My Turn: Native corps. more important than ever

  • By GERAD GODFREY
  • Wednesday, December 16, 2015 1:03am
  • Opinion

As Alaskans, there are many benefits this great land provides us through its beauty, open spaces and natural resources. Another unique feature our state can claim is the economic and social might of Alaska Native Corporations for which there is no parallel outside Alaska.

In 1971, the Alaska Native Claims Settlement Act (ANSCA) created Alaska Native corporations as an alternate model to the reservation system of the Lower 48 states. This congressional act conveyed nearly $1 billion and 44 million acres of land to 12 Regional Corporations and over 200 village corporations. Between the 12 regional Alaska Native corporations, there are approximately 120,000 shareholders who hold roughly 12 percent of the total land in Alaska.

The concept driving ANCSA was that Native corporations would utilize the money and land resources conveyed to them to engage in the capitalistic marketplace in order to provide profits to care for the social, cultural and economic benefit of their shareholders in perpetuity. ANCs have done this by participating in a wide array of business sectors varying from construction, real estate, tourism, securities, IT, alternative energy, oil/gas, education, financial lending services, government contracting, resource development and virtually every other business sector. Today the remarkable level of success by ANCs has resulted in 20 ANCs making Alaska Business Monthly’s 2015 Top 49ers List, which rates the 49 most successful Alaskan-owned business based on revenue. This includes all 12 regional corporations and eight village corporations.

Not only do ANCs compete in virtually every major industry, they do so with exceptional results. While a typical organic company competing in a given industry tends to remain within that industry, or closely related industries, in contrast a single ANC will commonly compete in numerous unrelated industries through its subsidiaries. In fact, ANCs often compete with various titans of industry across numerous unrelated business sectors. As a business model, this is generally unconventional, but when it comes to ANCs it has been widely successful.

In addition to acting as powerful drivers in our state’s economy, ANCs provide direct benefits to their shareholders in the form of employment, scholarships, dividends, internships, apprenticeships and numerous other categories of benefits. Not only do ANC jobholders benefit, so do other Alaska businesses by providing income for Alaskans employed by ANCs to pay for goods and services throughout the state. Because ANCs are headquartered in Alaska, they provide many administrative and support positions here for business operations outside Alaska. If ANCs were not headquartered here, the vacuum they would leave would go largely unfilled. Jobs provided outside of Alaska allow ANCs to bring the profits from those services performed back into Alaska, which is a contrast to most corporations employing large work forces in Alaska as those corporations are rarely headquartered here and thus their profits leave Alaska.

The post-secondary education system in Alaska has seen the rare value and benefit ANCs provide to the state. Recently Alaska Pacific University developed a graduate level certificate program called the Alaska Native Executive Leadership Program (ANELP) and the University Alaska Anchorage developed an Alaska Native Studies Minor. In October, UAA held its first Annual Alaska Native Business Summit to a full house and the interest indicated there is a hunger to learn more about the unique business model of ANCs and the opportunities they present for Alaskans.

It’s hard to imagine our state without the existence of Alaska Native Corporations as there would be numerous empty buildings and collective city blocks without anything occupying them. Companies headquartered outside Alaska would not migrate here to fill the void left that currently is occupied by ANCs as their presence in Alaska is directly tied to ANCSA. Fortunately the public, business and educational sectors recognize the value ANCs provide to Alaska, yet ANCs can provide even greater value than they currently do.

ANCs pay millions of dollars in state taxes and their aggregated revenue represents the equivalent of 25 percent of the Alaska’s gross domestic product. Despite the collective success of ANCs and the immense benefit they provide to Alaska, they have yet to be maximally utilized as an economic and social resource in the state.

Non-ANC entities may do well to look to ANCs as investors and partners in both financial and business ventures. State, borough and municipal governments may benefit from engaging ANCs to a greater degree in creative initiatives and ventures seeking mutually beneficial outcomes.

The state’s education system should continue to develop programs that focus on educating and training students specifically to work for ANCs or do business with them while providing a greater understanding of what makes them unique in the business world and the exclusive benefits they can provide the state. With the current fiscal situation the state faces, the ongoing success and growth of ANCs is more important than ever as they are a uniquely Alaskan resource and are a critical component of ensuring a sustainable future for our state.

• Gerad Godfrey is Gov. Bill Walker’s senior advisor on rural business and intergovernmental affairs.

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