Photo credit: First Nations Development Institute

At first glance, the prefabricated building on Highway 2 on the Fort Peck Reservation in Montana does not seem like anything special. It houses an oil change and lube business and has a big sign on it that advertises a $19.99 special for a 12 point inspection. But this building represents a noteworthy achievement: It is a reservation-based, American Indian-owned business, and the outcome of a 10-year investment in Indian entrepreneurship.

KC’s Oil and Lube is owned by Kim Johnson, a member of the Fort Peck Assiniboine and Sioux Tribes. It is one of only a few businesses to start up on the reservation in the last few years. Johnson received a scholarship from the Johnson Scholarship Foundation (no relation) to study business at Fort Peck Community College (FPCC, Poplar, MT).

KC’s Oil and Lube was one of the businesses studied by First Nations Development Institute for its research on the outcome of Johnson Scholarship Foundation investments. First Nations staff documented 118.5 full-time-equivalent jobs created by entrepreneurs who had received the scholarships.

KC’s Oil and Lube is typical. This business was created because Kim Johnson and her husband wanted to start a company that allowed them to spend more time with their son. Johnson spoke to a business teacher at the tribal college, received the scholarship, and took several years of classes before she opened her successful business.

Another example is Margaret Carry Moccasin on the Standing Rock Reservation in North Dakota, who signed up for classes to help her start her Native American jewelry business with the help of the foundation. She now produces beaded chokers and bracelets and carries on a family tradition of quill art using porcupine quills.

The Theodore R. and Vivian M. Johnson Scholarship Foundation was established in 1991 to assist deserving people to obtain education. After conversations with local educators and business leaders, the foundation decided to target entrepreneurship and business education.

The overwhelming issues in Indian Country are poverty and unemployment. Most reservations lack sustainable development, and the appropriate people to address this issue are the local residents. Because of longstanding poverty and unemployment, however, many reservation families have had little or no experience with business or finance. They need education in these matters.

The academic literature also suggests that entrepreneurship development is an effective poverty alleviation strategy for low-income populations. It raises incomes and reduces reliance on federal assistance. Developing new businesses also represents an important part of civil society development – the new private sector can serve as an alternative to the historical dominance of a public sector and command economy.

After 10 years of supporting business and entrepreneurship education, the Johnson Scholarship Foundation wanted to measure the results. The foundation retained First Nations Development Institute. First Nations was chosen for this work because of its expertise in the field of American Indian development and its experience in delivering and evaluating technical assistance and “development-related” grant programs in Indian Country.

First Nation’s research involved interviewing over 115 people (students, former students, instructors or program managers, and 29 key informants including tribal government representatives and directors of loan funds) on nine reservations. When asked how the Johnson Scholarship Foundation had helped them start their business, business owners emphasized the importance of doing a business plan and learning accounting and bookkeeping skills. Technology and marketing were also mentioned. Some business owners said they felt for the first time that someone believed in them.

The research results demonstrate the importance of access to capital and ongoing technical support. It found that more businesses are started and more jobs created on reservations that have Tribal Business Information Centers (or an equivalent) plus a loan fund plus business/entrepreneurship education at a tribal college.

On the Menominee Reservation in Wisconsin, for example, the Menominee Business Center offers help with business plans, a loan fund, and business incubator space for business start ups. The business center works closely with the tribal college to make sure students are aware of the support available to them.

First Nation’s study revealed that there is a great demand for tribal members with accounting skills to work in tribal government departments, and the Johnson Scholarship Foundation has been responding by providing funding for tribal members to get degrees in business and accounting.

An instructor at the College of Menominee Nation says, “It is important to know that Johnson Scholars are now policy makers in the local community. Ten years ago, we did not have this. Now we have tribal members who are skilled and educated making important policy decisions about business and economic development.”

To increase its impact, the Johnson Scholarship Foundation also directs its funds toward a master’s degree program, community development, financial institutions on reservations, and endowments. At the request of the foundation, Gonzaga University developed a tuition-free MBA program with an emphasis on American Indian Entrepreneurship, which allows students to continue to live and work on the reservation.

In 2005, the Johnson Scholarship Foundation entered into agreements with Oglala Lakota College in South Dakota and Salish Kootenai College in Montana to build endowments in support of entrepreneurship and business education (see TCJ, Vol. 18, No.2). It is likely that partnership with selected tribal colleges will be the centerpiece of the Johnson Scholarship Foundation’s strategy for the foreseeable future, and the foundation hopes to develop new tribal college partnerships in the coming years.

Whether it is helping a small business owner learn to balance the books in a restaurant, market a computer repair business, or do a business plan for an arts and crafts business, business education is equipping Native Americans with the skills to make their entrepreneurial dreams a reality. Foundations such as the Johnson Scholarship Foundation are also helping students with the financial support to follow their dreams, and local tribal economies are the better for it.

For more information about the foundation’s programs, visit the website at:  johnsonscholarships.org.  For further information about the MBA program, contact Stacey Chatman, Program Coordinator, Gonzaga School of Business at (509) 324-4622 or at chatman@jepson.gonzaga.edu.

Sarah Dewees is Director of the Native Assets Research Center at the First Nations Development Institute.  Malcolm Macleod has served on the Board of the Johnson Scholarship Foundation since 1993 and has been its president since 2001.