Native CDFIs

Recently, I visited with a Quinault Tribal fisherman (Rex) who also serves on the board of a Native Community Development Financial Institution (CDFI).  A Native CDFI is a lending organization that serves their community by allocating capital, like a bank, and whose purpose is to strengthen their community financially.  Indian Country is, generally speaking, underserved by lenders.  Rex told a story that represents well the benefit provided by a Native CDFI to community -business owners receive forward looking advice to make good decisions and tribal members learn tools they can use to do better business and pass it on to others. 

The story goes as follows:  A grandmother meets with Rex to discuss a business idea; she has been selling native artwork for years on a part time basis and is looking to turn her experience into a larger business.  Rex spends the afternoon asking questions like how will products be priced?  What is the gross profit margin on each item?  Who will be the new customers?  How many items does she currently sell and to whom?  What is the plan for production; self produce or have a team making things?  Where will items be sold, out of home or a commercial site?  Rex used questions to turn the woman’s story into numbers.  With those numbers, Rex established a breakeven.  Breakeven is the point where expenses and revenue are equal; said another way -there is no net loss or gain, the business is even.  Breakeven is calculated by dividing operating costs by gross profit margin, gross profit margin is measured by subtracting costs of goods sold (COGS) from sales price. 

                                                         Operating Costs

                Breakeven  =        ____________________________

                                               (Sales Price - Costs of Goods Sold)

Rex and the grandmother agreed the numbers made sense and a gross sales number was established to show how much the woman had to sell in order to make her business work.  The Grandmother thanked him for his time and said she had some things to think about. 

Sometime later Rex met back up with the grandmother.  It was at a place where she was surrounded by family, children and grandchildren.  The grandmother told Rex her time with him was extremely helpful and she was doubtful her business would work because the sales number necessary to achieve profitability was too high.  The better option was to continue to sell her wares on a smaller scale rather than go big.  Then something else happened.  The woman’s family stood in on the conversation and her family, children and grandchildren, talked to Rex about breakeven.  The grandmother had shared her experience working with the numbers and passed down the knowledge she had gained.  This is easy to understand because Nate Americans are story people.  It is inherent in our culture to pass down lessons through story.  The net result of Rex’s time was sharing a financial tool that was then passed along multiple times. 

I like to believe that this story of Rex and the grandmother is happening many times over in Indian Country as Native CDFI’s are popping up all over the country.  There are a dozen or so in Washington and Oregon (Quinault’s Taala Fund, Chehalis, Lummi, Colville, a business development center in Squaxin Island, etc.)  I believe Native CDFIs are one of the multiple things pushing forward progress in Indian Country faster as time goes on.  My place as a lender in Indian Country, working for a CDFI, is the same as Rex.  We council individuals, one at a time, in an effort to inject capital into Indian Country; capital in the form of 1) Knowledge, 2) Relationships, and 3) Dollars -if necessary.

Jim Stanley freely shares his knowledge in an effort to foster economic development success in Indian Country.  He is a tribal member of the Quinault Nation, Treasurer of the Tribal C-Store Summit Group, and Chairman of the Quinault Nation Enterprise Board.