Impact Investing in Native American Communities

By Drew Tulchin, Managing Consultant of UpSpring with Rafael Chapman, Analyst of UpSpring,


According to the US Census, Native American, Alaskan Natives and Pacific Islander indigenous people accounting for 1.6% of the total population. While small, the amount of investment and donations that serve this population is disproportionately even smaller. For example, well below 1% of US philanthropy goes to ‘Indian Country’. And, banks physically are often absent from Native communities, and their capital is, as well.

“When we went to start our business on our reservation, the bank’s loan officers looked at us like they didn’t understand what we were saying. We literally had to bring them to our site and show them. They were not able to interpret their underwriting with consideration of the sovereign laws of our Tribe, even though our business was viable.”
– Native American Entrepreneur in Northern New Mexico

The need for more jobs, updated housing, better health, stronger education, and increased incomes provides many areas for investment. Unemployment and poverty rates are much higher in reservations than even their surrounding border communities: the unemployment rate over 10% [1] and 30% of Indian housing identified as overcrowded, and community poverty rates that are the highest in the country nearly one-third[2].

Capital and wealth creation for Native Americans has not been solved through gambling. Of the 566 federally recognized tribes in the U.S., only 240 have casinos at all. And, much of this money does not stay in the community due to the nature of the working agreements with the casino management companies. A small percentage of tribes have had great financial success, no question, but there are still 100s of others where the standard of living is well below American averages. Native Americans have the least financial wealth statistically, even compared with other minorities.

Impact Investment is a Good Fit for Indian Country

Since the advent of socially motivated investment in the modern era, the drive for mission driven capital has been a good fit for investing in Native American opportunities. Most opportunities are in community investment. Challenges include there are few vehicles and limited communication about them. This makes matching capital difficult even for willing investors.

In financial terms, transaction costs are high and risk is difficult to quantify due to lack of ‘comparables’. There are additional factors, which can scare off a less initiated investor – like sovereignty, complicated Tribal governments, and communities that are opaque to outsiders. These factors can readily be addressed, but it often requires more time than alternatives, leading potential participants to pursue faster options.

A dollar injected into a Tribal economy can really make a difference, more so than many other options, and offer a viable return. Tribal government and the next generation of leaders are seeking new solutions to overcome the post-colonial cycle of US federal government grants. Therefore, new cash flows are important to bolster especially the more remote communities and those with little formal commerce.

With increased attention on impact investment, now is great timing to increase linkages between capital markets and Native American communities. Solutions to investment barriers are emerging. Formal Indian Business Alliances (IBAs), for example, hone the sovereign laws of a Tribe to match commercial legal requirements of surrounding counties and states. Training programs, including the local Native Community Finance in New Mexico and the national ONABEN, support business plan development for new entrepreneurs and financial education programs to increase assets.

Another investment path in Indian Country is leveraging capital market vehicles. Existing financial instruments include low-income housing, historic preservation and other tax-credits. These are the same tools used throughout the U.S. Other known community investment products, like New Market Tax Credits and Community Development Venture Capital, are rarely seen, most often due to lack of local knowledge and expertise in them.

How Can We Help Indigenous Communities With Community Investment?

While there are few channels to invest in Indian Country, their numbers are growing. Supporting Community Development Financial Institutions (CDFIs) and Tribal Designated Housing Entities (TDHEs) are two clear options. Of the 917 CDFIs in the US, an estimated 8% serve American Indian, Alaska Native, and/or Native Hawaiian communities.

The Native CDFI Network ( ), is a nonprofit organization with more than 70 members whose mission is to strengthen and promote “Native CDFIs creating access to capital and resources for Native peoples.” Among their many activities, the Network lists its membership to connect interested investors. And, it works with national organizations to raise the profile of Native lenders, as well as support policy initiatives.

Hopi Credit Association in the Southwest, and Four Bands Community Fund in South Dakota are just a select few of the members nationwide with outside investors.

What Are The Exemplary Organizations In This Field?

There are many shining lights of institutions doing great work. These are just a few with which we are personally familiar. It in no way advocates for a specific organization, and there are many other worthy entities that we welcome to be sited. Contact and we will list all recommendations on our blog- The goal here is to provide a wide range of examples:

First Nations Oweesta Corporation ( )
National Native Organization

This long-standing entity provides training, technical assistance, and investment to tribal members and Native lenders. Founded in Colorado in 1999, among its many other accomplishments, Oweesta has extensive research on Native financial education and asset building. It received the 2015 Education Program of the Year award from the Native American Finance Officers Association for its Building Native Communities program. Oweesta has managed 10s of millions of investor dollars with excellent repayment. It has served as a mezzanine financial intermediary, on-lending to smaller Native CDFIs.

CRAFT3 ( )
Regional CDFI

This nonprofit was founded in 1994 and has a strong track record working with impact investors. It has invested more than $333M in over four thousand people and businesses in the Pacific Northwest. In collaboration with ONABEN, CRAFT3 offers loans to Tribes and Tribal members in Oregon and Washington. This lender and technical assistance has particular expertise in many sectors banks avoid but which are vital to rural, local communities. Areas include financing land, agriculture, seafood, forestry, and child care. A Native example of positive impact is financing the Taala Fund, for Quinault tribal members, to support ten businesses that brought new local job opportunities.

Cha Piyeh, Inc (CPI)

Native Local CDFI

CPI provides capital to Ohkay Owingeh Tribal Members in New Mexico. [Disclosure: Author sits on the Board.] CPI offers specialized loans to young people with no credit, affordable consumer loans, home repair and home purchase. This young organization has helped nearly 100 families escape the trap of payday lenders. The staff continuously strives to improve the lives financially and economically on a daily basis. They recently closed on their first mortgage, which enabled a tribal member to sell his home to another tribal member. It recently began working with outside investors to increase its total portfolio, which is currently just under $1 million.

What Financing Options Are Available?

There are other avenues to support the development of Native American communities:

Calvert Foundation ( )
For Individuals and Institutions

Dedicated to growing the impact investment movement and providing community development financing to under-served communities, this CDFI has raised over $1 billion from over 15,000 investors since 1995. Through their Community Investment Note, the Foundation has been able to connect individual investors with nonprofits and private organizations addressing community needs such as job creation, affordable housing, and environment protection.

Efforts in Indian Country in the US include investing in financial institutions such as the Native American Bank (NABNA).

• Native Home Capital ( )
For foundations and high net worth individuals

This Southwest based organization is home to The Native Green Loan Fund. The Fund is a public / private partnership created with Confluence Philanthropy ( ). It set out to pool support of foundations to invest in greening Native American infrastructure projects, such as solar power, improved solar, and better heating systems. The goal of the fund is to leverage $10 million in shared risk program-related investments to leverage nearly $12 million annually in state allocated grant funds for tribal infrastructure.

Ohkay Owingeh Housing Authority (OOHA)
Tax credit for individuals, foundations and institutions with New Mexico tax liabilities

OOHA is the Tribally Designated Housing Entity (TDHE) of the Ohkay Owingeh Tribe in New Mexico. It has housed 100s of low income families, delivering financial education, homeownership education, and leading community development projects. It has received dozens of national awards for its cultural preservation, sovereign protection, and economic development.

Tribal members are working to bring more families back to live in their 700 year old historic plaza, which is at the center of the community. To do so, a new vehicle to raise capital was created in partnership with the New Mexico Mortgage Finance Authority (NM MFA). This provides a tax credit to supporters, applying a 50%  state tax burden credit, in addition to federal and state tax deductions. This opportunity is available to corporations, individuals, foundations, and other legal entities. The Plaza Restoration Project, called Owe’neh Bupingeh in their Native Tewa tongue, is a novel model to diversify capital sources.

The Future

A number of investment efforts are growing with presence in Indian Country. With the rise of technology, transaction costs are reduced. More opportunities will continue to grow here in the future. Some emerging examples are:

Peer to Peer Lending. Think of this as eBay for lending. With over 2 million members and more than $4 billion in funded loans, Prosper ( ) is one of the largest such lending marketplaces in the United States. People borrow from $2,000 to $35,000. Investors lend as little as $25 and earn a return. Kiva ( ), is a nonprofit organization that allows individuals to make small donations to microfinance institutions that provide loans and other financial services to underserved communities. They are expanding with Kiva Zip to offer direct lending to institutions, individuals and businesses, with interest in serving low income and minority populations with affordable capital to reduce poverty and spur economic development.

Online Portals. CapNexus ( ) is a searchable online database that provides social investors with detailed information about lending opportunities. By breaking information asymmetry constraints, this investment tool brings clarity and transparency to investment initiatives – including those in Indian Country, decreasing financial risk and increasing access to deals.

Crowdfunding websites such as Crowdfunder ( ) and Kickstarter ( ) aggregate small contributions from a very wide pool of people. With the recent changes in raising investment online, equity and debt is increasingly possible, in addition to the donation format that is done now. A successful crowdfunding in Indian Country was Project 562. This campaign raised over $200,000 to collect photographic stories from members of every Native American tribe in the US.

Pay for Success (PFS, sometimes called “Social Impact Bonds”) is an innovative funding model that drives government resources toward social programs that prove effective at providing positive results to the people who need them most. PFS expands available funding for service providers, expanding the pie. It tracks the effectiveness of programs over time to ensure funding is directed toward programs that work.

PFS enables governments to draw in greater and more diverse resources to tackle social problems by tapping private investments for the upfront costs of the programs. If the program is successful in delivering services that measurably improve the lives of the people it is meant to serve, then government repays those who made the original investment. If the program does not achieve its target results, government does not repay those who made the original investment.

This model ensures that taxpayer dollars are being spent only on programs that actually work. This model, first introduced in 2010 in the UK, has grown in the US. Seven projects have launched to date, with two led by Third Sector Capital Partners, Inc. ( ) to address underfunded social needs including homelessness and prison recidivism.

There are many more stories and organizations out there. Send opportunities to invest in Indian Country to us and we’ll post them for all to see . The potential is great, with high need to fill.


Article by Drew Tulchin, Managing Consultant of UpSpring (formerly Social Enterprise Associates}, a B Corporation with the mission of providing market driven solutions that solve real problems. With 15 years plus experience, Tulchin’s efforts have led clients to raise more than $100 million for triple bottom line efforts. He serves as Treasurer of the board of Cha Piyeh, Inc, the CDFI of Ohkay Owingeh .

In the fall, he will be joining Third Sector Capital Partners ( ) as Senior Director. He has an MBA from the University of Washington and BA, cum laude, in History and International Relations from Washington University. Reach him at

Rafael Caballero Chapman, who joined UpSpring in 2015 as an Analyst after finishing his MPA in International Financial Management from American University. He has honorary BA degrees in Economics and International Relations from the University of Delaware, and is originally from Caracas, Venezuela.

Article Reference Notes


[2]  National Center for Education Statistics (2008). Statistical Trends in the Education of American Indians and Alaska Natives. Washington, DC: US Department of Education.

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