Rearranging the Deck Chairs on the Titanic
When we talk of financial literacy, especially in the American Indian reservation communities that are the focus of most of our efforts here at First Nations Development Institute, we need to keep some perspective. Because financial literacy is hardly an economic development strategy; it is more closely related to a tactic.
Yes, there are many advantages to teaching Indians the benefits of financial management. A couple of years ago, however, I was having a conversation with the wise and wonderful Linetta Gilbert, my then program officer at the Ford Foundation. And it did not take us long to come to agreement – that teaching financial management to reservation residents whose annual income is, on average, $7,900, while valuable, is much like rearranging the deck chairs on the Titanic. Helping folks better manage their incomes is not going to allow them to ‘save themselves to prosperity.’
If we want to empower folks, and create real economic change and possibilities for wealth creation, we need to move beyond tactics and into full-blown economic development strategies. One way in which reservation residents can create ‘game changing’ wealth strategies is through entrepreneurship and business creation. Think about it. A small (even a micro-) business that nets $160-$165 per week, will essentially double the annual income of Indian reservation residents.
This is the reason why the emerging community development financial institution (CDFI) industry has been so important, because it is making debt credit available in reservation communities where traditional banks and financial institutions still fear to tread. And with 59 certified Native CDFI’s currently serving Indian Country and another 50-60 in the development pipeline, it is time for us to envision a solution for the next step of small business financing for Indian reservation entrepreneurs – equity capital financing. Imagine the growth opportunities for Indian businesses with real equity for working capital, etc. Imagine what this will mean for Indian Country and strengthening tribal economies.
I believe that strong Native communities can be built through visionary economic change, and we can accomplish this together through your continued support. In our newsletter next month, you will learn more about how you can help us share in the work of equity capital financing and growing the number of Indian reservation entrepreneurs.
