Native Learning Center webinar by Upspring, New Trends in Capital May, 2016

www.NativeLearningCenter.com
New Trends in Capital
to Fund Housing &
Innovative Social Services
Drew Tulchin
UpSpring
May 11, 2016

Webinar Logistics

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Training Objectives
1. Define new terms like supportive housing, social impact
bond, pay for success, and pay for performance
2. Identify creative strategies to develop new financial
streams in this new trend
3. Learn why these might be interesting to Native tribal
governments, NGOs, and housing authorities
4. Learn case studies for specific, detailed information that
addresses affordable housing for housing authorities,
accesses new capital and serves more low income people
delivered by a national leading entity in this field
Have fun! Please ask questions at any time

Introduction

Poll Question #1:
Where are you from?
What organization(s) do you represent?

• Offers a network of seasoned consultants for
impact investment and development helping
businesses, organizations, foundations and
governments 'Do well by doing good."
• Certified HubZone Small Business
• ‘B Corporation’ in 2010, the first in New Mexico
• Honors:
2015, ‘14 & ‘11 “One of the Best for the World”
One of 119 companies from 20 countries
2012 Honoree NM Sustainable Business of the Year
•
UpSpring Associates Consulting Firm
Formerly Social Enterprise Associates

Drew Tulchin, MBA, Managing Partner
Drew Tulchin is Managing Consultant at UpSpring
Associates. He has 16 years experience building start-ups
and growing organizations. Specializing in the 'triple bottom
line,' his focus is market driven business success that
generates social, community, and environmental value.
He has consulting experience with multiple Native American
Tribes and in 40+ countries from A (Afghanistan) to
Z (Zambia).
Recent capital raises: Ohkay Owingeh Housing Authority in
NM, US MFI from the U.S. Dept. of Treasury, Koolkids in
Vietnam, Solar and Energy Loan Fund (SELF) in Florida, and
Sea2Table in NY.
Efforts for Alan Webber for Governor of NM raised $1 million
in 5 months.

Consulting Examples, Native Clients
Northern Pueblos
Housing Authority
Ohkay Owingeh
Housing Authority
White Mountain Apache
Tribe, Fort Apache Heritage
Foundation, Arizona
Shoshone-Bannock
Tribes, Fort Hall
Reservation, Idaho

Poll Question #2:
What is one question you have?
Or, what is one thing you want to learn here today?

New Trends: Changes in the Marketplace
Technology and Information

Democratization of Capital

Interest in Local Economy

The Changing Role of Government

Greater Sovereignty and Economic Vitality

Native-American Examples
April, 2016 - PBPN contributes $70,000 to NE Kansas
Organizations and Events, through 18 grants.
Each quarter, the Prairie Band Potawatomi Nation
distributes funding to organizations and events
promoting community stewardship and long term
sustainability of resources for Kansans.
PBPN Link

In 2000, the Oneida Tribe of Wisconsin became
sole owner of Bay Bank. $65 million in assets.
Bank operations and policies remained the
same, and now provide more federally funded
programs to directly assist tribal members.
Bay Bank and Oneida Tribe of Wisconsin
developed unique mortgage, entrepreneurial
programs to assist Oneidas.
Bay Bank Link

“Ho-Chunk, Inc. is… an investment firm that makes
aggressive investment decisions that they think will
benefit the Winnebago people, and they have found a
great deal of success in this work.”
Currently employ 1,400+ people. Goal to employ as many
Winnebago natives as possible.
From Native Youth Magazine, April 2016
link: http://nativeyouthmagazine.com/business.html

New Market Items and Tools

Philanthropic
Giving
Sorting them out:

Philanthropy
Giving
Defined
Sorting them out:
Providing donations and other value.

Philanthropy
Giving
Sorting them out:
Case Study

Case Study: Notah Begay III Foundation
Notah Begay III Foundation Awards $387,438 in “Seeds of Native Health” Grants
SANTA ANA PUEBLO, NM: NB3 announces 2016 Capacity Building and Promising Program Grantees.
Thanks to the generous support of the Shakopee Mdewakanton Sioux Community and its “Seeds of
Native Health” nutrition philanthropy campaign, NB3 awarded 11 grants to Native American tribes and
native-led organizations improving nutrition & access to healthy foods for children and communities.
Combined with grants awarded in 2015, this partnership has funded 25 projects in Indian Country to
improve Native nutrition. Link
NEWS

Case Study: MoGro
Since 2011, MoGro has partnered with Pueblo leadership and community members to provide healthy
food in rural areas. MoGro’s work has focused on combating nutrition and behavior related diseases in
Pueblo communities, where health disparities are disproportionately high.
Partnering with the Johns Hopkins Center for American Indian Health (JHCAIH), Notah Begay III
Foundation, La Montañita Co-op, and funding from Kellogg Foundation, Newman’s Own Foundation,
and US Dept of Ag, MoGro now reaches five Pueblos: Santo Domingo, San Felipe, Laguna, Cochiti
and Jemez.
Link
NEWS

Angel Tax
Credit
Tax
Credits
New Mexico State Tax Credit
Sorting them out:
New Market
Tax Credits

Tax
Credits
Defined
Sorting them out:
An amount of money that can be offset against a tax
liability. Unlike deductions and exemptions, which
reduce the amount of your income that is taxable, tax
credits reduce the actual amount of tax owed.

Angel Tax
Credit
Tax
Credits
New Mexico State Tax Credit
Sorting them out:
NMTC
Case Study

Ohkay Owingeh Housing Authority

Families were moving out of the Central Plaza of the pueblo to new HUD houses on edge
of community. Started rehab program Owe’neh Bupingeh to bring families back to there.
Combines housing with cultural preservation, fostering sovereign independence.
Created Cha Piyeh, Inc., a Native CDFI that provides financial literacy and affordable
capital. Now has independent board; separate legal entity from tribal government
Ohkay Owingeh Housing Authority
Founded 1997
Founder Designated by Tribal Council
Headquarters Ohkay Owingeh, NM Industry Housing
Business Home development and rehabilitation
Web site www.oohahousing.org
STORY

Equity Investment
Sorting them out:

Equity Investment
DEFINED
Sorting them out:
Buying and holding ownership in a private entity, including
having shares of stock in anticipation of income from
dividends and capital gains, as the value of the stock rises.

Equity Investment
Sorting them out:
Case Study

Native American Bank
In 2001, twenty Tribal Nations and Alaskan Native Corporations set out “to create a national
bank to serve all Native people, communities, governments and enterprises across the
country”. Established Native American Bank, N.A.
NAB recognizes that, among many issues facing Native Americans, lack of access to
financial capital and services is a significant impediment towards realization of self-
sufficiency and financial freedom across Indian Country. www.nabna.com
STORY

Performance Based
Contract
Social
Impact
Bonds
Pay for Success
Sorting them out:

Social Impact
Bonds Defined:
Sorting them out:
A social impact bond (SIB) is a contract with the public
sector or governing authority, whereby it pays for better
social outcomes in certain areas and passes on part of
the savings achieved to investors.

Social
Impact
Bonds
Sorting them out:
Case Study

Santa Clara County Homelessness
Santa Clara County launched Project Welcome Home, the first Pay for Success project in
California. In partnership with a social service agency, the program is to serve 150-200
chronically homeless people who are frequent users of County emergency rooms, acute
mental health facilities, and jail. 8 funders provide $7 million in upfront funding.
Fact Sheet Link:
STORY

Sorting them out:
Performance Based Contract

Sorting them out:
Defined
A results-oriented contracting method focusing on outputs,
quality, or outcomes that tie at least a portion of a
contractor's payment, contract extensions, or contract
renewals to the achievement of specific, measurable
performance standards and requirements.

Sorting them out:
Case Study

First Nations Oweesta Corporation
Native CDFI provides training, technical assistance, and investment to Tribal lenders and
organizations. Oweesta has long history supporting Native financial education and asset
building. It received the Native American Finance Officers Association (NAFOA) 2015
Education Program of the Year award for Building Native Communities. Oweesta has
managed 10s of millions of investor dollars with excellent repayment. It has served as a
mezzanine financial intermediary, on-lending to smaller Native CDFIs. Link:
STORY

Performance Based Contracting
Instead of paying for a product before it is provided, performance based contracting
reimburses for work completed that can be verified through quantified, measurable means
against original goals. The project risk, costs and performance is carried by the
implementer. If they are inefficient, or late, they have to eat that cost. A road is an easy to
verify example, but it is also possible through social services – education, youth services,
and more.
STORY
Photo: Worldhighways.com

Case Study – Guest speaker

New Market Trends:
Capital to Fund Housing
and Innovative Social Services
Russell Kaney
Director, Programs
National Rural & Native American Initiative
rkaney@enterprisecommunity.com
608-225-1556
www.enterprisecommunity.org

• Created in 1982 34 Years Ago
• James & Patricia Rouse – Founders
• Provider of debt, equity, technical services for LIHTC
• Nationwide Platform
• Emphasis with Not For Profits & CDC’s, tribal orgs
• 500+ Employees
• Rural & Native American Initiative

National Low Income Housing Coalition
New $$ for housing, targets 30% AMI & <
$$ coming from profits of GSE’s (Fannie & Freddie)
Most $$ going to rental housing
2016 is 1st year of allocations
Good leverage tool, esp. for special needs housing
i.e. homeless, vets housing, etc.
More info www.nlihc.org
Housing Trust Fund

Reporting/
Oversight
Clear Goal
2
6
Recommendations for Success
Understood Value
3
Easily
Communicated
4
People
5
Clear Mission
1

Clear Mission
1
What’s the primary purpose
and reason for being?

Clear Goal
2
Where are you going?
What is the guiding star?
How will you know if you get there?

Understand Value
3
Concise Answers to:
1. “Why should I buy your ‘product’ or service?”
2. “Why your product and not competitor’s?”
3. What is your ‘special sauce’ or competitive advantage?
Embrace the Capital system. Use it as a tool for good, to your advantage
Consider complete Capital Valuation to understand Total Net Worth

Easily
Communicated
4
Communicate to Outside:
1. Clear & Concise Communications
2. Timeline
3. Measured Outcomes
4. Business and/or Strategic Plan
5. Website can be found / easy to read

People
5 Who is the entrepreneur?
Who is the leader?
Who manages the day to day?
Who is the team?
Stability / Consistency: how long
have they been there?
Support: lawyer, CPA, Board,
Advisors, Elders, others
Photo: UC Riverside

Reporting / Oversight
6
Quantifiable, measureable
goals and objectives.
Some (but not too much) to
Tribal Government, Council,
and Tribal Members. Public,
Tribal, Local, National Mentors
& Coaches, Networks.

Capital Sources & Types
Type of Capital Source Debt Equity
Grant/other
support
Traditional
Commercial
banks
Traditional
Investors
Alternative
Philanthropy
Tax Credits
Equity
Investment
Social Impact
Bonds
Performance
Based Contract




 


• UpSpring Working Paper #16 Capital Sources for Social
Enterprises
• UpSpring Tip Sheet #9 “Resources for Scaling Social
Enterprises”
• GreenMoney Journal “Impact Investing in Native
American Communities”
• CNCS US Social Innovation Fund : www.whitehouse.gov
• Enterprise Community Partners: Social Impact Bonds &
Pay for Success
Resources

Drew Tulchin
UpSpring
www.upspringassociates.com
drew@upspringassociates.com
Questions?
Answers?
Thank you!

Native Learning Center webinar by Upspring, New Trends in Capital May, 2016

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