Strategic advice | August 2024 An Alaska Native Corporation builds profit for a higher purpose

• TKC has a unique structure and mission that sets it apart from other for-profit companies.
• TKC needs to ensure consistent profits to continue meeting shareholder support requirements.
• Securing government contracts is often time-consuming and complex.

• In-depth conversations ensured that Truist understands TKC’s mission and the challenges it faces in achieving it.
• Over time, Truist raised TKC’s credit line from $8 million to $15 million to increase access to working capital.
• Truist’s experience with government contracting assists TKC in meeting financial requirements of the procurement process.

As one of the largest Alaska Native Village Corporations, The Kuskokwim Corporation (TKC) has a mission that goes beyond just turning a profit.

“We’re responsible for the management and stewardship of nearly a million acres of land and for improving the lives of our Alaska Native shareholders,” says Andrea Gusty, president and CEO of TKC.

Those 4,300 shareholders are descendants of the 1,100 people who called the Kuskokwim region home in 1971, when the U.S. government passed the Alaska Native Claims Settlement Act. The law settled aboriginal land claim disputes and created a network of regional and village corporations that would manage the land and support the people who live there. TKC was formed by the merger of 10 smaller village corporations in 1977.

“Many of our shareholders live below the poverty line,” says Gusty. “We have communities with no roads, no running water, no flushing toilets. The work that we do allows us to step in and help build that needed infrastructure.”

It’s a mission that’s personal to Gusty, who grew up in the Kuskokwim region and is a TKC Shareholder herself.

“We have the obligation, both by this federal act that was so unique and by our Alaska Native values, to help make our people’s lives better,” says Gusty. “That’s what we were created to do.”

TKC’s structure was crafted with this imperative of success in mind. In order to streamline business decisions and protect core assets, TKC created TKC Development (TKCD) in 2005.

“TKCD is TKC’s business holding company,” says Race McCleery, CFO of TKC. “Its primary purpose is to develop a successful and diversified business portfolio that will provide consistent profits.”

TKCD operates a dozen subsidiary businesses in the lower 48 United States. Their profits go back to Alaska to fund shareholder dividends and various economic development projects. But, McCleery says, ensuring those profits stay consistent is one of the biggest challenges TKC faces. Diversifying their portfolio with varied lines of business—including both government contract work and private sector projects—has been key.

“Some of our subsidiaries specialize in construction and aviation maintenance—industries that aren’t always predictable,” says McCleery. “To produce more consistent profits, we’ve added several business lines, including government agency staffing and initial outfitting, where we provide government medical facilities with turn-key solutions such as design, transition services, and procurement of furniture and medical equipment.”

TKCD subsidiary businesses focus on using the Small Business Administration’s 8(a) program to pursue federal contracts. TKCD also owns Kuskokwim Properties, which operates six apartment complexes in the Alaskan cities of Anchorage and Soldotna.

When McCleery met Truist Commercial relationship manager Omar Ramberan in 2015, he was looking for a financial partner and advisor who could appreciate the complexities and nuances of an Alaska Native Corporation—and tailor solutions to meet the needs of TKC’s unique business model.

“We have responsibilities that other for-profit corporations don’t have, such as managing lands and retaining the culture and heritage of our shareholders,” says McCleery. “We needed some financial flexibility to be able to perform those functions.”

The relationship began with long conversations about TKC, its mission, and what’s important to it as an organization.

“Those conversations are the first step in Truist Business Lifecycle Advisory,” says Ramberan. “Getting to know a business inside and out helps us provide the resources and support they need at every stage. And I could tell from our initial meeting that TKC understands the need for a partnership versus a commodity. It deepens the relationship when you know a client is truly invested and values the partnership.”

Based on that knowledge and understanding of TKC’s unique setup and mission, Ramberan developed a customized set of solutions to help the company deliver value to the Alaska Native people and the region it serves. That included a line of credit with debt covenants flexible enough to allow the company to achieve its mission, as well as commercial banking, investment management, foreign exchange services, and virtual credit cards for employees. Truist’s experience with government contracting has also helped TKC navigate the paper trails that go along with applying for and securing government contracts.

“Omar also connected us with an insurance provider that got us much more competitive rates for our employee benefits coverage and corporate insurance, saving us significant expense annually,” says McCleery. “That savings is critical for TKC and its subsidiaries to remain competitive.”

Gusty emphasizes that every penny of profit goes back to the shareholders—either through direct assistance or to fund critical infrastructure development in the Middle Kuskokwim River Region. The initial insurance savings, for example, funded Connect TKC, a project that helped improve connectivity by providing each household with a Starlink internet receiver.

“Being able to access the world at large was a game changer for them,” says Gusty. “We suddenly had people who could work from home and kids who could access educational opportunities that they couldn’t otherwise.”

Through the TKC Brighter Futures project, Gusty’s team swapped 10,000 regular lightbulbs for more energy-efficient LED bulbs. And the company is working on renewable energy projects involving wind and solar power, as well as a sustainable housing project.

“All these initiatives are made easier with a financial partner that’s flexible enough to help us not only save money but make money in a more efficient way,” says Gusty.

Ramberan says it’s all about taking care of the small things so Gusty, McCleery, and their teams are free to focus on more strategic goals.

“We’re taking care of the tactical in a very thoughtful way,” he says, “and that allows them to grow strategically.”

If you look closely at The Kuskokwim Corporation’s logo, you’ll see it’s a traditional Alaska Native utility knife called a uluaq. Paired with the tagline, “Cutting a path to a better future,” it’s a literal depiction of TKC’s mission—improving lives while preserving cultural heritage.

“We have a foot planted in two worlds,” says Gusty. “One is deeply planted in our Alaska Native ways of life, and the other is in the Western world at large. We need to be successful at both to thrive as Native people.”

Ramberan says he feels the importance of the role Truist plays in supporting that vision for the future.

“I feel like we’re one cog in the wheel of TKC’s mission,” he says. “When the relationship began, I traveled to Alaska to meet the board. One gentleman looked me in the eye and said, ‘Please don’t mess this up.’ To have their trust is an immense honor. I don’t take it lightly.”