American Indians might be the original ESG investors. Long-held tribal philosophies of investing on behalf of future generations have always infused the tribal definition of return. Now, millennial and Gen X tribal leaders are merging mainstream corporate business experience with tribal values to fuel sustainable development — increasingly, with external investors. While their goals include immediately funneling revenue to their communities, many Native American tribes also aim to restore and rebuild land and natural resource ownership lost through centuries of disenfranchisement.
Kristina Haskell grew up on a reservation, where many of her family still live. Urged by her parents and grandparents to gain a college education, she earned accounting credentials and rapidly expanded into investment advisory.
“Mainstream Americans know how to handle generational wealth. There’s a whole different reality for natives,“ said Haskell, CEO of Avalon Accounting. “I consider us to be first-generation entrepreneurs. I’m the first in my family to have a college degree and the first to start a business.”
Half Navajo and half Hopi-Tewa, her roots in the reservation throw into sharp contrast the differences between mainstream American household financial management and the powers and resources available to tribal members. Many elements of mainstream American financial stability simply don’t apply, Haskell said. Homeownership is irrelevant for reservation residents who aren’t allowed, by federal law, to own the land under the houses they occupy. Entrepreneurship is deeply embedded in many native cultures, but mainly through artisan and handcraft production, with little guidance for building revenue and hiring employees.
Casinos changed all that, at least for federally recognized tribes. (State-recognized tribes may or may not have landholdings and follow different rules for owning and managing tribal assets.) The Seminole nation opened the first Native American-owned and -operated casino in 1979. Now 241 tribes run casinos, producing billions in annual revenue. The money is plowed back into tribal health care, education and infrastructure. Thanks to casinos and other operations, those tribes have multigenerational expertise in financial management, supply chain and hospitality operations.
Casinos shape the popular impression of tribal economic growth, but even more important, especially for investors, are less flashy operations, said Miriam Jorgensen, research director of the Native Nations Institute at the University of Arizona. “Nongaming tribes grew just as much as gaming tribes in the 1990s and much faster than the U.S. economy overall,” she said. Agriculture, management of natural resources and government contracting are major categories of growth, and all are ripe for diversification and potentially, partnerships with non-native investors.
The Native American perspective dovetails neatly with contemporary ESG investing approaches, and native-led firms are capitalizing on the opportunities finally wheeling in their direction.
“We have been invited in and pulled in because of our common background, and the understand that we are truly fighting for tribal rights,” said Steve Gundersen, president of Tallsalt Advisors, an investment banking and management firm, and a member of the Navajo tribe.
“The mission of our firm is to bring the Wall Street skill set to the side of tribes. We are part of the community, 100% Native-owned, and in addition to serving the tribes and their best interest, which is beyond the fiduciary standard, we educate and promote opportunities in finance to council members and students, so they will think about this as a career,” Gundersen said. “Some tribal members will go out and be members of the finance and accounting industry outside the reservation, and some will come back to serve their tribes from the inside, in tribal operations, casino operations or other economic development.”
Tribal priorities entwine the immediate well-being of members with the sustainable use of natural and economic resources. Sometimes that results in deals that might make hard-line ESG advocates shudder.
For instance, one tribe enlisted Tallsalt to buy a coal mine that supported a fifth of Arizona’s power supply. The play would preserve 800 Navajo jobs and continue to bring the tribe $50 million annually in taxes and profits. With mixed feelings, Gundersen said, Tallsalt completed the deal. “Those jobs, taxes and profits are in place, at least for the moment,” he said. “That’s a good example of an investment that’s a strategic play, not just a financial play.”
As business and investment partners, tribes are somewhat analogous to privately held businesses, explained Dawson Her Many Horses, senior vice president of Native American banking with Wells Fargo and a member of the Rosebud Sioux tribe of South Dakota.
Tribes exercise both their sovereign right to confidentiality and a well-justified tribal skepticism about U.S. governments and corporations, which drives thorough due diligence of external partnerships, he said. And tribal business deals are structured differently from the normal spiral of capital raises culminating in an initial public offering. Instead, Her Many Horses said, nearly all tribes measure return in large part by the benefits reaped by the tribal community.
“Every tribe will be different and not every tribe will invest in the same way. They have different interests, but because they’re governments, they want to be good stewards of their tribe’s assets. Some have stayed with fixed income. Other tribes are diversifying their holdings and they are moving more to allocation models with public and private equity, and real estate,” he said.
“A lot of them have programs where they’re training tribal members to run businesses,” Her Many Horses said. “That’s what we want to see. As a tribal member myself, we understand how the profits of the businesses get used, not for the benefit of the original business but for the entire tribe. That’s why these businesses exist.”
Haskell’s practice has diversified as her Native clients seek fresh ways to blend their beliefs with business aspirations.
“We’re investing in indigenous women to prove that they’re investible.”
Jaime Gloshay, co-CEO, Native Women Lead
As she grew her public accounting practice, Haskell expanded into investment advisory services. Now, she works with a spectrum of external investors, from individuals to overseas corporations, who want to coattail on tribal tax credits, bond financing, federal contracting advantages and community development financial institutions. Outside investors need to appreciate that being a sovereign nation cuts both ways: Tribes have both advantages and constraints that mainstream citizens and investors do not.
One of her clients is opening a vegan restaurant featuring Native cuisine. Before the restaurateur could open, she needed to secure space, and her tribe had to gain special permission to build a strip mall on its land, which technically is owned by the federal government. Then a Native bank crafted operating capital, because the restaurateur had no assets of her own to put up as collateral.
Such complications demand patience from investors, Haskell said. “It’s an untapped market for investors looking for long-term opportunities. However, you have to know the lay of the land.”
“When we got access to education, we got educated,” said Vanessa Roanhorse, CEO of Roanhorse Consulting and co-founder of Native Women Lead. “We’re coming to the table ready, and we’re experts in some sectors. There is a collective power.”
Native Women Lead was founded in 2017 to build native family assets on their native terms. “We’re investing in indigenous women to prove that they’re investible,” said Jaime Gloshay, co-founder and co-CEO of Native Women Lead, who has a tribal heritage of Navajo, White Mountain Apache and Kiowa. “Our community defines wealth very differently. It’s not just assets and profits. After 500 years of economic exclusion and attempted genocide, trauma has a lot of effect on economic behavior.”
In 2020, Native Women Lead collaborated with a credit union to co-design a capital program that has since invested in seven native women entrepreneurs. This year, it is launching a program for indigenous women financial managers.
“We’re not represented in that space and when we talk with entrepreneurs, they aren’t represented,” said Liz Gamboa, executive director at New Mexico Community Capital, a nonprofit that partners with Native Women Lead and Roanhorse Consulting on an umbrella initiative, The Future is Indigenous Women.
Her experience at a Wall Street investment bank impressed upon Gamboa the value of the native perspective for investing. Now the nascent financial managers’ program is attracting experienced, midlife women eager to blend their industry expertise and native perspective and apply it to startup finance, venture capital and investing, she said.
When the Lumbee Guaranty Bank opened in 1971 — the first Native American-owned-and-operated bank — its president was not Native American.
“It was 1977 before there was a Lumbee who had the training to be president,” said Larry Chavis, clinical professor of strategy and entrepreneurship at the University of North Carolina Kenan-Flagler Business School. He’s a member of the Lumbee tribe and former director of the university’s American Indian Center.
“Now the top bank officers and many senior leaders are members of the tribe … There is more of a pool of folks now with the skills you need to engage in financial management, investing and asset management,” Chavis said.
Many tribes are reaching the arch of a hockey-stick talent trend, with a major wave of college graduates stepping into managerial roles, he said. While each tribe’s culture is different, most hold in common a very long-term — even eternal — horizon for returns on investments. And that return is usually framed in terms of sustainable use of resources and benefit to the tribe first, followed by short- and medium-term financial gain.
With a rising generation of business professionals and plenty of cash to put to work, many tribes are investing beyond their borders and core expertise. “The bigger tribes are diversifying more, but they need to have those resources for their future — to develop the next generation of talent, for education, for health and education and cultural revitalization,” Chavis said.
W.A. Tony Hayes grew up steeped in tribal culture but aspired to a mainstream corporate career. “It hones my skills for what I’m doing now,” said Hayes, now tribal chair for the Occaneechi-Saponi, a state-recognized tribe in central North Carolina. “I took all that I was aggressively pursuing in my younger years now to help American Indians in the corporate and business sector,”
With only 2,000 members and 40 acres, the Occaneechi-Saponi have been virtually invisible in the region. But now, as the tribe asserts its business acumen, it is also reclaiming its status.
“We’ve always had a presence in the area of Hillsborough,” said Hayes, referring to a town that was founded in 1754 and looks it, with colonial-era brick churches and houses studding its downtown. “But that was taken away from us. Now, it’s reenergized with our change in [local] leadership and our willingness to partner together in a stronger and more binding way. Before, it was more of a novelty.”
In the absence of federal recognition, which is a prerequisite for establishing a casino or managing natural resources as a sovereign nation, the Occaneechi-Saponi use their tribal status to bring state-granted contracts to mainstream partners. Its community presence has come full circle: Last spring, the tribe worked with municipal leaders to establish a recreated village of thatched huts and a fire circle, in Hillsborough’s riverfront park.
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