Giving Compass' Take:

• The Northwest Area Foundation funds Native American communities through grants, mission investments, and community development financial institutions (CDFIs).

• Native communities are often overlooked in philanthropy and the foundation says funding collaboration is key to making an impact.

• Read about the misperceptions about the Native American community.

The Northwest Area Foundation tends to think of its investments in Native communities as long-term partnerships. Investments should not only deliver economic returns, but also support cultural traditions and build stronger relationships with communities through impact that lives on for multiple generations.

This sense of cultivating long-term partnerships, honoring the Native communities we serve, grounds our work. It also grounds our funding commitments.

There are 75 Native nations in the region we cover, which stretches from Minnesota to Washington and Oregon. Our foundation’s name came from the family of railroad giant James J. Hill. As the railroad sparked economic and demographic transformations across the United States, Native communities continually lost ancestral homelands, wealth, and the opportunity to thrive on their own terms—losses that reverberate today. In other words, our foundation’s assets and the struggles of Native communities are intricately connected.

Through our funding, we aim to acknowledge the inequities facing Native communities and recognize that those communities deserve much better. We support solutions to economic challenges led by and for Native communities, because we honor the right of Native people to control their own futures.

Yet our own funding is only a drop in the bucket. We’d love to recruit more like-minded funders, because Native communities continue to fly beneath the radar. A 2018 report from First Nations Development Institute shows that only 0.23 percent of philanthropic funding goes to Native communities, although Native people constitute two percent of the US population and experience a disproportionate level of need.

A number of our grants and mission investments support Native community development financial institutions (CDFIs), and for us, these investments have been transformational. Funders looking for opportunities to support Native communities should learn more about them. 

Native CDFIs are founded and led by Native people, and located in Native communities. They provide loans, financial assistance, education, and training for Native entrepreneurs and businesses—and they do so with the utmost cultural competence. They also play an essential facilitation role as a trusted investment partner. Their financial knowledge and strong connections to the local community and Native culture allow them to open up pathways between their economies and outside resources. This truly unique expertise has led to a very successful track record of helping businesses and entrepreneurs rooted in tribal economies grow, generate jobs, and cultivate fertile ground for further investment.

Our three mission investments in Native CDFIs are program-related investments (PRIs), which we define as below-market-rate investments that prioritize impact over financial return. Our PRIs come directly from our endowment, just like our market-rate mission investments and other forms of investing. This is unlike many foundations, which draw their PRIs from grants budgets. So if we lose money on a PRI, our endowment absorbs the loss without reducing our available budget for grantmaking.

Read the full article about funding equity for Native American communities through mission investments by Kevin Walker at Stanford Social Innovation Review.