This op-ed, written by Kate R. Finn, Executive Director of First Peoples Worldwide, was initially published in the April 2024 edition of International Funders for Indigenous Peoples鈥� .
Designing for self-determined economic visions requires a shift in power from investor to investee. Deploying catalytic capital techniques allows for multiple forms of power shifting and power sharing in ways beneficial to the Native entrepreneur.
Indigenous Peoples have had varied, complex, and complete economic visions for thousands of years. These definitions encompass Indigenous conceptions of economic wellness, such as those described by 鈥溾�� and those put forth in . When Native entrepreneurs are ready to activate their business plans in the particular context of Indigenous economic wellbeing, there is translation required between these frameworks, the local context of the Native entrepreneur, and the investment needed to realize entrepreneurial and economic success. Often lost in translation is that the realization of economic success depends on prioritizing self-determination, or Indigenous Peoples鈥� ability to define and drive their own economic priorities.
Through a generous grant from the Catalytic Capital Consortium, we conducted research to better understand the needs of Native entrepreneurs when seeding their own, self-determined enterprise visions and to ask how, or if, catalytic capital could be of use. Catalytic capital is typically defined as financing that accepts risk or concessionary return to create positive impact in order to entice otherwise inaccessible third-party investment. Our research explored several examples of investment capital deployed by philanthropy that led to success for Native entrepreneurs. Ultimately, what we found was that catalytic capital provided an outsized benefit to Native entrepreneurs when the investor was creative with the financial toolbox, provided consistency in relationship and funding terms, and allowed the enterprise vision to drive decision-making.
In short, designing for self-determined economic visions requires a shift in power from investor to investee. Deploying catalytic capital techniques allows for multiple forms of power shifting and power sharing in ways beneficial to the Native entrepreneur. Our research showed that the most successful catalytic capital investments in Indian Country had additive elements to the traditional definition. We called this Catalytic Capital + and each success story had these elements in common: 1) Grant capital coupled with investment capital as part of an integrated capital stack; 2) Clear commitments to long-term consistent capital delivery; 3) Technical assistance; and 4) Right relationship between investor and Native investee, including connections to capital providers鈥� social and professional networks.
Perhaps most striking about the examples that we studied was that each of the entrepreneurs had expansive visions that, when implemented, would catalyze systemic change. Catalytic capital seeded not just entrepreneurial success, but scaled solutions for Indigenous Peoples directly from their communities and lived experiences in multiple sectors and timelines. Creative capital can be the linchpin to ignite these big visions. However, if done in the traditional manner, capital can constrict or diminish the breadth and scope of the visions, reducing the self-determined vision to one that is capital-determined.
Creativity on the side of the investor is the best way to support Native investees. With integrated capital in mind, there are multiple ways to step in: tools like program-related investments (PRIs), mission-related investments (MRIs), and loan guarantees; flexible investment timelines; and a combination of grant and investment capital in an integrated capital stack. Aligning these investments with grant capital allows for consistency for the Native entrepreneur so that they can deepen their work in their business rather than focus only on granting cycles. This consistency gives reassurance and, importantly, the much-needed runway for Native entrepreneurs to gain early traction on their solutions, creating the flywheel to success in later investments.
Recently, The Christensen Fund announced a . Tocabe鈥檚 founders, Ben Jacobs and Matt Chandra, created Tocabe thirteen years ago as a fast casual restaurant to bring Native cuisine to customers in Denver, and they have now launched an online platform for national distribution. Their plan to scale comes from a desire to see more Native cuisine delivered to Native communities throughout the United States, and also to see more people eat traditional Native foods. Their success at the restaurant relies on bringing in ingredients from Native food producers and the Marketplace will continue to build and support the ecosystem of Native growers and harvesters as a hub for distribution for these ingredients. The vision is bold and big; and one that they have built over a decade of working with Native producers seeing the challenges and benefits of sourcing food in this way. The PRI has allowed them to scale and build, to test and innovate, and to consistently and increasingly allow easy access to delicious Indigenous meals in ways otherwise unavailable.
There are multiple ways that philanthropy can support good investment. A philanthropic investor can be the lead to 鈥渃rowd-in鈥� other investors or to share due diligence, activities that fundamentally shift power by allowing the Native investee to spend less time educating investors and more time with their enterprise. The same can be said about foundations sharing information between the grant and investment sides of their operations, creating a communication pathway that allows for quicker decisions and a more comprehensive information set.
Self-determination is at its apex when Native entrepreneurs are successful by their own metrics. The role for philanthropy is to support that vision by creating consistency in capital flow that uplifts the whole vision over time, from grants through to investment. Creativity in designing capital flow is boundless and a strong means by which to shift power to Native entrepreneurs and, therein, to support self-determination in its breathtaking immensity and capacity to bring Native solutions to market.
Kate R. Finn is Executive Director of听First Peoples Worldwide. She has authored or co-authored Indigenizing Catalytic Capital, Harnessing Private Equity for Indigenous Peoples, , and Social Cost and Material Loss: The Dakota Access Pipeline. Ms. Finn is an enrolled citizen of the Osage Nation.
Images (top to bottom): Cover of听the ; cover of First Peoples Worldwide's听Indigenizing Catalytic Captial听report; and co-founder Ben Jacobs, image courtesy of Tocabe.