Empowering Native-led Businesses through Change Labs’ Lending Program
As National American Indian Heritage Month comes to a close, the Nasdaq Foundation is wrapping up the month by highlighting quarterly grant recipient Change Labs, a native-led and native-controlled 501(c)(3) nonprofit organization. Through the foundation’s Quarterly Grant Program, which aspires to diversify entrepreneurship by empowering organizations that share our mission and values, the leaders at Change Labs are making that possible with programs like the Kinship Lending Program, supporting native-owned small businesses on the Navajo and Hopi reservations.
Spearheading the Kinship Lending Program is Director Kristine Laughter, a champion for small businesses and entrepreneurs throughout the Native American community. We spoke with Laughter to discuss the program and the transformational work Change Labs is bringing to these reservations.
Tell us a little bit about Change Labs and its core mission?
Change Labs’ core mission is to provide resources to native entrepreneurs in our native communities. There are challenges when it comes to dealing with our local government. Our government was created by non-Navajos – outsiders who came in. In my opinion, this put roadblocks in place and makes things difficult for native businesses to get going and keep growing. So, we are here to help those businesses by providing technical assistance to native entrepreneurs in the area. We’ve provided resources to Navajo, Hopi and Apache businesses, which are here in Arizona, the Laguna Pueblo in New Mexico, as well as native-owned businesses across the Southwest.
As we honor Native American Heritage month, how would you reflect on Change Labs’ journey and the impact it has had on Navajo and Hopi communities?
For 15 years, I was working within the banking sector where we taught financial literacy to our communities. It was put together by non-natives and didn’t really connect with our Native American communities. I would go to schools and nonprofits to share this information, but we were missing the native-centric aspect of financial literacy. I remember talking to people about saving money, and it was really hard for people to understand because in our culture and in our communities, we help each other. If there’s an emergency, somebody will take what money they have left in their wallet to help their neighbor.
And so, what we did with our financial literacy initiative within the Kinship Lending Program is put things together based on what our ancestors did to survive. They had their own banking system, even though it wasn’t dealing in cash. We would talk about the circle of life, and the currency of our farming. Our ancestors knew how to take care of themselves, and that’s one thing we talk about in our loan program. We want Native American members to understand that we are here because our ancestors took care of their livelihood. Those are so important to our native people, and we want to continue to use that within our loan program.
Change Labs emphasizes relationships to guide Native American entrepreneurs to achieve business success. Can you explain how the Kinship Lending Program builds and maintains relationships from business coaches to business owners to ensure a successful mentorship program?
We are a matriarchal society, and everything we do starts with our mother’s clan. My four clans consist of my maternal clan, paternal clan, my maternal grandfather’s clan, and my paternal grandfather’s clan. I may meet somebody who is my grandmother, grandfather, aunt or uncle. And it’s this clan system that really binds us together as people.
So when we talk about the relationship-based program, we talk about building relationships around what we call “eeh” – our relationship system within the Navajo Nation. We use that to help us build relationships with borrowers. We set up coaching sessions with borrowers to allow the members to talk about what is going on with their businesses and what kind of challenges they’re facing. We listen and connect them with other people that may help their businesses and if we can provide them with technical assistance, we will.
We’ve kept everything virtual since the pandemic to maintain relationships across the reservation. And when we do get the chance to see each other, it’s a celebration. We had our Navajo Nation Fair this past September, which brought about 100,000 tribal members to Window Rock. It was special because I got to meet with my members in person and see them running their businesses, and we greeted each other as family members. We want to continue to nurture those relationships with our alumni members so that once they graduate from our Incubator or Kinship Lending Program, they know that they are still a part of the family and will receive our support and our services.
How does Change Labs plan to use the funds from the Nasdaq Foundation Quarterly Grant Program?
We will be using those funds for the Kinship Loan Program to continue to lend money to our members of the Native American community. Our people have been having a difficult time getting approved for loans.
On tribal lands, we do not have the collateral that everybody else has. If I own a home in a community outside of the reservation, I can use that home as a collateral for a loan like anywhere else. But on the Navajo Nation, we don’t have that luxury because the property that our homes are built on is federal trust land, hence we cannot use our property as collateral for loans. That really makes it difficult for individuals to get access to capital.
The grant will help us lend money out to members based on their relationship with us. It’s so different from a traditional banking system where borrowers are afraid to call the bill collector and be honest with them. With this program, our members will call me personally and tell me what’s happening with their business and why they may be late on making a payment. We can offer them assistance, and these funds will make sure that we can continue to provide them with technical assistance and services.
How might Change Labs continue to grow and advance the Kinship Lending Program in the future? Are there any new elements that you are currently looking to incorporate for the next cohort?
We want to be able to continue this relationship-based lending program with the funds that we will be receiving. The financial literacy program will stay in place, and we plan to add a few new elements. We plan to add a bookkeeping system session so that our members can really understand why bookkeeping is so important to running their businesses. A lot of people run their business out of their own home account – we want to help them open a second account so that their books are specific to their business. This session will be covered in the next round of lending that we do.
We also really want to make sure that people understand how they can be successful and scale their businesses. We’ll have partners in place that can work with these businesses and decipher the different ways that they can grow.
To what extent have you seen your program participants achieve success? Can you share a specific example of a particular business or entrepreneur that stood out to you along the way?
One member from our Kinship Lending Program, and two members from our Incubator Program have joined forces after they graduated. One was a farmer, one was a chef and one ran a small market. When all three graduated from their programs, they decided to work together within their community to sell food and fresh produce at the local market.
There was no local market for 30 to 35 miles, and community members would come to do their shopping and get their fuel here. They decided collectively that this is what they wanted their economy to look like. Community members loved it, particularly the way that they could go pick up lunch, go to the market and take care of their shopping all in one go, all while supporting their local business owners. It was awesome to see them work together like that.
Can you tell us about the creation of your Tuba City workspace and how it has contributed to Change Labs’ mission?
When I first went to Tuba City back in 2019, I got to see the plans for the workspace. Our vision was to create a place where the community and small business owners could come together to network and learn. When we talk about our mission to ensure that native entrepreneurs have the tools and resources that they need to be successful, this space embodies what we mean. We are going to have a coffee shop in there that is owned by a local entrepreneur in the community, case and point.
We have already heard from people around the country just how excited they are to visit us in Tuba City. We are hoping to get a lot of people to come and see what we are doing because this is the first of its kind in Tuba City within the western Navajo region, so we are really excited about it!
At the close of the interview, Laughter shared a bit about the future of Change Labs, highlighting its Incubator Program, led by Cecilia Tso. Tso is already revising the program to help more native entrepreneurs on a faster timeline. Since the changes, the Incubator program already has two full cohorts going into 2023.
Going forward, Laughter hopes Change Labs will continue its work preserving healthy relationships with borrowers by driving technical assistance, offering business insights, and expanding loan opportunities – all under Navajo and Hopi values.
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