Fostering financial skills in rural Alaska

Debe Mahoney, Executive Director, NeighborWorks Alaska

Challenge: Alaska's native cultures span tens of thousands of years with a rich history of subsistence and affinity for community. However, the state's economy is changing, and both urban and rural areas are reassessing their models for economic and community sustainability.



For tens of thousands of years, Alaska's native cultures have relied on a subsistence lifestyle and an affinity for community. But state's economy is changing, and both urban and rural areas are reassessing their models for economic and community sustainability. Revenues from natural resource development, funding from the federal government, and investments from Alaska Native regional corporations have long supported the costs of building social and economic infrastructure in rural Alaska. The global decline of oil prices, retrenchment of the oil industry and decreasing availability of federal funds have created a perfect storm. Rural Alaskans, the majority of whom live subsistence lifestyles, are now trying to adapt. NeighborWorks Alaska has met this challenge by launching a program to help educate and equip rural residents with the tools for greater financial self-sufficiency.

Alaska is one of the most expensive states in the country. With a limited road system, shipment of goods depends primarily on air and barge throughout the year. In rural areas the result are prohibitively high prices for goods; in some villages bottled water is $30 a pack, and gas is $11 a gallon. Comparatively, the weekly grocery costs for a family of four in Portland, OR is $166, but in Dillingham it is $355. The lack of local banks in rural communities outside of the state's primary hubs has forced people to rely heavily upon multiple credit card accounts. Residents have to learn what it means to be credit worthy and how to properly leverage personal wealth and asset management. This is especially true in rural Alaska where the cost of living is high and the opportunity for employment low.

NeighborWorks Alaska moved to address the problem by extending its Keep the Change program to these vulnerable remote communities. The program, first launched in Anchorage in 2014, equips residents with the tools for financial self-sufficiency. The goals are to increase credit scores, promote regular savings, reduce overall debt and create more opportunities for homeownership. To launch our expansion effort statewide, we partnered with Alaska Growth Capital (AGC), a subsidiary of Arctic Slope Regional Corporation (ASRC), a private, for-profit corporation specializing in energy support services and economic development. ASRC is owned by and represents the business interests of nearly 12,000 Iñupiat shareholders living in the eight villages of the North Slope.

The challenges have been many, ranging from accessing remote villages to creating culturally-relevant course materials. Travel on Alaska's North Slope is primarily accomplished via air and extreme weather can instantly disrupt a carefully planned itinerary. On several occasions our program manager had to walk through and to villages (without incident thanks to the kind help of local residents) in "active" polar bear areas. These experiences reinforced the importance of collaborative communications with our partners.

The NeighborWorks Alaska way is and has always been to first listen and try to understand the needs of the communities we are working with before taking action. That's why we started by meeting with village sponsors, who are responsible for identifying their community's economic opportunities. We then developed a curriculum for financial education classes and forums and scheduled visits to all eight villages once a year over a three-year period. From those discussions, we agreed to focus our efforts at the household level to build proficiencies in budgeting, saving and credit management. We have since visited eight villages, attracted 42 participants, engaged 19 in counseling and received reports that most have reported improvement in their savings and credit management.

The Keep the Change program seeks to increase financial capability and help people manage their spending and saving behaviors. Smart financial practices strengthen stable housing opportunities, and stable housing strengthens the overall physical and emotional health of the entire community. The program has attracted positive interest, and we have developed close relationships with community leaders across the North Slope. Our partnership with AGC is part of our overall larger statewide strategy to support economic and social well-being by ensuring resource sustainability. We realize there are unique cultural aspects to this effort, and are moving very thoughtfully in this pilot program to build relationships with our regional sponsors and village leadership groups so the communities understand that our commitment to collaborate is for the long term.

We recognize that methods of successful and culturally appropriate outreach and communication already exist on the North Slope so we want to ensure that we are not imposing an outsider's approach on places that are bound closely by very specific interpersonal traditions and processes that have worked for thousands of years. In the Arctic, the community not the individual is the center of the circle. For our program to be effective, we must make sure our goals and accompanying curricula are in alignment with this cultural context. The value of using relevant examples in our classes that reflect the unique challenges of subsistence living is a critical part of our outreach. Gaining a better understanding of these conditions will give us more effective tools and materials and will enhance our ability to connect with rural residents, enhance their financial skills and consequently the well-being of the community as a whole.