Urban Wire “Avenues of Hope”: How CDFIs Are Supporting Opportunity in Indian Country
Alex Tammaro
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Persistent poverty affects about 1 in 7 rural counties, and more than a quarter of the Native American and Alaska Native population lives in poverty, more than double the share in the general population. Legacies of racism, disinvestment, displacement, and resource extraction continue to prevent both rural and Native American communities from accessing the capital needed to promote opportunity and economic well-being via their cultural, economic, and geographic diversity. 

Community development financial institutions (CDFIs) strive to fill this gap as local advocates for underserved communities. The Partners for Rural Transformation (PRT), six rural-serving CDFIs spanning America’s diverse rural populations, have committed to lifting rural and Native communities from persistent poverty toward sustainable economic opportunity. 

PRT’s successes, outlined in an Urban Institute report, show that a common goal—to increase opportunity in these richly diverse communities—works, and leveraging regional assets can help stakeholders make the most of their investments. 

At a recent event, PRT members spoke to these successes, describing how their organizations meet their communities’ specific needs, how structural racism affects their progress, and what the federal government could do to invest in and support their communities’ economic potential and perpetuate growth and opportunity.

CDFIs serving Native communities can follow examples set by two PRT members, the Rural Community Assistance Corporation (RCAC) and the Native-led and Native-governed Oweesta Corporation, and help their communities flourish by acknowledging the history of disinvestment, addressing persistent knowledge gaps, and rethinking how funding reaches and is distributed in these communities. 

How two Native-serving CDFIs address persistent poverty

Like rural CDFIs, CDFIs serving Native communities on and off reservations require specialized approaches, not only because of their regionally specific cultural and geographic diversity but also because of centuries of disinvestment shouldered by Indigenous communities living in remote areas.

Suzanne Anarde, chief executive officer of RCAC, supports communities in the rural American West, including some of the nation’s largest tribal communities. RCAC’s projects include improving infrastructure, specifically water and waste water infrastructure (a long-standing issue exacerbated by the pandemic), supporting Indigenous housing programs, and building local economies by training entrepreneurs.

RCAC’s CDFI arm fills gaps in capital flow in areas experiencing persistent poverty by working to “shift the power paradigm” away from the usual “top-down approach,” according to Anarde. Building financial resilience by meeting communities where they are was a common strategy among PRT members.

CDFIs in Native communities are responsible for more than power via capital; sovereignty and autonomy accompany economic prosperity and resilience. Tribes’ status as sovereign nations—as a “country within a country”—has complicated and continues to complicate how funding flows, said Chrystel Cornelius, chief executive officer of Oweesta Corporation.

Formed specifically to address lack of capital in Indian Country, Oweesta’s target communities tend to be those on reservations in more remote areas, which, Cornelius noted, is “all intentional, in many regards”— referring to the forced removal of Native people to federally designated reservations, called “ishkwanjigan” in Cornelius’s Chippewa language, which translates to “leftovers.”

“Attaining true economic sovereignty entails the prevalence of having capital resources,” Cornelius said.

Like RCAC, Oweesta has found success in determining and meeting Native communities’ specific needs and navigating structural barriers that prevent capital from reaching these communities, such as persistently slow allocation processes with expensive, time-intensive applications for programs like the New Markets Tax Credit.

Fighting structural barriers and knowledge gaps  

Cornelius noted the most persistent and potent legacy of structural racism is the “underrepresentation—in any measure—of Native American communities, period.” Native voices have been excluded from policymaking conversations and research processes. As local advocates and intermediaries, CDFIs are “avenues of hope” for those facing structural barriers.

Cornelius cited lack of data as a critical knowledge gap. It’s difficult to find data disaggregated to a useful level while maintaining the privacy and security of those represented in the data, and relied-upon datasets —like those collected by the censusdon’t often represent rural realities. And specific qualities of Native communities, including exceptional remoteness, large margins of error, and small sample sizes, affect data quality and result in Native Americans and Alaska Natives represented as an asterisk instead of a data point in data visualizations. 

Data issues lead to false narratives tribes must overcome to gain access to capital. Preconceptions that investing in Native communities is risky become another barrier to community financing.

And lack of legal precedent has historically complicated tribes’ relationships with government. According to Cornelius, this has meant Native communities face trouble resolving trust land issues, navigating complications in building homes, and retaining collateral for small business development.

How the federal government could support rural Native communities  

Native communities, especially those in remote rural areas, are among the first to experience the effects of climate change, bearing the brunt of aging or poor-quality infrastructure, food insecurity, natural disasters, and the devastating effects of the pandemic.

Anarde and Cornelius agreed that balancing communities’ specific needs with the objectives of people with the capital to make a difference is where the federal government can support opportunity in Native communities.

When it comes to funding, only so much can be done with only lump-sum capital, Anarde said. “Get us money on the ground that we can actually do something with.... Give us longevity with that, give us the time.” Getting funds to those who need them the most goes furthest in creating opportunity, she said. 

The federal government could help meet Native communities’ needs by waiving requirements around matching funds for infrastructure from government grants, including basic quality-of-life infrastructure like water systems, said Cornelius. Matching a percentage on billions of dollars of investment isn’t feasible for communities experiencing persistent poverty; if the federal government were to waive these requirements, “we would see infrastructure flourish like we never have,” she said.

To support economic opportunity on reservations and within Native communities, government and investors could begin by tackling structural barriers and knowledge gaps and meeting Native communities’ needs for flexible capital.

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Tags Multifamily housing Finance Community development finance and CDFIs Native populations
Policy Centers Metropolitan Housing and Communities Policy Center
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