Financial development movement comes of age

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WASHINGTON – The most impressive thing about the Native Community Development Financial Institutions convening in Washington wasn’t the turnout of 100-plus people, the awards ceremony and reception, the unveiling of a new financial resources Web site, or the panel discussion that made it clear Native communities are making headway against the financial abuses that have plagued many of them since the outset of the reservation era.

More on these vital signs in their place, but there is no upstaging the plain fact that 35 certified Native CDFI Funds were represented. In 35 Native communities, these nonprofit development organizations are bringing community-scale economic opportunity to Native households through financial literacy training, savings plans, business strategies, basic loans, informational networks, technical assistance with the general requirements of business and home ownership, and training in specific financial, administrative and other tasks. “There’s an incredible Native community [economic] development movement happening,” said Stewart Sarkozy-Banoczy, director of training and technical assistance for First Nations Oweesta Corporation. He described the movement as a process of building prosperity that begins with community programs but never ends.

Six years ago, despite measurable inroads against poverty in Indian country from other avenues, it appeared the CDFI process might not get started. The number of certified Native CDFIs stood at two: First Nations Oweesta Corporation and the Hopi Credit Association. Six years ago, Oweesta had only just become independent from its longtime mentor organization and current affiliate, First Nations Development Institute. And the Native CDFI program itself was just getting out of the gates after years of trouble, foot-dragging and delay from its federal parent department, Treasury. Taken altogether, it was enough to raise doubts about the viability of the CDFI movement in Indian country.

But it was clear at the convening that Native CDFIs are here to stay. Oweesta became, and remains, the only national Native CDFI intermediary, as certified by the CDFI Fund of the U.S. Treasury Department (this means among other things that it is certified to assist other organizations in becoming CDFI Fund-certified). The Native CDFI Fund at Treasury, kick-started by CDFI Fund Director Ellen Lazar and her deputy, Morris Jones, at a directive from former Treasury Secretary Robert E. Rubin, then stabilized and established by Navajo development specialist Rodger Boyd and his Oglala lieutenant, James Berg, became a fixture; as of February, it had directed $22 million to Native initiatives.

The Native CDFIs have done as much as gaming to change the very conception of prosperity in Indian country. Like the college student who figures out that hand-to-mouth education grants can be dispensed with once a diploma improves one’s earning power, Indian country has graduated from what may be termed the “grant-writing-as-economic-growth” phase of development.

As Elsie Meeks expressed it on Nov. 1, her sixth anniversary as executive director of Oweesta, “So many tribes have existed by selling poverty. We’ve gotten our federal support, and our grants and all that, by being poor. ... We’re not selling poverty anymore. The message is about opportunity.”

But where transgenerational isolation from mainstream economic activity means financial literacy is new, the first emphasis has still got to be on household budgeting, saving instead of consumption, bank accounts and credit records. Oweesta has learned from experience, Meeks said, that only once a basic level of fiscal accountability has been achieved can individuals go on to incremental personal savings, small-business strategies and loans or “micro” loans. From there, as individual learning curves work out in small businesses that reinvest in Native communities and in better economic messaging and practices overall, the American mantra of economic opportunity becomes meaningful for Indian country.

“Doing this type of work in Native communities can be especially hard,” Meeks observed. “For many Native people and tribes, the idea of private assets and ownership is often viewed as diametrically opposed to their cultural ways and traditions. Therefore, we wanted to honor the efforts of those who are committed to making Native CDFIs a force for change in their communities.”

The honorees were Citizen Potawatomi Community Development Corporation in Shawnee, Okla., for outstanding achievements by a Native CDFI; and Susan Hammond, founding director of Four Directions Development Corporation of Orono, Maine.

The Citizen Potawatomi organization offers a combination of training, technical assistance, loans and financial education for enterprises that serve the Citizen Potawatomi Nation. Through 76 “micro” business loans, it has invested $5 million in Native-owned businesses and extended more than 300 loans totaling more than $300,000 dollars to employees of the nation. The nation’s number of small businesses and jobs has increased as a result.

Since its inception in 2001, Four Directions Development Corporation has built a portfolio of $2 million in housing and small business loans, while establishing a network of partners that range from bankers to Quakers. Hammond has spearheaded initiatives that expanded the organization’s services to every Maine tribe, and generated a capital campaign out of a political setback for tribes with the Maine electorate.

Other highlights of the convening included a panel on predatory lending in Indian country that discussed some best practices for progress against them, and the launch of a Native financial resources “portal,” Our Native Circle, accessible at http://ournativecircle.org.

The Native CDFI convening was one corner of a much larger conference hosted by Opportunity Finance Network, financial intermediaries whose members had originated $11 billion in financing through 2005. Its stated goal is “closing the gap between promising opportunities and real accomplishments for our nation’s people, communities, and markets that are outside the economic mainstream today.”