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Indigenous Community Provides Blueprint for Financing Opioid Recovery

With the help of Native American Bank, a North Dakota tribe is building a culturally relevant treatment facility — and piloting a funding model other tribes could follow. 

By James Finley

As the opioid crisis continues to escalate, rural populations and historically disenfranchised populations have suffered particularly high mortality rates. Concerningly, those two demographics coincide in many American Indian communities, where a combination of geographic isolation and economic barriers can both exacerbate the problem and make receiving adequate treatment for addiction uniquely difficult. 

But a recent partnership between Native American Bank and a North Dakota Tribe presents an innovative and promising solution to that concerning trend. The Bank is a CDFI owned and operated by Native Americans, which focuses on supporting Indigenous communities. 

“Its mission is to provide access to commercial capital that promotes community and economic development on reservations,” says Shannon Ward, chief lending officer at Native American Bank. Their experience in that pursuit made them the right partner for the Turtle Mountain Band of Chippewa as they sought to establish a treatment facility that could provide accessible and culturally relevant addiction treatment to their community. 

“Tribes, as you know, are not subject to state law — they’re their own individual governments,” Ward says. “And that can be very, very challenging for traditional lenders. When it comes to lending to tribes, you have to have familiarity with how to prepare loan documents that are unique to every particular borrower. And that's something that we're very, very versed in doing because it is a routine component of our business.”

When the Tribe approached Native American Bank, asking for help in funding the facility, Ward realized that the Tribe was well-prepared to blaze a path that could provide a model for other communities. Because they had already built a self-sustaining treatment facility that provided culturally relevant care to addiction patients. 

“The Tribe had already established a smaller behavioral health clinic. It was mostly providing outpatient services,” Ward says. “But they were not able to really, fully meet the needs of the community.”

The Tribe had conducted a survey in 2019, and they had found that there were as many as 750 members of their community that needed treatment. Their current clinic only had the capability to serve 157.   

“They were interested in expanding on what they had put in place with their original clinic,” Ward says. “They wanted to pursue a much larger, in-patient program that would incorporate their established culturally based treatment approach to delivering services.”

That emphasis on delivering culturally based care was crucial, according to Ward, who has heard from other tribes who are interested in taking this approach. 

“Tribes are interested in providing recovery resources to communities, and pursuing clinics that are located on the reservation, and particularly those that are culturally based, are deemed to be more effective,” Ward says. “If a person doesn’t have to go outside of their community in order to seek treatment, that’s a huge factor in how successful that person is going to be.”

In addition to serving any community members in need of treatment, the new facility will have a dance arena for traditional dancing, sweat lodges in the central campus, and outdoor classrooms for culturally relevant teaching. 

But to make that dream a reality, the Turtle Mountain Band of Chippewa Tribe faced substantial startup costs and needed the expertise of Native American Bank. Together, they got creative in putting together a plan that built on American Rescue Plan funds that the Tribe had obtained to get started on the facility.

As a CDFI bank, Native American Bank had experience in working with New Market Tax Credits,  which support commercial investment in disadvantaged communities that historically lack it. The treatment facility the Tribe was proposing had the potential to bring in new revenue into a disenfranchised, remote community, so it fit the bill. 

But what’s exciting about the treatment facility is that, in addition to potentially driving economic investment, it’s also run as a nonprofit — a combination that allows Native American Bank to provide additional support through the U.S. Department of Agriculture’s Community Facilities Guaranteed Loan Program. Altogether, about half of the startup costs have come from the tax credits and ARPA funds, and the other half through the loan. 

During the two-year construction of the clinic, no interest is due, and once the clinic opens, the loan will be covered by the clinic’s revenue, a substantial portion of which is projected to be covered by Medicaid. The Tribe and Native American Bank even project that, eventually, the project’s positive impact on the community’s opioid addiction rates will lower the number of people needing service, allowing them to expand as a full-service health clinic to patients outside the community.

According to Ward, the needs that the facility addresses are faced by many other American Indian communities, which also meet the qualifying factors necessary for this combination of financing. That makes this solution promising for other communities, which have already reached out to Ward. 

“In our pipeline right now we have three similar projects that are either health clinics or behavioral health centers that are projected to combine New Market Tax Credits and USDA guarantees,” Ward says. “We can see that the demand is there, that this is a specific interest for tribes in terms of providing services to their Tribal members. There isn’t necessarily a limitation on how wide this particular type of project can be.”

It also points to the importance of CDFIs that have a knowledge of the local or specific cultural communities that they work with. The financing for this project required specialized knowledge of how to work within specific Tribal laws that only a few banks possess. Currently, Native American Bank is not only looking to work on more of these projects themselves, but is open to partnering with other banks to make other treatment facilities a reality.

“We most certainly understand that there’s a huge learning curve associated with putting together a financing package that combines these two components, and a lot of banks either don’t have the experience or can’t invest the time to understand the components,” Ward says. “We don’t want to be the only bank doing these types of projects because the need is too large.”

This story is part of our series, CDFI Futures, which explores the community development finance industry through the lenses of equity, public policy and inclusive community development. The series is developed in partnership with Next City.