Job quality: Indian Country’s advantage

Travois has directly deployed $180 million in New Markets Tax Credit (NMTC) allocation and brought an additional $115 million from other Community Development Entities (CDEs) to Native communities for economic development projects. This gives us a unique perspective on what CDEs are looking for in projects as they are deciding how to direct their tax credit allocation. We know what our advisory board is looking for: the best fit between community needs and community impacts. It is difficult to know, however, what the broader CDE community seeks in its projects.

There are hundreds of CDEs with different missions and focus areas. If you want to know what Travois thinks about a potential project, ask us. If you want to know what other CDEs are looking for and you are looking for a message that appeals broadly, we can help with that too. So let’s talk about the best way to tailor a strategy that will resonate with every mission-driven CDE out there to put your project in the best position to receiving financing.

As anyone with NMTC experience knows, a potential NMTC project is playing to a number of audiences. A project needs to impress the investor, the leverage lender and potentially the CDFI Fund. Given that the NMTC program is several times oversubscribed, however, the stiffest competition is for the attention of CDEs. In today’s marketplace, what do CDEs find most attractive? The answer is job quality.

I recommend you focus on job quality for a couple of reasons. As America continues its economic recovery, job creation is the driving factor in most public policy decisions. Pressure is growing on employers to increase hiring given stubborn unemployment amid strong corporate earnings and profits. This leads you to an obvious conclusion: CDEs are looking for projects that create a lot of jobs.

True, but think about that for a moment. If you have already identified a great NMTC project — a hotel, a manufacturing plant, a community health center — then you have already made the basic choice that defines how many jobs you will create. Sure, there are always changes to be made to project scope that will add a few construction jobs here or perhaps a few permanent jobs there. But imagine you are pursing a renewable energy project. No matter what you do, a solar power array will necessarily create fewer jobs than a biomass project that requires more operational support, fuel delivery, etc. When it comes to job creation, once you have selected a project, you have already made your main job creation choice. So what can community leaders to do increase the impacts of their projects or highlight their attractiveness to CDEs? — focus on job quality.

CDEs define job quality in various ways:

  • Wage levels as compared to area living wage
  • Benefits packages that include health insurance and educational support
  • Accessibility or targeting to low income community (LIC) residents

Many Indian Country employers are already leading the field in high levels of pay and progressive benefits packages. But job accessibility and targeting is an area in which Indian Country has an automatic leg up.

First and foremost, it is important to many American Indian, Alaska Native and Native Hawaiian communities to hire locally as a matter of public policy. Travois’ experience has been that — all rules and regulations aside — Native projects hire Low Income Community (LIC) residents because they believe it is the right thing to do. Once you move beyond this corporate cultural standard, however, many Native communities — specifically tribes — have formal hiring preferences for qualified Native American applicants. Given the preponderance of LICs in our service area, this often means that a tribe basically has an LIC-resident hiring preference built-in to its projects. Because it is a common strategy in Indian Country, many tribes don’t naturally tout that as a community impact strategy to CDEs — but it is. Travois strongly recommends that tribes tell that story.

CDEs want to know that jobs are targeted to and accessible to LIC residents. This is an area in which tribes have a natural advantage. It is not enough to say that Indian Country projects are the best because of their high levels of economic distress. Projects also need to draw a clear line between that distress and how the project combats it. Immediate hiring of LIC residents represents just such a clear line.

Travois’ NMTC team is always available to help you strategize about putting your project’s best foot forward. Call, email or tweet at us any time. Or look for us on the conference circuit this year as we plan to attend NAFOA, RES, NAIHC and other important Indian Country gatherings.

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