► The AFN and The Entrepreneurial Innovation of the Spark Sisters

Background:

Alaska has five regions called the: Inside Passage, South-central, Interior, Far North and Southwest.  Alaska has approximately 85,000+ Alaskan natives (15% of the state’s population) and 50% live in urban areas, which Anchorage is the city where most Alaskan natives (about 14,000+) reside.  The rest live in about 213 villages that have about an average of 2,500 people.  Alaskan natives speak about 20 different languages and have 7 distinct groups of peoples: the Yup’ik, Inupiat, Aleut, Athabaskan, Tlingit, Haida and the Tsimshian peoples.

These Alaskan Native villages operate under 12 Alaskan Native corporations since the passing of the 1971 Alaska Native Claims Settlement Act or ANSCA.  These corporations are unique and operate in regions and are independent with high entrepreneurial goals and own a plethora of subsidiaries that oversee a diverse range of services for Alaskan Natives and local communities.

Framework:

I will explain the creation of ANSCA and how it created an opportunity for rural economic development for one start-up beauty company and I will address how they exercised their entrepreneurial pursuits in rural Alaska.

1971 Alaska Native Claims Settlement Act (ANSCA):

In December 1971, the United States Congress made into law the Alaska Native Claims Settlement Act (ANCSA), which created the 12 regional corporations for over 200+ Alaskan Native villages and communities.  A 13th corporation was added later to represent those Alaskan Natives who resided outside of Alaska.  Under ANCSA, the Alaska Natives gave up their claims to their land in exchange for a $962.5 million settlement and about 44 million acres (10% of Alaska).  So, where ever Alaska Natives resided on April 1, 1970, determined which village corporation or regional corporation they had to enroll in.

Surface and Subsurface Estates:

About 27.6 million acres became surface estate (or title), which was divided among the village (for-profit) corporations and who then gave a subsurface estate rights (same territory) to the 12 regional Alaskan Native corporations.  ANCSA allowed village corporations to select the surface and subsurface estates.  Regional corporations also received full surface estate titles to an additional 16 million acres.  The settlement amount came out to $3.00 an acre after all the divisions were finalized.

Corporations Forming:

Section four of ANCSA eliminated existing Indian reservations except Annette Islands Reserve.  The Sitka, Juneau, Kenai and Kodiak (Alaskan Native) communities didn’t meet the requirements to be village corporations and so they formed urban corporations.   About 9-10 Alaskan Native communities were too small to be village corporations and so they became group corporations.  There were four Alaskan native reservations who accepted the surface and subsurface estate (rather than cash payments for their land settlement) which were; St. Lawrence Island, Elim, Chandalar, and Tetlin.

Alaskan Native Corporations:

Alaska’s is a diverse state government that embodies a regional and local government structure called boroughs, in which is about one-third of Alaska or sixteen boroughs.  Each boroughs have over 200+ federally recognized tribal governments that co-exist as local and regional Alaskan Native Corporations (ANC).  Every borough have many individual and distinct governing responsibilities and relations.  There are 12 Alaskan Native Regional Corporations governing 229 federally recognized Alaskan Native communities and villages called the Ahtna Incorporated, Aleut Corporation, Arctic Slope Regional Corporation, Bering Straits Native Corporation, Bristol Bay Native Corporation, Calista Corporation, Chugach Alaska Corporation, Cook Inlet Region Inc., Doyon, Limited, Konaig Inc., NANA Regional Corporation, Sealaska Corporation.

The Calista Corporation:

The Calista Corporation is an Alaska Native Regional Corporation (since 1971) for 56 federally recognized tribes for more than 20,000 Alaska Native shareholders in Southwest Alaska (approx. 57,000 square miles).  The Calista Corporation’s regional area includes the villages located on the Lower Yukon River, on Central and Lower Kuskokwim River, Nunivak Island, and the Bering Sea coast (Upper mouth of the Yukon River to Cape Newenham).  Calista maintains 56 villages that also have an additional 46 individual corporations. This region have Alaskan native people who are (or part) Yup’ik, Cup’ik and Athabascan societies where many practice traditional customs, speak their Native language, and practice subsistence lifestyle.  The Calista Corporation’s mission is to Increase Shareholder benefits and economic opportunities through innovation, leadership and financial discipline.  Their vision is to increase financial prosperity through investments and business ventures globally.

In 1994, Board of Directors from the Calista Corporation created the Akilista Fund in order to distribute shareholder’s dividends (in perpetuity). With more than 20,000 shareholders the Calista Corporation provides assistance to shareholders through education, internships, job training, and elder benefits.  Calista Corporation consists of 35 subsidiaries that provide services such as heavy civil and arctic construction, natural resource development, real estate investments, telecommunications, and much more.  Since 2008, the Calista Corporation transfers their revenue to this fund (periodically) totaling to more than $12.2 million today.

In 1994, the corporation created the Calista Heritage Foundation, a scholarship awards program.  Since then, the foundation has awarded $2.4 million dollars in scholarships.  The foundation also has an internship program that assists students in gaining professional skills.  In 2011, the foundation sent 12 interns to one of their subsidiaries called Yulista Aviation, Inc. in Alabama where they received training in aeronautical engineering environment.C

The Calista Corporation region face many challenges such as high costs of fuel and living expenses, low employment and low wages, and low graduation rates. The Calista Corporation have basic rural infrastructures that further need infrastructure development and improvement, and this region also has no roads that connect to other communities.

The Alaska Federation of Natives (AFN):

The Alaska Federation of Natives (AFN) was established in October 1966, when 400+ Alaska Natives who represented 17 Native organizations came together to discuss the land rights of the Alaska Natives. From there on for 5 years AFN lobbied for fair and just land settlements with the U.S. government. On December 18, 1971, Congress passed the Alaska Native Claims Settlement Act (ANCSA).

Before ANSCA, the Alaskan natives (200+ villages) held claim to 365 million acres of land that was not held in any trust with the U.S. government.  In 1969, oil was discovered on Prudhoe Bay, which played a huge role in speeding up the process in settling land claims.  After the passing of ANSCA, the land settlement with the Alaskan Natives was transferred into state chartered business corporations.  This forced Alaskan Natives to accept policies that had limitations to corporate stock (also called common stock or settlement common stock), which was that it could be sold or rid of in 20 years and expired December 18, 1991.  Corporation shares were issued to about 80,000 Alaskan Natives.

The Alaska Federation of Natives (AFN) is operated by 37 (annually elected) board members that improve and promote the cultural, economic, and political conditions of Alaskan Natives.  AFN is a membership organization of 178 villages from federally and non-federally recognized tribes and village corporations.  AFN members are also Native corporations that consist of 13 regional Native corporations and 12 regional nonprofit organizations and tribal affiliates.  AFN advocates for preservation, protection, and sustainability of Alaskan Native lands, their cultural traditions, promotes economic development, and exercises political initiatives.

The AFN’s Alaska Marketplace Initiative:

The Alaska Marketplace is an initiative that is part of the Alaska Federation of Natives’ education, health and economic development programs.  The Alaska Marketplace began in 2005 as a creative “ideas competition” where people with new ideas, financiers, experts, and entrepreneurs come together and to look for feasible and sustainable businesses proposals that produce economic development and serves communities in rural Alaska.  Today, the Alaska Marketplace has given away more than $1.5 million dollars

Modeled after the World Bank’s Development Marketplace, the Alaska Marketplace aspires to improve rural Alaska by giving monetary awards and support to its competition winners.  Alaska has some of the nation’s unique cultures and in sustaining them; the Marketplace has objectives that will help build thriving Alaskan Native communities by:

  • Giving rural communities opportunities to make income through their cultural knowledge
  • Promoting conservation of Alaska’s natural resources, reviving village centers, and sustaining tourism.
  • Build, respect, and do activities that strengthen social and diverse communities.

The Spark Sister’s

The Spark sisters are triplets Michelle and Cika Sparck and Amy Sparck Dobmeier who are from an Alaskan village called Chevak.  Chevak is the homeland to the Qissunamiut tribe and is also located in southwestern Alaska on the Yukon Kuskokwim Delta.  The Sparck sisters entered into the Alaska Marketplace’s “ideas competition” and won $90,000 in seed-money for their plan to bring economic stability back to their village. 

In 2006, the sisters created their company ArXotica in Bethel Alaska, a cosmetic beauty line that harvests local ingredients like crowberry, firewood blossoms, and arctic sage and 11 other vitamins and minerals to make potent anti-aging products.  They currently have a website where you can purchase their products.

Improving Their Community’s Economy:

Despite the challenges that the Calista Corporation face, they are meeting some for the challenges to improve economic development for its villages by giving its members an opportunity to create businesses that will bring revenue back to their communities and also participate in the U.S. market economy.  ArXotica is a unique community business model that is innovative because its products directly impact the community where they employ hundreds of local members to harvest the ingredients for the products (main ingredients).  These ingredients are location-specific and can’t be grown anywhere else and this is why it is so unique.  The Sparck sisters have embarked on a sustainable business that is successful and inspiring.

Bibliography:

“Alaska Native Corporation Links.” Alaskan Native Corporation Links. Aurora Webmasters, 11 July 2013. Web. 13 Oct. 2013. <http://fairbanks-alaska.com/alaska-native-corporations.htm&gt;

Resource Development Council, Inc. for Alaska “Alaska’s Native Corporations.” Accessed October 13, 2013. http://www.akrdc.org/issues/nativecorporations/overview.html

Yukon Kuskokwim region:
http://www.yupikscience.org/1intro/1-3.html

The Sparck Sisters story:
http://www.huffingtonpost.com/2012/02/23/arxotica-skin-care-from-the-arctic-tundra_n_1291803.html

Alaska Federation of Natives:
http://www.nativefederation.org/alaska-marketplace/

Alaska Marketplace:
http://www.alaskamarketplace.org/about-the-marketplace/history/

ArXotica:
http://www.arxotica.com

Encyclopædia Britannica Online, s. v. “Alaska,” accessed October 12, 2013, http://www.britannica.com.ezproxy1.lib.asu.edu/EBchecked/topic/12252/Alaska

Alaska Native Claims Settlement Act Amendments of 1987:
http://thomas.loc.gov/cgi-bin/bdquery/z?d100:H.R.278

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