it’s called Blue Sky. 7) How did the process of raising capital to launch your business empower you as an entrepreneur? When you’re starting a business that at launch takes several million dollars, and the only way that you can do that is completely through investment or a combination of investment and traditional debt, the first major test is: can you get other people to buy into your vision and dream, to the extent that they’re willing to put money behind you, when all you are is a piece of paper? We had private investors that put down about $2.5 million, and a then bank that put down another $5 million, and all we were was an idea. I guess you could describe it as empowering, because people believe in you, and they’re willing to take a chance on you. But I would also say, it’s not as if you have much time to think about that. Maybe a day. Then the next day, you need to put that money into action, and start working toward the return that you want to provide to all the people who made an investment in you. It’s empowering on one hand, but it’s also overwhelming and intimidating on the other hand, because now you bare the capital responsibility to give your investors a return. That’s the yin-yang of recruiting investment at the start gate.

PHOTO COURTESY BISON COFFEEHOUSE

8) How has access to capital changed over the course of operating your business? What additional business strategies have you used to help fund your business? Well when you’re first getting started, no one knows you, so primarily you’re trying to raise capital in your local market—unless you happen to be in a line of work prior to that where you know a lot of capital sources outside your reach, and I certainly wasn’t in that category. So when we first started, I had to work with people we knew around here to make something happen. Over the course of time, as our businesses turn the corner and become profitable and successful in the sense that we’ve had some national notoriety—that positive attention has lead to lots of other entities being interested in us and wanting to help us from a financial standpoint. So I would say our access to capital is a lot greater than it was when we first started. 9) What would your advice be today for entrepreneurs who are just starting to seek funding for their businesses? I would say, from a business strategy standpoint, because it takes months to build this type of equipment, it’s really hard to cash-flow the project. So, from a business strategy standpoint, we work very closely with our clients to get progressive payments at certain milestones throughout the project, so that we don’t end up cash-flow negative. I’d say, for the most part, our clients have been very willing to work with us on that. So the nice thing is, when we book a large job that might be over a million dollars, we can expect to get milestone payments from our customers that help with the cash-flow throughout the project. I would say a couple of things. First, really work on refining your pitch, so to speak, so in a very short time period, you can describe what you’re wanting to do. A lot of people you’re going to for sourc-

es of capital, they get folks coming to them all the time for investment. You may have a solid business plan with great analytics, but at the end of the day, people invest in people. You have to get your message across in a short amount of time why someone would want to invest in you. If you want someone to invest in you, you have to be all-in yourself. When we first getting started, myself and my wife had invested everything we had to get this started. That really spoke volumes to people. Even though what we had was a tiny fraction of what was needed to get the business off the ground… they knew how powerful that was. Make sure you’re pursuing something that you’re able to put all you have into it, and make sure you communicate it effectively in a concise time period. It’s important to have your pitch ready to go, anywhere, anytime. You never know when bumping into the right person might make your dream come true. You can’t let the entrepreneurial vein turn off, you’ve got to keep it on. 10) What are some of the ways that Indian Country could improve its support for funding emerging entrepreneurs? It would have been great, when I was getting started, if someone said, here’s a website that lists a variety of programs available to you depending on what line of business you’re getting into. I never had that. At the same time, I don’t know the best way that you can get to those emerging entrepreneurs, because the problem is they’re just that, they’re emerging. If I were listing ways to improve support, it would be to make the messaging more visible to emerging entrepreneurs, but at the same time, I’m not sure how to do that.

BISON COFFEEHOUSE

The name Bison Coffeehouse came to Loretta Guzman in a dream, while she was ill in the hospital with stage 4B cancer. “I could feel myself dying,” she told Native Business Magazine. “I dreamt of the bison,” said Guzman, member of the Shoshone-Bannock tribes of Fort Hall, Idaho. “He kept trying to get closer and closer to me, until he was in my face. I told my family, and my dad said, ‘That’s your grandpa. You’ll get better. I’ve been praying

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reservation, I would really like to carry your coffee, because some of our people on reservations live in such poverty. Even if I’m only spending a few thousand at a time, at least it’s that much more money going back to them and to their people. I want to see our people do better,” Guzman said. Bison Coffeehouse is a culmination of years of hard work. Native Business Magazine spoke with Guzman about how she paid her way through school as a barista, and how she capitalized Bison Coffeehouse. 1) When you came up with the idea for your business, what were your initial thoughts about how to capitalize it? My father was using a building as storage, and I asked to have it to start my coffeehouse. All the money I was putting into school, I decided to put it into this building, which needed a lot of work. Meanwhile, I kept beading. My grandma used to say, ‘If you know how to bead, you will always have money.’ That’s like our gold. I started beading big projects. When her sister goes vending, she sells my work: full leggings, moccasins and bags. People are always looking for beadwork—full regalia type stuff. I funneled my profits from beading into my building. When I wasn’t working, I was at home beading. 2) What difficulties did you encounter with raising capital to start your business? There were a lot of them. I relied on the money I had saved from my paychecks and tips and my beadwork. I kept working and sav-

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to him in the spirit realm. He used to dance for the bison. He used to wear this buffalo hat.’ Then, I ended up going into remission and getting better.” Today, a massive bison head looms over her coffee shop in Portland, Oregon. While Portland boasts the ninth-largest Native population in the country, Bison Coffeehouse is the city's only Native American-owned café. Everything at Bison Coffeehouse is baked inhouse. The fashionable café reflects Guzman’s heritage, with furniture lined in vintage Pendleton prints or rawhide, and Native-made art adorning the walls. “We’re uplifting each other. I’m a place to display your product and also to sell your product,” Guzman said. Her coffeehouse is a gathering place. “I always open my doors to people—for poetry slams or gatherings. It’s a community space,” she emphasized. Guzman carries Native-owned roasters at Bison Coffeehouse, including Stone Mother Coffee Roasters, a Paiute-owned and family-operated coffee roasting company located on the Reno Sparks Indian Colony in Nevada, and Native Coffee Traders, a Fair Trade Certified Company located in upstate New York, founded by Harry Wallace, an attorney who has served as Chief of the Unkechaug Indian Nation since 1994. Meanwhile, Rebecca “Becky” Genia, a member of the Shinnecock Indian Nation, serves as Native Coffee Traders’ “roast master.” “There are a lot of coffees with Native names, but they’re not Native-roasted or Native-owned. For me, if you’re a Native roaster, I would like to carry your coffee. If you’re a Native roaster on a

SPECIAL REPORT ing as much as I could, putting it into my business. I knew if I could make others’ businesses successful, I could do it for myself. I’m a trouble-shooter. If I don’t know how, I’ll figure it out. I’d price things out. I wrote lists of different things I’d need for my shop. Every single day, I’d search Craigslist for cups, for everything. I wanted quality stuff, too. I looked up the prices brand new. When a place was going out of business, and they had good quality stuff, I’d go purchase from them. I started marking everything off my list as I was finding it. My sister lent me money to buy our espresso machine, which was only 41 days used. It typically costs $13,500, but we paid about $7,000 for it. She and I do that, lend each other money. We help each other. 3) Were you aware of any federal or Native American programs to help you finance your business, and did you feel that you had access to them? Did you take advantage of those programs? No and no. I didn’t know of any.

was fun getting to create it how I visualized it. It started evolving into what it is. Now I’ve got my floors leveled. The hard parts were dealing with the city or contractors. The stuff I could do myself was fun. My mom and I did pretty much everything we could ourselves. Everyone in the family leaned in. We pushed it out. All my family is involved. My mom is my accountant. My daughter works for me. My sisters help out. You have to have the drive—even when it gets hard. 5) Did you feel like you had the appropriate amount of business and accounting training to provide you with an understanding of how to go about accessing capital? No. But I’m good with numbers, and my mom was an accountant, and my dad has his own business. My dad said, ‘Be prepared, because you’ll be working a lot.’ I said, ‘I’m already working a lot. If I’m going to work this hard, I might as well work for myself.’ 6) What avenue(s) did you ultimately use to fund your business, and knowing what you know now, what funding path would you recommend to other aspiring or emerging entrepreneurs? I just worked, saved my tips. I had really good credit; all my bills were caught up. I kept saving money that way and doing my beadwork. When I’d get my per capitas, I’d use my per capitas from my tribe. I would say: Save as much as you can before you get started. Make sure you have money saved up to pay your bills. Try to get as caught up as you can before you jump in. If you do have credit, you can always use your credit. 7) How did the process of raising capital to launch your business empower you as an entrepreneur? I was like: If I can go to school full-time and work full-time, I can put my extra time into what I’m doing here.

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9) What would your advice be today for entrepreneurs who are just starting to seek funding for their businesses? Do as much as you can yourself. 10) What are some of the ways that Indian Country could improve its support for funding emerging entrepreneurs? Promote the various programs that are available to help entrepreneurs with capital. I didn’t know of any. This was just a dream that I had.

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4) Were you aware of any programs for Native entrepreneurs available in your community or through your tribe? Yes and no…. I had read that the Native American Youth and Family Center had a business program and they were offering a 3-to-1 match—meaning I save $1,000 over a period of time, and they match it with $3,000. I enrolled in that business class. I completed it. But they never did anything to help me. I was kind of bummed out. I really believed in what I was doing, and I wanted them to be a part of what I was doing. I had issues with contractors overcharging me. I’d ask for a flat rate, but they would always end up charging me more. So, we did the floor plans and built it out ourselves to save money. We gutted the building. It was fun watching it grow into what it is now. It had drop ceilings; we took it down to the beams. We took the electrical out. I have old-style lights in my coffeehouse. I used to save really pretty lights, and I wanted to put them in there. It

8) How has access to capital changed over the course of operating your business? What additional business strategies have you used to help fund your business? I just made four years on Veteran’s Day. Now that I’ve had my business open and successful for four years, people are reaching out to me now. They didn’t reach out to me when I was struggling. I’m very selective what I allow, because I don’t want other people or places being able to put their name on my business, because they didn’t believe in me before. These places were around when I was working on my place. Nobody wanted to invest in me. Now I get a lot of different businesses coming to me. I try to be humble about it, but I’m also selective at the same time.

SPECIAL REPORT NATIVE AMERICAN NATURAL FOODS

Affairs (BIA) Guaranteed Loan program. 2) What difficulties did you encounter with raising capital to start your business? We did not have any difficulty raising capital as we had previous experience, we knew the bank Loan officers, and the federal program officers, because we ran a Community Development Financial Institution (CDFI) previously and had many connections.

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In 2007, Native American Natural Foods debuted its first food product, the Tanka Bar. Based on traditional wasna and pemmican, the Tanka Bar combines high-protein, prairie-fed buffalo and tart-sweet cranberries. The lean meat has provided fuel to Lakota warriors for centuries. “Our runners used buffalo and berries when they would go out on hunts; they’d pack it in a buffalo horn,” Karlene Hunter, co-founder and CEO of Native American Natural Foods, told Native Business Magazine. While providing traditional fuel to contemporary warriors, Native American Natural Foods is claiming substantial shelf and e-commerce space. In the Lakota language, Tanka means “larger than life,” and that’s what the company is becoming. Today Native American Natural Foods products are sold at more than 8,000 retailers, including Amazon, Whole Foods, REI and Costco. The company also makes the only nationally distributed Native American food product certified by the Intertribal Agriculture Council as “Native-made.” Hunter and her business partner Mark Tilsen founded Native American Natural Foods on the Pine Ridge Indian Reservation more than 10 years ago. Launching a business goes a bit more smoothly when you know how to go about accessing capital, and you have prior business experience. A member of the Oglala Sioux Tribe, Hunter previously founded Lakota Express (LEX), a full-service direct marketing company located on the Pine Ridge Indian Reservation in South Dakota. Hunter, who holds an MBA from Oglala Lakota College, also counts decades of experience working on educational and economic development on the reservation. Native Business Magazine spoke with Hunter about the financial resources she and Tilsen tapped to launch Native American Natural Foods in 2007. 1) When you came up with the idea for your business, what were your initial thoughts about how to capitalize it? We decided to use commercial loans since it is a for-profit business. We went after the U.S. Small Business Administration (SBA) Small Business Women’s loan program and the Bureau of Indian

4) Were you aware of any programs for Native entrepreneurs available in your community or through your tribe? Unfortunately, there are not any programs available for entrepreneurs in our tribe, but we did have help with some of our infrastructure when building our building. 5) Did you feel like you had the appropriate amount of business and accounting training to provide you with an understanding of how to go about accessing capital? Yes, I have a MBA, which helped, and we ran Lakota Funds which offered training in those areas, so I taught and took some classes. 6) What avenue(s) did you ultimately use to fund your business, and knowing what you know now, what funding path would you recommend to other aspiring or emerging entrepreneurs? There are many funding paths that you can take, and SBA and BIA Guaranteed Loan programs are the first to explore. If you are doing business that helps benefit an area or groups of people, it’s good to look at PRI’s (Program Related Investment), but this will take some experienced financial people to look at the viability of the fit into your structure. There are many sources of financing, and you should seek out advice from experienced banks, entrepreneurs and federal agencies. 7) How did the process of raising capital to launch your business empower you as an entrepreneur? It validated that we had a good plan, and that people believed we were on the right track by funding the loan. That gave us confidence that we put together a good plan, could defend every aspect of it, and could get to work to pull it off. 8) How has access to capital changed over the course of operating your business? What additional business strategies have you used to help fund your business? It was relatively easy to obtain the initial loans, but it became very difficult to fund growth capital. We struggled to get additional working capital and marketing capital. In hindsight, we should have really went in for more on the initial loan and anticipated the future needs. We turned to outside investors to capitalize the growth.

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SPECIAL REPORT 9) What would your advice be today for entrepreneurs who are just starting to seek funding for their businesses? Research, Research, Research. Look at all the banks you can for best interest rates, amenities that go with doing business there, and establish a relationship with them. Look into all the Federal Programs you could utilize, as a CDFI or other organizations (such as National Center for American Indian Enterprise Development) that provide training in this area. Ask other entrepreneurs or the Chamber of Commerce in your area for advice. Just do your homework to make sure you know what is available out there that fits your needs best. 10) What are some of the ways that Indian Country could improve its support for funding emerging entrepreneurs? Tribes could help: • Tribes could offer 1 year free leases to new businesses. • Give free marketing spots for new businesses for 6 months to a year in their publications. • Include Workman’s Comp, Life Insurance plans into their tribal plans for new businesses. • Provide accounting set up/oversight to a business free for one year until they are established. • Prioritize contracting with Native American businesses.

APACHE SKATEBOARDS AND APACHE SKATE TEAM

“I am the culture, therefore, I’m making the culture. With everything I’m doing—whether photography, film, writing, product design, brand management, marketing—all of these things, I’m making them constantly,” he said. It took quite a bit of resilience to build a sustainable business. Native Business Magazine spoke with Miles about his entrepreneurial journey, and why he thinks Native entrepreneurs will lead Indian Country into the future. 1) When you came up with the idea for your business, what were your initial thoughts about how to capitalize it? My initial thoughts were to fund APACHE Skateboards with the sales of Douglas Miles’ fine art. I was already a fine artist. I knew I was going to keep selling, because there was already demand for my fine art. I shifted some of that income to producing products and projects for APACHE Skateboards. 2) What difficulties did you encounter with raising capital to start your business? It was difficult to raise the amount of money that I wanted to create the amount of product that I wanted to create, because about 30 percent of the product that I create, I give it away. It’s given away to the skate team, to the community, maybe to friends, or sometimes people write to me for fundraisers. So, sometimes I have to wait longer to save money in order to produce more product, the garments, the clothing, stickers. When I did save the money, and the money was coming in from the sales of fine art, that’s when I would produce the skateboard products. Getting back to the initial challenge: It was waiting to make the sales or trying to sell more. Sometimes it worked that way; sometimes it didn’t. A lot of artists, their income fluctuates, and it can fluctuate for different reasons.

Douglas Miles’ drive to succeed as an entrepreneur came from a self-determination so powerful, it was like the will to survive, he says. “In the process, I also felt like I was doing something revolutionary—taking and putting a Native American stamp on something people didn’t necessarily think was Native American: skateboarding.” Miles launched APACHE Skateboards and APACHE Skate Team 15 years ago, and the brand has only grown steadily overtime—each new product and project funneling revenue to support the next. As an artist living and working in San Carlos, Arizona, on the Apache Nation, not only is Miles a part of the community and culture, in addition, he’s making the culture.

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4) Were you aware of any programs for Native entrepreneurs available in your community or through your tribe? The San Carlos Apache Tribe does have a relending program geared toward funding small businesses on the reservation. I didn’t use it for similar reasons. As a new business, you want someone to guide you through the steps. With the initial application, they want you to foresee your market for the next five years. The products that I make are so unique; it would be different if I were opening a restaurant or hardware store in a rural area. My products are skateboards. They wanted to see a return on investment and for me to identify competitors in the market, but mine was more of a niche business. I also didn’t want to apply to the program, because I didn’t want to go into debt, and have to perform in a unique mar-

PHOTOS & GRAPHIC COURTESY DOUGLAS MILES

3) Were you aware of any federal or Native American programs to help you finance your business, and did you feel that you had access to them? Did you take advantage of those programs? I was aware that there were programs that would loan to small Native American businesses, but I didn’t want to go through all the red tape. It was faster and easier and quicker for me to save my income from fine arts and create and pretty much self-finance and subsidize my own work and my own projects. I don’t think some of these programs are very practical when it comes to ease of use for small, Native American businesspeople.

ket. I decided not to apply for a loan. I felt it was more practical for me to self-finance through the sales of fine art. 5) Did you feel like you had the appropriate amount of business and accounting training to provide you with an understanding of how to go about accessing capital? No, I don’t. I don’t have much of that knowledge when it comes to accounting or business expertise. When my fine art career started to take off, and take off even more with APACHE Skateboards, it wasn’t overwhelming, but I’m not as technically business savvy as I can be. I’m always open to learning more. 6) What avenue(s) did you ultimately use to fund your business, and knowing what you know now, what funding paths would you recommend to other aspiring or emerging entrepreneurs? Well, I use my own career as an artist to fund my business. I use also the part of my career where I do public art projects. I have a skate company and skate brand. It’s a fully functioning brand. We travel. We do skate demos and skate-themed events. We help create awareness for healthy living. We do community building projects—all with the skate team. These are all revenue streams. Each time we go out, it creates a revenue stream for me to continue to

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create the product and these events. As demand continued to grow, it forced us to do everything self-contained in house. We became photographers; we became our own filmmakers. I became focused more and more on motivational speaking, presentations, community art projects. Because there’s such a great need in Indian Country for creative things and youth-based projects—not based on traditional sports like basketball or football, etcetera—that we started to fill in these voids. By walking through those doors opened by numerous tribes who invited us, that created revenue streams. Not only did it keep us on the road, it kept the company growing. By taking my speaker fee and turning it around and utilizing it to create product for my skate team, it became very circular. I tell people now: “If you support the art of Douglas Miles, you are supporting APACHE Skateboards. If you support APACHE Skateboards, you are supporting a Native community, and if you support a Native community, you’re supporting Indian Country.” 7) How did the process of raising capital to launch your business empower you as an entrepreneur? To create capital for APACHE Skateboards, it took a few months. Once I had the idea, I didn’t want to let go of the idea. So, I kept making art, selling art, putting money aside, until I thought I could

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SPECIAL REPORT produce the first mass-produced skateboard. Once I saw kids riding them, it gave me a great amount of confidence. It made me feel like I can do anything. It made me feel like I almost dreamed this into existence. For me, at that stage in my career, it was more important to be a creator than a consumer. I wanted to be a creator. When you’re the creator of something that’s unique, you can control the ideas, ethos, quality, message and where it goes. I don’t mean control in a negative way, just in the sense that you become the soul creative voice behind it. 8) How has access to capital changed over the course of operating your business? What additional business strategies have you used to help fund your business? I think as the business grew and became more and more stable, it allowed us to start to reach out to other businesses and companies to collaborate. We started to create more businesses, events and more products. It kind of all came together, and we tied it together on social media. If we had new products, we had a skate competition. If we had a skate competition, someone saw us and invited us to their reservation to hold one for them. Having the stability that we had, what it did is it created more awareness for our brand, company and products, which was no longer just product—it became projects. People look to APACHE Skateboards to create events around music, around art, around skateboarding, around community building with young people. Having access to more projects and capital allowed us to do more and be more.

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9) What would your advice be today for entrepreneurs who are just starting to seek funding for their businesses? I think the only advice I can really give entrepreneurs is that everything starts off small. Don’t try to do too much too fast. If you’re into food, it’s okay to start off with a taco cart and work your way up into a taco truck or van. If you’re in a taco van, it’s okay to go to a strip mall. Sometimes when people try to do too much too quick, it gets discouraging and they quit. 10) What are some of the ways that Indian Country could improve its support for funding emerging entrepreneurs? I think Indian Country could improve its funding for entrepreneurs… and when we say Indian Country, I want to say Native American Nations, I think they can really look at their own community as a highly creative base where anything really is possible. They should really look at the inventors or the designers or the creators or the businessmen and businesswomen in their communities as really the future of their tribes. Really, we are the future of the tribes. You can’t put all your eggs in a casino basket. Nothing is guaranteed. Tribes really need to look at new types of business, new types of industry—businesses and industries that are relevant. And they need to do it without fear. I think tribes are still in the fear stage, like they’re nervous. It’s hard to visualize success, too, when you haven’t really had any in Indian Country. This is why tribes go slow and sometimes they go backward. It’s because they haven’t had success, or they had a little bit, but sometimes tribal businesses fail. When you haven’t had much success, it’s hard to visualize it. That’s why it’s important for publications like Native Business to

show small, creative business owners using numerous methods to reach different kinds of success. What’s successful to me may not be successful to someone else in business, and vice versa. Tribes need to support small businesses fearlessly. They need to remove fear and the fear of failure. I do think it will be entrepreneurs who lead the tribe into the future for the next 5, 10, 20, 40 years….

CHIEF BURGERS

Thomas Begay (Navajo, Hopi) graduated from Northern Arizona University in Flagstaff, Arizona, in 2016 with degrees in management and marketing. Immediately after graduation, he struggled to land a job—so he looked to entrepreneurship. He took his detailed, 80-page business plan for a food truck business and began scouring for funding sources. He turned to the Navajo Nation, his local Veteran’s Affairs office, organizations near Window Rock, and the U.S. Small Business Administration. Yet his applications for business loans were denied. Ultimately, he needed to self-fund. Grinding it out in the restaurant industry, Begay and his wife Kendra Begay (Navajo, Hopi) saved $15,000 to purchase an old FedEx truck to house Chief Burgers, their gourmet burger and picadilly business on wheels, based in Window Rock, Arizona, on the Navajo Nation reservation. Native Business Magazine spoke with Thomas Begay about overcoming logistical challenges to bring his original vision to life. 1) When you came up with the idea for your business, what were your initial thoughts about how to capitalize it? The initial budget was written considering that more than likely it was going to be fully-funded with a small business loan through the U.S. Small Business Administration. (SBA). It turns out that food truck start-up isn’t on their list. 2) What difficulties did you encounter with raising capital to start your business? I turned to crowd sourcing on Kickstarter, because I thought everyone would be like “oh yeah, a native-themed branded gourmet

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SPECIAL REPORT burger truck would be really cool,” but I failed to get any support. The initial budget had to be re-written for a lesser amount, possibly increasing the likelihood of getting funded by the Navajo Nation Division of Economic Development (NNDED) Fort Defiance Business Development Office. At this point I turned to supposed micro-lenders online like: Kiva, Kabbage, Finance Factory, etcetera. The gist of all their statements was “no-capital for food truck start-ups.” Left with little options I turned to Banks and Credit Unions to see if there were any “yes’s available” for start-up brands. So, I rewrite the budget again, for functionality this time, and an entirely different pitch. I did make a few more runs at NNDED after we opened to see if we could upgrade from functionality. I had some exchanges with the CEO, which ended with a soft handoff to a Navajo Community Development Financial Institution (CDFI) loan officer. Not being brick & mortar is one thing, but a start-up that most envision as a taco truck, let alone trying to sell the idea of getting a slice of the burger industry; people think it’s crazy or disruptive. Lack of business start-up history was a common objection I was often confronted with. 3) Were you aware of any federal or Native American programs to help you finance your business, and did you feel that you had access to them? Did you take advantage of those programs? I was aware of the some Native CDFIs for the Hopi and other tribes in southern Arizona, which I learned of in school. I looked up some online, but couldn’t get any momentum, exchanged a few emails. Other than the promising lead from the NNDED, I felt that CDFI’s weren’t accessible to me. 4) Were you aware of any programs for Native entrepreneurs available in your community or through your tribe? Nothing like mentorships or incubator programs exist in the Window Rock area, other than Indigehub, which is a nonprofit organization that provides basic business infrastructural needs. 5) Did you feel like you had the appropriate amount of business and accounting training to provide you with an understanding of how to go about accessing capital? Yes, I feel that I have had adequate training and experience to equip me with an understanding on how to access capital. Like pitching to investors is one thing I’ve considered; but forming a board or emplacing the right management team is an entirely different set of questions that I wouldn’t have the answers to. 6) What avenue(s) did you ultimately use to fund your business, and knowing what you know now, what funding path would you recommend to other aspiring or emerging entrepreneurs? Self-funded was the only option we were left with. I would recommend taking advantage of every opportunity to help with your business. What’s the worst that could happen? They say “no.” But you will never know unless you ask the question. No answer is ever set in stone, breathe outside the box and make impossible possible. Knowing what I know now, I should’ve asked for a little more; because if I knew I was going to be broke the first few

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months, it would’ve cushioned the blow. 7) How did the process of raising capital to launch your business empower you as an entrepreneur? It gives you not only an opportunity to exchange ideas, and to refine and align your brand to be truly unique. It re-enforces your beliefs in the possibilities that could be, or [perhaps the] market research is invalid, and the business consultant is right that it's pointless to burn money. Like John Heywood says, “Rome wasn't built in a day.” I am patiently working on building a brand that says we the Indigenous people have game in the food industry too. For the Chief Burgers brand, I envision it empowering others. They could plug-into an established growing network that allows for location-based alterations and additions, while practicing their sovereignty and independence. 8) How has access to capital changed over the course of operating your business? What additional business strategies have you used to help fund your business? Gaining access to capital is still an option that’s been recently discussed; I’ve been looking into grants for incubator programs, and am not up for the idea of digging the debt pit deeper. Other than working side jobs to sustain our business, we’ve put profits aside to make some upgrades. We’re considering selling branded clothing on our days off to help with other necessary equipment upgrades and repair costs. If we sell it right, we’ll be able to scale up to new key markets we believe should bring brand awareness to new levels, and possibly growth and expansion. I am cautious on growing and expanding too quickly, I am aware of the potential of brand equity and proprietary secrets the can be replicated. I have some ideas on how to set it up, but lack the experience on what would be the best option worth capital. 9) What would your advice be today for entrepreneurs who are just starting to seek funding for their businesses? Have everything in order, an executable plan, realistic projections, entrant/exit and competitive strategies; remember you're making a deal and not just pitching. If you find yourself asking for startup capital, do submit everything they ask for and be quick to resolve any issues that may arise. If all else fails, get creative if you’re determined try to find your way. 10) What are some of the ways that Indian Country could improve its support for funding emerging entrepreneurs? Rather than creating barriers and resisting changes that are different, we should embrace those that are challenging the norms and creating new original concepts. I see a supporting trend for the new big name franchises establishing and monopolizing across the rez; like a new dollar store every 30 miles, or how one town has a McDonald’s and no competition, and in another town there is a BK, but no competition. After a while, your taste turns sour from having the same thing and same service; it gets old fast. I moved back in the spring of 2016 and by mid-summer wasn’t satisfied with the eating options, let alone the freshness of the foods. In conclusion, we should not forget about those who are creating and shaping inspiration in the world around us, but help and support them.

Native Business Magazine - December 2018

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Native Business Magazine - December 2018