Some estimate that as much as 90 cents of every dollar that enters Montana’s seven Indian reservations may end up being spent elsewhere. State policy makers like Casey Lozar say that’s because there’s a severe lack of business opportunities on tribal lands, and it’s bleeding local economies dry.
“A little less than a billion dollars are coming into the state because of our tribal governments and tribal institutions. A lot of those funds are not staying within the local economy. We know they are going on to border towns and the rest of the state’s economy.”
Lozar, a program manager in Montana’s Department of Commerce, is also an enrolled member of the Confederated Salish and Kootenai tribes. He spoke at a three-day conference held in Great Falls this week where Native American business leaders, bankers and state officials met to share expertise and ideas on how to grow the private sector in native communities.
In Montana, the Department of Commerce estimates that the private sector makes up about 80 percent of the state’s economy, and the public just 20 percent. But on reservations, that's almost completely flipped, says Heather Sobrepena-George, an economic development specialist for the commerce department.
“Indian country, by and large, is 20 percent private sector, if you are lucky. And then, 80 percent public sector. That just creates a frailty in the economies that we have to change. ”
Sobrepena-George, who is also of tribal descent, points out that her numbers are not uniform across the state. For example, the Confederated Salish and Kootenai tribes on the Flathead Reservation are outliers. They have a more robust economy and lower unemployment rates than the rest of the tribes in the state. In contrast, on the Rocky Boy's reservation, less than 10 percent of the economy is in the private sector.
But despite its challenges, Montana is still a model for for some other states. Courtney Two Lance lives on the Pine Ridge Reservation in South Dakota. She envies some of the innovative approaches Montana has taken to encourage native-owned businesses.
“I love the idea of their equity fund. We need that in South Dakota. So that’s something I learned here that we are going to hit our state legislators and say why don’t you do that? Montana does that. ”
The state-sponsored equity fund provides small grants ranging from $7,000 to $14,000 dollars to Native Americans. The idea is to help recipients start or grow a business.
Sobrepena-George says this type of capital is crucial to jump-start reservation businesses because there is a dearth of traditional lending options. Native Americans often have trouble securing commercial bank loans because they typically do not own land on reservations to offer lenders as collateral.
Sobrepena-George admits the impact of schemes like the equity fund is incremental.
“Yes, we are moving the needle, but it’s in one or two businesses at a time that employ one person, maybe full time, maybe more part time, but the ancillary effects of that are that there is more money for that business owner to support their family or purchase goods and services from other local businesses.”
A Crow tribal council member Shawn Real Bird reiterated Sobrepena-George’s calculus that private sector growth in Indian Country is often frustratingly slow. But he says on his reservation there is nowhere to go but up.
“It’s one business at a time, and right now we have over 100 LLCs at this point and time. They are getting government contracts. In fact, they are competing with other off-reservation contractors.”
Real Bird addressed the conference about a new pilot program through the state that will give tribal businesses the opportunity to be listed in Montana’s business directory.
Previously, only businesses incorporated under state law were listed in the Montana directory. Real Bird says including tribal businesses will allow banks and lenders to easily search for them when vetting entrepreneurs for a loan.
The program is slated to begin in October. If it’s successful, other tribal governments are expected to take advantage of it.
Promoting opportunities like these is a priority for the Montana Indian Business Alliance, the decade-old non-profit that hosted the conference in Great Falls. Organizers said there aren’t enough channels for Native American entrepreneurs to connect with one another and share best practices.
For Jeanne Baker and Teri Loring Dahle the conference provided a rewarding networking opportunity.
Baker owns a consulting firm and Dahle runs a photography and graphic design company. The two women both live in Browning on the Blackfeet Reservation but have never before crossed paths long enough to talk shop.
The duo says this business transaction is the only way they are going to keep dollars on their reservation.