Tribal Business Leaders Create New Path to Minority Enterprise Certification

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A new national nonprofit based in Grand Rapids aims to empower companies owned by Native Americans and tribal entities with a minority enterprise certification tailored to the nuances of that growing business community.

The National Native American Supplier Council launched Sept. 20 at the Great Lakes Tribal Economic Summit hosted by Tribal Business News at the Four Winds Casino Resort and Hotel in New Buffalo.  

By launching its own standalone minority business certification process, the NNASC aims to help companies circumvent existing certifying bodies that have effectively stymied the efforts of many tribally owned companies to access the powerful tool to help grow their operations.  

“Tribes, the word ‘tribes’ and the way tribes are commonly referred to almost speak of the tribes as homogeneous — all are the same and structured the same — and it’s absolutely false,” said Julio Martinez, chairman of NNASC’s board of directors and CEO of Dowagiac-based Mno-Bmadsen, the non-gaming investment arm of the Pokagon Band of Potawatomi.

“It really takes somebody who knows the tribal space to be able to properly vet the organization … and be able to properly certify, be able to go through the channels and understand the documents that would support it,” he said.

To date, Michigan tribally owned companies have faced what one former enterprise leader described as “circular exclusion” from the Michigan Minority Supplier Development Council, the body that vets “Minority Business Enterprise,” or MBE certifications.  

Although Native Americans qualify as minorities under the MBE program, tribally-owned investment entities face challenges when they try to certify businesses in their portfolios. That’s because tribal economic development groups often are set up as holding companies that leave existing management in place to operate and grow the companies, taking a page from the private equity and family office playbook.

The existing MBE certification requires that minorities own, operate and control the companies in question.  

While the Detroit-based Michigan Minority Supplier Development Council has denied MBEs based on them failing that three-part test, other regional offices in states across the country have certified similar tribally owned entities as MBEs.  

Moreover, tribally owned businesses often receive the Small Business Administration’s 8(a) disadvantaged business certification, which requires similar proof of minority ownership.    

First of its kind

The NNASC is what Martinez describes as a first-of-its-kind organization that aims to fill the gap in understanding and provide qualified companies with MBE certifications that they can use to expand their business reach while boosting economic equity among tribal communities.

One particular benefit for the entities that NNASC certifies will be access to business with publicly traded companies and other Fortune 500 corporations that have minority supplier spending goals.

To that end, a 2021 study from Miami-based strategic consultancy The Hackett Group Inc. found that companies globally are expected to increase their diversity spending goals by more than 50% by 2025, when they are expected to steer 13% of their total spending to companies owned by underrepresented diversity groups.

“For the businesses that are interested in supplier diversity efforts, the reality is the Native Americans haven’t been able to participate in a full level up until now, and so really being accepting of the certification, (it’s) saying, ‘We’re willing to give Natives a seat at the table,’” said Jason Palmer, executive director of the NNASC and citizen of the Match-E-Be-Nash-She-Wish Band of Pottawatomi Indians, or Gun Lake Tribe.

“When you’re talking about a tribe, you’re really talking about a community. Each of those communities is defined uniquely, and it’s defined by the tribes themselves. Having a third party coming in and trying to define tribal membership is really insulting, quite frankly,” Palmer said. “Who better to certify Native-owned companies than Natives themselves?”

Palmer said building awareness of the new certification process remains a key priority for the new organization. That initial outreach has led to eye-opening conversations with corporations, which “have been pretty open with their willingness to accept a certification” from the NNASC, he added.  

At this point, a handful of Native-owned companies have started the certification process, so the NNASC hasn’t seen that acceptance in practice just yet, according to Palmer.  

Growth plans

The NNASC is based in downtown Grand Rapids at McKay Tower, which is owned by a partnership of two tribally owned economic development firms, Gun Lake Investments and Waséyabek Development Co. LLC.

Plans for the NNASC have been in the works for several years, and Martinez said progress accelerated in the past year after previous interruptions stemming from the COVID-19 pandemic.

“(We’ve been) moving this project forward, I’d say, for the last year and very seriously in the last 10 months to organize it and start registering the nonprofit and starting to get resolutions of support from each tribe,” Martinez said.

Looking ahead, NNASC’s intent is to expand beyond the Midwest to both of the coasts over the next two years.

Martinez said the future effect of the NNASC is especially important as tribes and tribal economic development corporations have been working to diversify their portfolios and revenue streams.  

“The forward-looking tribes are creating these businesses in order to be able to continue to provide services to their citizens into the future,” Martinez said. “We need to build it today for the future and the future generations as a tribe because reliance on a single revenue stream has been shown throughout business history to be a fool’s errand because eventually, that revenue stream can be compromised or eliminated, so this can have a very significant impact.”