How tribal economic development corporations grow tribal businesses beyond gaming
By Thomas Zitt and Christopher Irwin
As tribes across the country work to leverage gaming resources into economic diversification projects , the importance of the economic development corporation cannot be overemphasized .
Although there are a variety of creative approaches to structuring economic development , there are common themes behind some of the most successful : persevering through early struggles and setbacks before finding the right balance between tribal oversight and corporate independence , and the right development strategy , one that takes advantage of inherent advantages or opportunities .
Native American economic development entities are typically governed by a board of directors appointed by the tribal council . Councils approve of overall strategic plans and levels of capitalization and dividend policies . However , day-to-day operations , including personnel matters and investment decisions , are most effective when left to the corporate board and staff . Quarterly reports keep the council informed .
Board member requirements are varied . In some cases , all board members must be tribal council members , while in others tribal council members and officials are not permitted to serve on the board . Frequently , tribes require a mixture of council persons , other tribal members and outside business or economic development professionals .
The two most popular corporate structures are tribally chartered corporations under Section 16 , and federally chartered corporations under Section 17 . The Section 17 structure has been recommended , due to the perception that it creates a more solid legal base , although that perception appears to be fading , as tribally chartered corporations have been very successful in attracting financing and accessing grants and government contracts . The disadvantage of incorporating as a Section 17 is that it can be a lengthy process to get approval from the Department of the Interior , and it is typically more expensive to establish with respect to legal fees .
If properly structured and strategically developed , Native American economic development entities can successfully overcome challenges — even tribes in remote locations with limited resources and local markets .
Trailblazers
Mandaree Enterprise Corp .
The Mandaree Enterprise Corp . ( MEC ) is a tribally owned company , established in 1990 and funded in 1992 with $ 32,000 from the Mandan , Hidatsa and Arikira Nations ( MHA ) of North Dakota .
4 Bears Casino & Lodge in North Dakota
From 1992 until its “ graduation ” in 2001 , MEC was in the Department of Defense Mentor / Protégé program with Northrop Grumman Corp . Through this program , MEC received technical and engineering assistance and business / personnel management development .
Throughout the next several years , MEC put various multimillion-dollar contracts in place . MEC ’ s primary business initially was fabricating cables , wire harnesses and printed circuit boards for front-line military weapon systems . In 1998 , Mandaree Enterprise diversified into Information Technology Services ; clients include the Social Security Administration , Environmental Protection Agency , Department of Agriculture and Data Dimensions Corp .
MEC has also taken what it learned from the mentor-protégé relationship with Northrop Grumman and applied it in its very own , native-focused mentor-protégé program .
The two most popular corporate structures are tribally chartered corporations under Section 16 , and federally chartered corporations under Section 17 . The Section 17 structure has been recommended , due to the perception that it creates a more solid legal base , although that perception appears to be fading , as tribally chartered corporations have been very successful in attracting financing and accessing grants and government contracts .
12 TRIBAL GOVERNMENT GAMING 2020