Accessing the Resources and Capital to Support Economic Development - Part 1 (Virtual Training Session)

Economic Development Resources and Funding Sources

As tribes and Native communities seek to develop a strong foundation for economic development activities and strategies, they must also identify the array of available sources of funding, financing and/or customers/clients that will support the enterprises and projects that will ultimately implement portions of these strategies.

This session provides a non-exhaustive list of funding sources and the eligible uses and combinations of these sources as well as training on how to advance economic development through external borrowing/financing of activities (as opposed to purely grant-funded approaches) during the development and implementation of financing plans. 

Training Summary

Session Slides:

Subject Matter Experts:

Identify Types and Sources of Funding

Once you have developed an economic development plan, accessing the funding needed as part of your implementation should follow a process that takes you through funding identification, evaluation, and utilization. 

First, it is critical to understand the different types of funding that exist to fund community economic development projects in the first place. (slides 6-11) 

1. Grants are funds most often provided by governments, foundations, or other institutions that do not require repayment but come with strict requirements related to their use 

2. Loans are typically provided by banks or other lending institutions in the form of borrowed money that needs to be repaid with interest 

3. Tax incentives, like credits or reductions, are used to reduce tax liability and thus lower the overall financial burden of projects while stimulating outside investment 

4. Philanthropic capital often comes from charitable organizations or foundations in the form of donations or other investments 

Identify Projects, Evaluate Terms, and Narrow Funding

For your specific economic development plan, you should follow a process similar to the one below. 

1. Inventory available funding sources by looking at available lists from federal agencies, the White House Council Funding Clearinghouse, Native American Bank, and elsewhere to understand what funding exists to fund the projects in your economic development plan (slide 12) 

2. Identify specific project(s) within your plan to be funded and their key characteristics including their relationships to other projects in your plan, the timing or sequencing of project implementation and funding, and the amount of funding needed (slide 13) 

3. Catalogue and evaluate the fundamental characteristics for your project that each funding source will need to comply with to get a sense of which funding sources from your longer list make sense to use for the project on hand (slides 13-14) 

   • Use a matrix like the sample provided to organize your research based on the relationship of individual projects and their dependencies to one another and to the funding that is available for those activities (slide 14) 

4. Narrow your funding sources to those that apply to your project(s) (slides 13) 

5. Develop a financial structure and “stack” your capital (slides 15-16) 

   • Develop (or adjust) a budget; engage with financial institutions; design implementation mechanisms; evaluate financial sustainability; get stakeholder engagement and approval; monitor your financial structure 

   • “Capital stacking” is a helpful tool to organize different funding sources for a project based on priority of repayment and risk levels 

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Native American Bank

Payton Batliner from Native American Bank (NAB) provides an overview of the bank’s mission, services, and expertise in financing projects. 

Native American Bank is a traditional bank that offers savings and checking's accounts, etc., as well as a certified Community Development Financial Institution (CDFI). The bank is mission-focused, serving Native communities and lending to tribal enterprises, individual business owners, and other entities across the U.S. It is headquartered in Denver with branches expanding into other areas, like the Pacific Northwest. 

• NAB has around 23 years of experience lending on to trust lands, which comes with a lot of legal and regulatory hurdles that a lot of other banks do not have the capacity or experience in. 

• NAB provides commercial loans (ranging from $100K to $40M), focusing on businesses in Indian Country, including construction, working capital, and term loans. 

• NAB works with various federal programs to offer unique financial solutions for trust land projects, including BIA, SBA, and USDA, to support loans with lower equity requirements and increased funding potential, especially for rural or trust land projects. 

• NAB utilizes New Market Tax Credits (NMTC) and Low-Income Housing Tax Credits (LIHTC) to support community development and affordable housing, leveraging these programs to reduce project costs and enhance financing options. 

• NAB employs innovative structuring, such as using alternative collateral sources (e.g., water settlement funds, sales tax revenue) to complete projects and working collaboratively with other CDFIs to secure funding for larger deals. 

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Further Considerations for Funding Evaluation

To help accomplish the steps necessary to access funding for your economic development projects and plans, there are some important considerations that can help steer you in the right direction. 

1. Assess the availability of required documentation or data and best practices for effective storytelling (slide 43) 

2. Consider the overall costs associated with funding applications such as staff time for preparation, consulting and professional services, application fees, and application support materials (like the compilation and collection of data) (slides 42, 44) 

3. Access additional technical assistance to support decision-making. For grants, this often comes as a resource included in the award of funding. Other types of funding institutions offer different training, like Native CDFIs with often assist with financial literacy training (slide 45) 

4. Consider partners with access to other sources of capital or technical capacities in the form of collaborative partnerships with academic and research institutions, public-private partnerships, or tribal-state and tribal-federal partnerships to unlock additional funding (slide 46) 

5. Review the intensity and term of compliance or reporting periods for the funding sources in consideration. It is critical to have ample qualified staff to manage these aspects of funding sources, and to consider the additional associated costs (in time and dollars) (slide 47) 

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Grey Snow Management Solutions

David Yuen Tam, the CEO of Grey Snow Management Solutions, a company owned by the Iowa Tribe of Kansas and Nebraska, discusses their team's approach to supporting tribal infrastructure projects, focusing on sustainability, sovereignty, and project planning. 

Grey Snow, named after the Iowa Tribe of Kansas and Nebraska, who self describe as Baxoje – Ba meaning “snow” and Xoje describing “ashes or ash-colored” – is the Tribe’s economic development enterprise created to manage, build, support, enhance tribal sovereignty, and provide expert services for government and commercial clients nationwide. 

• Grey Snow supports tribal sovereignty in areas like energy, food, and communication. They prioritize building capacity within tribes for project ownership, including infrastructure and grant writing. 

• Grey Snow focuses on long-term, sustainable goals for tribes and assists with business planning. Their process includes evaluating a tribe’s capacity, commitment, and risk, including financial health and project management abilities. 

• The company offers flexible, plug-and-play solutions for tribal needs, providing services from feasibility studies to project operations without taking equity or ownership. 

• David emphasized the importance of planning early and fully understanding the functioning requirements of the funding sources you use. David stresses that capital stacking varies project-to-project.

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Implementing Funding Decisions

Once you have your financing plan and have considered tapping into available assistance, the process for implementing funding decisions requires the collaborative efforts of strong members on your team, partners in the process, and sound management strategies. 

1. Create a team to implement your funding decision that includes your tribal stakeholders, technical advisors, government staff, financial department, and legal aid (slide 50-52) 

2. A funding coordinator is critical to ensure that ongoing project management and funding requirements are coordinated in a timely and thorough manner 

3. Compile data and documentation (which may require the collection of new data) to support funding proposals. This can be a challenge, though, since the structure of the entity seeking funding changes your access to said funding. (slide 53) Read more about tribal business structuring 

4. Write funding proposals that leverage your community’s unique needs and opportunities, your team’s capacity to manage funding sources, and your organization’s financial literacy (see Grant Writing Best practices) (slide 54) 

5. The proposal writing process is an opportunity to unlock additional funding by demonstrating financial planning capacity and thorough navigation of funding requirements 

6. Develop a framework for expenditure, reporting, and compliance that defines processes for collecting or compiling information, managing where that information is stored, who has access to it, and the staff responsible for submitting the required documentation on time (slide 55) 

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Pascua Yaqui Development Corporation (PYCD)

Daune Cardenas, CEO of the Pascua Yaqui Development Corporation (PYCD), shares insights into her organization’s efforts to build capacity, navigate funding opportunities, and create a trades training center while overcoming challenges along the way. 

PYDC is a parent/holding company wholly owned by the Pascua Yaqui Tribe that develops companies under its umbrella. The purpose of forming the PYDC is to diversify and strengthen the Tribe’s economy. PYDC is headquartered in Tucson, Arizona, on the Pascua Yaqui Reservation. 

• Daune shares how the PYCD leverages multiple funding sources, like ARPA, USDA, and EDA, to support projects and build capacity, particularly in construction and trades training. 

• She discusses the difficulty of navigating complex federal funding requirements, especially with EDA grants, and the need for bridge loans to pre-fund projects. 

• Daune stresses the importance of partnering with experts to navigate intricate funding processes and ensure success in securing and utilizing grants. 

• Daune highlights the tribe’s efforts to establish a tribal training center to provide career opportunities for tribal members, using both local and extended community resources. 

• The tribe plans to build the indoor training facility, utilizing new market tax credits and stacking funding sources. 

Daune invites CoP members to connect with her and she will share her expertise on tribal economic development, as well as her experience with projects and planning.  

Closing Thoughts 

Questions, with answers from the Resource Group and fellow participants, will continue to be posted in the Knowledge Bank on the CoP website. If you have questions that you want answered, please ask in the LinkedIn group or share it with the administrators. 

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