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Nez Perce businesswoman wrangles small firm into national powerhouse

SPOKANE, Wash. -- When Jo Ann Kauffman began her small business in 1990,
she had no idea how its explosive growth would alter her future as she
strove to put an "Indian face" on "work that matters."

Kauffman, Nez Perce, started Kauffman & Associates, Inc. as a congressional
lobbying enterprise in Washington, D.C. while her husband was working for
then-Sen. Brock Adams, D-Wash. She had no capital and had to borrow desk
space from a friend with a business on Capitol Hill. "The first couple of
times I got paid, almost all the money went into computers, copiers, fax
machines and telephones," she said.

With some money came expansion, but the number of employees stayed below 10
until recently. Today, KAI is a thriving consulting firm with about 40
employees. The central office is located in Spokane, with smaller offices
in Washington, D.C. and Sacramento, Calif. KAI also maintains a branch in
Kamiah, Idaho on the Nez Perce Reservation.

Kauffman is the sole owner and executive officer of the business. Her
husband, an attorney, is involved with the business as the general counsel
but "he works for me," Kauffman laughed.

After five years in Washington, D.C., the family relocated to Kamiah. "The
children were getting older, and we wanted them to be closer to the
reservation and get to know their family," she said. "It was a wonderful
experience. We stayed in my grandparents' old allotment home. We renovated
it, then bought another house and put the office in the allotment home. The
children could walk home from school.

"It was a great environment, but difficult [running] a business there
because [the] Internet wasn't readily accessible and it was hard to find
the kind of people needed to employ for different contracts."

They moved to Spokane in 2000 because of the good employee pool provided by
the nearby universities, as well as the easy access to Spokane
International Airport.

Leaving Washington also meant a change from lobbying to government
contracting. Contracting has been a major portion of the business since
that time.

"Currently we have several very exciting contracts. We just secured a
contract with the Substance Abuse [and] Mental Health Services
Administration, part of the federal Department of Health and Human
Services," she said. "We will be working with some high-risk Indian
communities across the U.S. to help provide training and support to
community workers in the areas of bullying prevention, violence prevention
and suicide prevention among young Indian students. We've hired ... Dr.
Paulette Running Wolf, a Ph.D. in clinical psychology, to manage that
project, bringing mental health and behavioral health kinds of resources
and interventions to those communities over the next 18 months." Running
Wolf is a Blackfeet tribal member who lives in Montana.

Another current project, with the Department of Education's Office of
Indian Education, is a communications outreach and technical assistance
contract to get the word out about effective methods and resources
available to assist Indian education, as it specifically relates to the No
Child Left Behind Act. KAI coordinated a national conference on Indian
education earlier this year in New Mexico, and created a dynamic Web site
-- www.IndianEducation.org -- featuring resources for teachers, students,
parents and school administrators to improving understanding and find
education-related tools.

Another contract of interest is with the National Museum of the American
Indian. "It's a very fascinating contract," Kauffman commented. "They'd
like to some day be able to allow every tribe in the U.S. to be able to
tell its veterans' stories.

"We gathered an advisory committee and held some focus groups with tribal
leaders and veterans ... We proposed a digital storytelling process where
veterans would be gathered in clusters with scanners, audio recorders,
digital cameras and video cams and other technology available to help them
tell their stories and record it in a way that captures it. Three are
presently done. They [the museum staff] were so excited about it they
wanted to move forward. They have provided a second round of funding for
capturing eight more stories from World War II and Vietnam veterans.
Barbara Arragon [Crow/Laguna], our representative in Sacramento, is working
on that project."

One final project of interest deals with the Small Business Administration.
"We will be working with Native American entrepreneurs around the country
helping get their businesses up and going or helping businesses that are
languishing a bit. It may be using fresh market research, helping with
branding or imaging or logo development.

"We worked with 50 businesses in the first go-round and were just funded by
SBA for 40 more. This is a nationwide program, although we're focusing on
four specific communities where we'll bring in design, messaging and Web
design people, do some brainstorming with each group, and give them
something tangible. Those communities will be in Oklahoma, New York, Alaska
and here in Spokane," she said.

Last May, KAI acquired a company in Spokane called InSite Web Design. KAI
had worked with them on various projects in the past and when InSite
decided to shut down, KAI acquired the business and hired its programmers
and designers. "Having that new component is pretty exciting. We've been
turning out a lot of materials. All the things we used to contract out we
now do in-house," Kauffman said.

The graphic artists and Web design programmers have allowed KAI to launch a
much more aggressive marketing campaign in that area. "The things we've
produced in a short time are really exciting," Kauffman commented. "We've
just produced a 15-month calendar for the DOE that turned out wonderfully.
We recently returned from the National Indian Education Conference and
those things were going like hotcakes," she exclaimed.

Recent expansion has created a new set of challenges as well as
opportunities. The Spokane office has become crowded, bringing challenges
in terms of financing and cash flow in addition to space. KAI located a
building for sale in Spokane and made an offer. A 504 loan through the SBA
leaves KAI needing to come up with just 10 percent of the loan. The loan
was also bumped up to cover the renovation costs to make the building
suitable for business. Work is currently on-going, with a move-in date in
the near future.

Growth of the company also created a challenge in finding the right
personnel. Jeff Hamley was hired to supervise the Washington, D.C. office,
which was just organized last spring. Hamley has a Ph.D. in education from
Harvard and formerly served as president of Saginaw Chippewa Community
College in Michigan. He will oversee the current educational contract and
will be key to opening doors for additional contracts.

KAI is unlike retail-based businesses in that its product is actually
people that can be sent out on projects. It is intelligence-based rather
than inventory-based, and capital costs are in information technology.
Spokane has provided the qualified personnel needed in the central office,
and Hamley in Washington, D.C. and Arragon in Sacramento are well-qualified
in those locations as well. Asked what percentage of the employees were
American Indian, Kauffman commented, "roughly 50 percent."

Kauffman's background includes a bachelor's degree from Western Washington
State University and a master's degree in public health from Berkeley. She
started in the health care field for northern Idaho tribes before moving to
Seattle as executive director of the Indian Health Board. From there, she
moved to Washington, D.C. and started her own company.

Asked about other Indian consulting firms, she commented, "Across the
country there are a handful of such companies and they do excellent work as
well. Several are located in D.C. and others are scattered around the U.S.
For the most part, there aren't enough of us to step on each others' toes.
We know who each other are and respect each others' work."

"The people we employ are very compassionate about the work we're doing,"
she continued. "Their resumes show they've done work with Catholic
charities or other tribal organizations, community colleges and local
nonprofits. It's a little different profile than the 'for-profit' kind of
mentality. It's doing good work to make a difference in the lives of people
in a for-profit environment.

"What distinguishes us from all the rest, the consensus we hear from folks
we're working with as well as our competitors, is that KAI tries to put an
Indian face forward on everything we do -- not just in terms of employment
but also in terms of our approach. We try to do things in a way that
reflects our understanding that what we're doing is important and could
make a difference in the lives of people at the community level. Our slogan
has been, 'We do work that matters.'"