See how a $45 million grant is changing the financial lives of Native American communities

EAGLE BUTTE, S.D. – The Mountain | Plains Regional Native CDFI Coalition won a Build Back Better Regional Challenge (BBBRC) grant for a total of $45 million earlier this month. Now, they’re putting that money to work.

“It’s really going to change the face of the industry with this sort of huge infusion of capital,” said Lakota Vogel, Executive Director of the Four Bands Community Fund CDFI based in Eagle Butte, South Dakota.

The Coalition, led by Four Bands, is a group formed from nine different Native Community Development Financial Institutions throughout the Midwest.

Native CDFIs

CDFIs are a type of financial institution, like a bank or credit union, that specifically works to provide financial services and advice to places that otherwise might not have access to them. Native CDFIs have a customer base that is at least 50% Native American.

“You find where your community is left out of accessing capital for various reasons. And then you create the loan products to allow your community members to gain access to capital,” Vogel said. “A lot of our small businesses would have ideas, but banks just weren’t funding under the $100,000 threshold. So, we helped with the small business startups and then we grew into consumer lending, which is building people’s credit scores.”

 Only 14% of Native American reservations have a financial institution. Even worse, 15% of Native Americans have to travel 100 miles or more to the nearest bank or ATM. Native CDFIs are an effort to promote financial access and management in these areas.

“ I think it’s just something we all need to learn to talk about better. And we’re that group that helps people talk about it,” Vogel said. 

The grant

The grant is already starting to have an impact.

From the Coalition’s grant proposal:

“So we actually received a lot of partner funding to get some of these things already moving,” Vogel said. “I’d say it started today, if not yesterday.”

 The grant will primarily go towards supporting three vital aspects of the CDFIs operations: fundraising, training, and recruitment.

As nonprofit organizations, CDFIs rely heavily on large donors to acquire the capital that use to fund their operations. The Coalition hopes to be able to assist its members with this vital function

“What this group has done is we’ve convened a group of 80 different funders over a two year period of people interested in funding Native American communities. So it’s helping us build up and hone our storytelling skills, talk to the right investors and teach them about the opportunity that’s here in our communities,” Vogel said.

Currently, it can take as long as six months to fully train a new employee. The Mountain | Plains Coalition hopes to streamline this process by creating a centralized onboarding program used by all of the member CDFIs.

According to Vogel, this has the potential to cut training time down to two weeks, while also familiarizing new employees with the different coalition members.

But training workers only works if you can hire them in the first place. Native CDFIs in particular have difficulty recruiting professionals to work in what can be some of the most remote areas of the country.

“Who wants to move to our area? I think every profession has an issue with that. So one of the next components is we’re going to start this recruitment strategy and we’re going to start talking about advice to college students,” Vogel said “Create a strategy to build the pipeline for the next level of workers at our organizations.”

In addition to hiring initiatives, the cooperative effort will allow native CDFIs across the region to offer more competitive benefit packages to prospective employees.

“I employ eight people. I don’t get access to the best health care plans or things like that because we’re so small.  We’re hoping to come together as a region, become members of something, and then offer better benefits to our employees so that we can attract the right talent,” Vogel said “So it’s sort of solving the problem, going a little farther upstream and trying to solve the problem of attracting the right talent.”

All of these group efforts will assist the financial services that each of the CDFIs provide, allowing them to more effectively give out business loans, issue mortgages, and provide financial literacy classes.

The Coalition

To some degree, the program came about as a side effect of the COVID pandemic. Unlike other groups that competed in the Build Back Better Regional Challenge, the Coalition began forming almost two full years prior to the grant competition, in February of 2020.

As Native CDFIs faced unique problems during the pandemic, Vogel found herself wanting to be able to share advice with other industry directors without “spending the first 30 minutes of every meeting explaining what tribal jurisdiction was.” The Coalition, a cooperative group of Native CDFIs, was born.

“We had no way to really predict what was going to happen to our economies in the middle of the United States and nobody was really talking about it in a way that helped inform our organizations. So we just needed to find each other,” Vogel said.

That the Biden Administration later launched the BBBRC challenge was just good luck, and the Coalition submitted their proposal.

Reach Out

The first loans to prospective businesses from the grant funding are expected to be available January 2023, but applicants are encouraged to get in contact with your local CDFI sooner. Find your closest coalition member with the map above.

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