Written by Katie Gannon, Spruce Root
Amid the coastal mountains, immense glaciers, and lush rainforests of Alaska’s Icy Strait sits the Tlingit village of Hoonah nestled on the coast of Chichagof Island. Hoonah is Alaska’s largest Tlingit community, and for generations, the people of Hoonah have lived with a strong sense of place. “My family’s been in the Icy Straits area for thousands of years, harvesting salmon since the Ice Age,” says Dennis Gray, a commercial fisherman, and Hoonah’s city administrator. “I’m a third generation commercial fisherman, and I want to continue that tradition,” he says. But it is getting harder for people like Gray to carry on those traditions and support themselves economically in rural Southeast Alaskan Villages. Spruce Root’s loan program, with the support of SSP, helps grow small businesses to build resilient economies throughout Southeast Alaska.
The rising cost of permits and stringent quota to enter the fishing industry make it increasingly difficult to carry on commercial fishing traditions in southeast Alaska. Additionally, many small and isolated communities still lack the infrastructure necessary to support more than seasonal employment and with such small populations, it is difficult to attract business to rural communities. As a result, rural communities see unemployment rates as high as 26.2% according to the Alaska Department of Labor and Workforce Development. Even when jobs are available, wages can’t keep up with the high cost of living. In 2009, the average annual income was as low as $19,463 in Hoonah-Angoon and other rural Southeast Alaskan communities. Faced with these stark economic conditions more and more people are forced to leave the villages and moveto urban centers like Juneau in search of work.
Continued outmigration threatens the health and stability of rural communities, and these villages are vital cultural and community hubs. The task of building resilient and robust local economies is therefore critical for more than simply monetary reasons. Our region’s cultural, environmental, and economic resiliency are woven together with the successes of small businesses and pioneering entrepreneurs – they are the roots of our local economies.
Unfortunately, starting and running a small business in rural communities around Southeast Alaska is no easy task. In addition to the challenges inherent for all new business, there is a myriad of place-specific challenges. Intrepid entrepreneurs in Southeast Alaska are confronted with high shipping costs, seasonal markets, and geographic isolation. In the face of these challenges, SSP partners around the region, are working diligently toward economic resilience for rural Alaskans. Local tribes, city governments, and non-profit organizations in the SSP provide networking opportunities, business training, and technical support to local businesses.
Like many other partners, Spruce Root’s mission is focused on overcoming obstacles to economic prosperity in rural areas. Spruce Root is a local Community Development Finacial Institution (CDFI) that began as part of Haa’aani within the Sealaska Corporation, a regional native corporation, dedicated to developing economic sustainability across Southeast Alaska. The catalyst structure of SSP provides Spruce Root with direct connections in rural communities to build relationships and create trust. Working with SSP also allows Spruce Root to have a holistic understanding of the challenges and opportunities facing rural economies in Alaska in which Spruce Root situates its loan program. From their offices in Juneau and Sitka, the Spruce Root team provides burgeoning businesses with important tools: business coaching and financial services.
Entrepreneurs need knowledge and funds in order to sustain and grow their business. However, traditional banks have strict requirements for business loans, often requiring that businesses have been up and running for at least three years. For many new businesses, this can mean getting caught in a chicken and the egg scenario: they need funding to become established, but they can’t get funding because they aren’t established. Spruce Root’s loan program is meant to support new businesses through this formative process and grow into stable thriving businesses. Through personalized business coaching, Spruce Root helps entrepreneurs create a business plan, organize their financials, and secure funding. As a local native led nonprofit and SSP partner, Spruce Root has strong ties to rural communities and deep knowledge of the regional economy, which allows them to help new businesses navigate the dynamic challenges of doing business in Southeast Alaska.
For example, in Gray’s first year as captain aboard his own freezer troller, the F/V Pacific Hunter, Alaska’s commercial fishing industry was rocked by the worst coho salmon year on record. Even with a lifetime of experience on the water, as a new boat owner, Gray did not qualify for a traditional bank loan. Rather than being forced to abandon his livelihood, Gray turned to Spruce Root to keep his business afloat. “Spruce Root gave me a loan to allow me to operate into year two and three and, ultimately, build a more successful operation,” Gray says.
Being an SSP partner has allowed Spruce Root to build relationships with community catalysts around the region and connect with local entrepreneurs like Gray. SSP communications platforms also help Spruce Root share opportunities and information about their programs. Spruce Root also frames their works with SSP partners in the environmental community to frame the meaning of ‘sustainability’ in Southeast Alaska and how that relates to economic development.
Additionally, Spruce Root serves as the host organization for three regional SSP catalysts and the director of SSP. By building these connections and strengthening collaboration, Spruce Root assists Southeast Alaska’s people, businesses, and communities in reaching their full potential and long-term economic, social, and environmental resilience.
Today with support from Spruce Root, Gray continues to fish the waters of the Icy Strait, just as his family has done for generations. He even brings his sons along with him, teaching them to carry the tradition into the future. A future of an economically thriving region rooted in healthy communities, cultures, and environment.