Category: certified diverse business

Understanding Supplier Diversity Certifications

There are a lot of supplier diversity certifications your business can apply for, but which ones are the best certifications for your business? In this article, we’ll break down supplier diversity certifications, including the application process, what documents you’ll need, turnaround time to receive your certification, and how often you’ll need to renew your certification.

So, What Is a Diverse Supplier, Anyway?

In brief, a diverse supplier is a business of any size that is owned and operated by an individual or group of people that is part of a traditionally underrepresented or underserved group. In the US, there are seventeen categories used to identify diverse businesses. Note that ownership is specific to the legal ownership of the organization, while operations relates to the day to day running of the organization. Internationally, there are five classifications, but there may be more depending on the country in question.

Could My Business Be Classified as a Diverse Supplier?

If you meet the criteria for any of the classifications listed below, chances are your business could be classified as a diverse supplier:

U.S. Classifications:

Disabled Owned – A business that is a least 51% owned by one or more disabled persons who control and operate the business. Control in this context means exercising the power to make policy decisions and operate means being actively involved in the day-to-day management of the business.

Disabled Veteran Business Enterprise (DVBE) – This term is used by the State of California, public utilities, and many private corporations to designate a company that is owned (at least 51%) and controlled by a Veteran with a Service-Connected Disability rating of at least 10% from the Department of Veterans Affairs. Additionally, the Veteran must reside in the state of California.

Disadvantaged Business Enterprise (DBE) – A business that is usually certified by a federal, state or local government agency as having met all of the government standards that award eligibility, but may include women, minority, disabled and other disadvantaged as a result of economic disadvantages with respect to education, employment, residence or business location or social disadvantage and lack of business training.

Disadvantaged Veteran Enterprise (DVE) – A business that is a small business concern owned and controlled by veterans, where not less than 51% is owned, controlled, and managed by veterans.

Historically Black Colleges / Universities & Minority Institutions (HBCU/MI) – Historically Black and minority colleges and universities that are recognized by the government as legitimate set-aside business opportunities.

HUBZone Certified – A business that is operating in a certified historically underutilized business zone. There are 7,000 qualified census tracts (HUD) and 900 qualified non-metropolitan counties.

LGTB Owned (LGBT) – A business that is at least 51% owned and operated by an LGTB person(s).

Minority-Owned – A business that is at least 51% owned by, and whose management and daily business operations are controlled by, one or more members of a socially and economically disadvantaged minority group, namely U.S. citizens who are African Americans (Black), Hispanic Americans, Native Americans, Asian-Pacific Americans, Alaskan Native Americans and Indian Sub-Continent Americans.

Minority Business Enterprise (MBE) – A Minority Business Enterprise usually certified by a federal, state or local governmental agency as having met all of the government standards that award eligibility.

Service-Disabled Veteran (SDV) – A business that is owned by one or more veterans with a disability that is service-connected. The term “service connected” means, with respect to disability, that such disability was incurred or aggravated, in the line of duty in the active military, naval or air service. (38 U.S.C. ‘101(16).

Small Business – A business considered eligible for assistance from SBA as a small business is one that is organized for profit, with a place of business located in the United States. It must operate primarily within the United States or make a significant contribution to the U.S. economy through payment of taxes or use of American products, materials or labor. Together with its affiliates, it must meet the numerical size standards as defined in the Small Business Size Regulations, 13 CFR 121

Small Disadvantaged Business (SDB) – Small Disadvantaged Business: New certification eligibility criteria established by the SBA effective 7/1/99. All firms must be certified by one of the SDB Certification Agencies designated by the SBA. To qualify must be a small business, not exceed standards for Primary SIC, meet Contracting Officers’ assigned SIC code, be a U.S. Citizen and be 51% owned and controlled by one or more Socially & Economically Disadvantaged Individuals. The SBA classification is based on a Preponderance of the Evidence Clause” this SDB Certification is good for 3 years.

Veteran Business Enterprise (VBE) – Under SBA Guidelines Small Business Act (PL 85-536) as amended states: Small Business Concerns owned and controlled by veterans not less than 51% owned by one or more veterans and in the case of a publicly owned business not less than 51% of the stock is owned by one or more veterans.

Veteran Owned – A business that is a least 51% owned by one or more veterans, who control and operate the business. Control in this context means exercising the power to make policy decisions and operate means to be actively involved in the day-to-day management of the business. The term “veteran” (38 U.S.C.’101(2)) means a person who served in the active military, naval, or air service, and who was discharged or released there from under conditions other than dishonorable.

Vietnam Veteran – A business that is a least 51% owned by one or more Vietnam Veterans who served between 1/1/59 and 5/7/75 and have control and operate the business. Control in this context means exercising the power to make policy decisions and operate means to be actively involved in the day-to-day management of the business.

Women-Owned – A business that is at least 51% owned by, and whose management and daily business operations are controlled by one or more women who are U.S. citizens.

Woman Business Enterprise (WBE) – A Women Business Enterprise usually certified by a federal, state or local Government agency as having met all of the government standards that award eligibility.

8(A) Designation – The 8A designation is given to small companies owned by socially and economically disadvantaged persons, so that they may bid and obtain federal government contracts and other assistance to develop their business. The business owner must be eligible under the same rules and guidelines set down by the federal government.

International Classifications:

Disabled Owned – A business that is a least 51% owned by one or more disabled persons who control and operate the business. Control in this context means exercising the power to make policy decisions and operate means to be actively involved in the day-to-day management of the business.

LGTB-Owned – A business that is at least 51% owned and operated by one or more LGTB person(s)

Minority-Owned – A business that is at least 51% owned by, and whose management and daily business operations are controlled by, one or more members of a socially and economically disadvantaged minority group. Minority (ethnicity) is defined by country as the socio-economic under-represented. Intel does not require disclosure of ethnicity per privacy policy. Disclosure of ethnicity is voluntary, not a requirement.

Veteran Owned – A business that is a least 51% owned by one or more veterans, who control and operate the business. Country exceptions: Israel, Taiwan

Women-Owned – A business that is at least 51% owned and operated by one or more women.

Which Supplier Diversity Certification is Right for My Business?

Now that you’ve figured out what classification your business falls into, it’s time to think about getting certified for those classifications. Keep in mind that just because you think your business qualifies as diverse doesn’t mean that your business actually qualifies as diverse. Most organizations with supplier diversity programs and initiatives won’t enter into a contract with a diverse business unless that business has a third-party certification to prove diversity status.

There are several types of supplier diversity certifications you can obtain for your business. You can self-certify, but most businesses require a third-party certification in order to enter into a contract with your diverse business. Federal certifications, state-level certifications, local certifications and certifications issued by non-governmental organizations (NGO) are all considered third-party certifications, and those are the certifications we’ll be going over.

Below is a list of currently available non-governmental third-party supplier diversity certifications, and who these certifications apply to:

Third-Party Supplier Diversity Certificates

National Minority Supplier Development Council (NMSDC)
- African-American (Black), Asian-American, Native American, Alaskan Native American, Indian Sub-Continent American, or Hispanic-owned businesses
Women’s Business Enterprise National Council (WBENC)
- Woman-owned businesses
National Gay & Lesbian Chamber of Commerce (NGLCC)
- LGBT-owned businesses
United States Hispanic Chamber of Commerce (USHCC)
- Hispanic-owned busineeses
Asian Pacific American Chamber of Commerce (APACC)
- Asian-American and Pacific Islander-owned businesses
Native American Chamber of Commerce (NACC)
- Native American-owned businesses
Vets First Certification Program
- Veteran-owned businesses
Disability:IN
- Disability-owned businesses
SupplierGATEWAY
- African-American (Black), Asian-American, Native American, Hispanic, Woman, Veteran, and Disability-owned businesses.

It’s important to note that a single business can hold multiple certifications. Say, if you’re a lesbian Native American woman who owns a business, you’d be eligible for four separate certifications—one from National Minority Supplier Development Council (NMSDC), one from Women’s Business Enterprise National Council (WBENC), one from Native American Chamber of Commerce (NACC), and one from SupplierGATEWAY.

The Supplier Diversity Certification Process

Most diversely-owned businesses obtain their certifications via a third-party certification agency. This is an organization that promotes the business development of a particular group of minority and/or underrepresented people. The process or getting certified varies based on organization, but most require the following in order to certify your business:

Documentation. All of the certifying organizations listed above require documentations to attest to the truth of your diversity statements.
Screenings and interviews. You, your staff, and other members of your organization may be interviewed and screened.
On-site visit. Some organizations require site visits to visually and physically confirm the diversity of your business.
Waiting. Most applications take several weeks to be approved.

SupplierGATEWAY’s Enhanced Digital Certification® does not require a site visit and is done entirely online via supported documentation and identity verification. The approval process is also expedited—applications are generally approved within 3-5 days, if not sooner. The Enhanced Digital Certification® is also all-in-one and certifies many different classifications with one certificate.

Why is Supplier Diversity Certification Important?

Supplier diversity certification is important for several different reasons. Firstly, most buyers with supplier diversity programs won’t do business with your diverse business unless you have third-party certification to back up your diversity claims. Businesses with supplier diversity programs oftentimes struggle to find diverse suppliers to give contracts to. Being certified means that your business can be identified as diverse, which will help you gain contracts from those companies looking for diverse suppliers. Certification also opens the door for government contracts as well. In the US, the federal government requires that federal projects use a certain percentage of diverse suppliers.

Certification also opens the door to the networks associated with your certifications. For example, once your business is certified, your business will be entered into a database full of other diverse suppliers. Large corporations and other organizations with supplier diversity initiatives rely on these databases to find diverse suppliers to do business with. Aside from exposure to buyers looking for diverse suppliers, your certifications often come with access to specific events, educational opportunities, and business development tools that your business wouldn’t have access to otherwise.

Outside of financial benefit to your business, certification also offers social benefits for supply chain management and corporate responsibility initiatives. Through certification, diverse businesses can work together to advocate for diversity and effect change within current supply chain management culture. The more businesses that become diversity certified, the more robust corporate supply chain diversity programs can become, causing a positive feedback loop for ever-increasing supply chain diversity.

Introduction to Supplier Diversity Certifications

Updated 2/28/2022

The initial goal of Supplier Diversity programs was to combat social injustices in the United States by supporting growth and jobs at underrepresented small businesses. Over the last few years, buyers have also realized that effective inclusive procurement also delivers significant benefits to the bottom line and can drive innovation.

Following the old axiom “What gets measured gets done,” many corporations with Corporate Social Responsibility (CSR) programs measure the effectiveness of their supplier diversity efforts by “counting” every dollar spent with diverse suppliers in all categories. To be sure they are measuring correctly, most companies tend to utilize third-party processes to validate the diversity data.

Diversity Certification for Suppliers is Important

All of these are important to you as a supplier. Why? A “certified” version of you is more attractive to a corporate buyer with a CSR program than a “not certified” version of you (all other things being equal – quality, performance, customer service and price are all still very important.)

Hence, if spending with certified suppliers is deemed more reliable and thus better to count, the smart move is to become certified and make it easier for your prospective customer to pick you.

Now that we know how important inclusion is to your customers, it’s time to do all you can to leverage your position as a diverse-owned business. If you’re curious about how to identify if you’re a diverse-owned business specifically, check out this article for a more in-depth breakdown of different classifications.

Traditional Supplier Diversity Certifications

Below is a list of traditional supplier diversity certification entities. This list is not exhaustive, and there are many more certifying bodies both at the local and state levels depending on where your business is headquartered.

National Minority Supplier Development Council (NMSDC)
- African-American (Black), Asian-American, Native American, Alaskan Native American, Indian Sub-Continent American, or Hispanic-owned businesses
Women’s Business Enterprise National Council (WBENC)
- Woman-owned businesses
National Gay & Lesbian Chamber of Commerce (NGLCC)
- LGBT-owned businesses
United States Hispanic Chamber of Commerce (USHCC)
- Hispanic-owned busineeses
Asian Pacific American Chamber of Commerce (APACC)
- Asian-American and Pacific Islander-owned businesses
Native American Chamber of Commerce (NACC)
- Native American-owned businesses
Vets First Certification Program
- Veteran-owned businesses
Disability:IN
- Disability-owned businesses

Supplier Diversity Certification in the Digital Age

SupplierGATEWAY uses advanced technology to enable sole proprietorships and small businesses who have limited resources (time and budget) to become certified and ultimately expand the opportunity to do business with major companies.

The Enhanced Digital Certification™ (EDC) is a fast and inexpensive way for a small business to get certified as a diverse-owned organization while at the same time exposing to new opportunities afforded by being in the SupplierGATEWAY network. EDC certifies all of the following categories and you can have more than one diversity category in your certification:

Minority-owned
Women-owned
Veteran-owned
LGBTQ-owned
Disability-owned businesses
Small Disadvantaged Business (SDC)

To learn more, please visit here.

How To Scale Your Supplier Diversity Program

The pool of diverse businesses has been significantly increasing in the past few years.

According to the U.S. Senate Committee on Small Business and Entrepreneurship, there are over 4 million minority-owned companies in the United States with annual sales totaling close to $700 billion.

However, many corporations still face the challenge of scaling their diverse supplier engagement in a meaningful way. In other words, expanding the supply base to be more inclusive of companies that are owned by minorities, women, veterans, LGBT and other demographic groups can seem easier said than done.

After more than 20 years of offering supplier diversity solutions to thousands of organizations of all sizes, we have found that technology can be your best friend, empowering you with almost limitless capabilities. The “magic” of digital tools enables you to quickly scale your program quickly and efficiently, even while you’re building and maintaining strong supplier relationships.

The Benefits of Scaling Your Supplier Diversity Program

If you’re wondering why scale matters, consider the following benefits that are available to you when you have a robust supplier diversity program:

Drive innovation and improve the bottom line
Stay competitive by attracting more consumers to shop and work at the organization
Gain widespread recognition for your inclusive supplier diversity practices
Uplift communities and effect economic impact

That said, to achieve your goal of scaling your supplier diversity program for maximum impact, installing new software is not enough. Best practices strongly suggest creating a detailed and concrete plan, and being realistic and disciplined about your implementation goals and timeline – some would say this is the hardest part. The following five methods are great starting points to make full use of technology to achieve your objectives.

How to Scale Supplier Diversity

1) Leverage Your Existing Supplier Relationships

Before looking for more diverse suppliers in the open market, take the time to review your existing supplier population first. You might be surprised by how many diverse suppliers are in your existing supplier base that already meets your requirements, but you didn’t know they were diverse. Expanding opportunities for those suppliers minimizes risk, expands your impact and gets things rolling quickly.

Data Enrichment is a quick and painless way to figure out the demographics of the companies that you are doing business with. It also gives you a chance to establish some baselines for measuring improvement and inclusion growth later.

2) Utilize Supplier Databases To Find New Suppliers

Suppliers of all sizes try their best to maximize their visibility by registering on platforms that allow them to find new opportunities with potential buyers. This is no different for diverse suppliers. It doesn’t hurt to leverage software to find new potential sources, and you may find exceptional value within easy reach.

SupplierGATEWAY’s database is the world’s largest active diverse supplier community with hundreds of thousands of suppliers from different demographics making this your one-stop shop for finding diverse suppliers. Beyond access to important supplier capabilities information, we also make it easy for you to find and engage suppliers of all types and with all certifications, including the new Enhanced Digital Certification.

In addition to searching for suppliers using advanced tools, you can make the process easier by taking advantage of other tools such as the opportunity posting system to find the specific supplier you need.

Our QuickConnect Matchmaker is a unique solution to take things one step further by enabling you to quickly and conveniently organize and schedule one-on-one web meetings, conference calls, or even in-person with potential suppliers at your convenience, with automated scheduling and screening.

3) Promote Your Supplier Diversity Efforts

Another best way to expand your network is to publicize your supplier diversity efforts. There are many channels you can use, such as social media, press releases, podcasts, etc. Depending on your goal, budget and scale size, you set a specific plan for each channel to deliver the messages and potentially reach out to new diverse suppliers.

Innovative programs are not shy about letting prospective suppliers know about the ins and outs of doing business with their company. One popular method is via webinars and briefings through platforms like the SupplierGATEWAY event calendar or other technology tools.

Once your efforts gain traction, you not only attract more potential diverse suppliers but also lead to a positive brand reputation in the public. According to a study in The Hackett Group, top supplier diversity programs have relied on social media to increase market share and promote supplier diversity initiatives.

4) Encourage Suppliers to Become Certified

When talking about doing more business with diverse suppliers, the topic of certification is usually front and centre. The good news is that SupplierGATEWAY’s recently launched Enhanced Digital Certification (EDC), a new fast and low-cost option for suppliers to get certified.

Certification as a diverse supplier opens up access to new networks and new opportunities. Certification also helps buyers meet compliance requirements for small business reporting – so it’s good for both buyers and suppliers.

With this in mind, SupplierGATEWAY Enhanced Digital Certification (EDC) provides a digital platform for diverse suppliers to get certified in less than a day at a low cost of $25.

With more than 11 million diverse businesses in the US and countless more around the world that are currently not certified, SupplierGATEWAY’s Enhanced Digital Certification is proving to be an affordable and attractive fast track way to certify a wide range of suppliers such as sole proprietorships and independent contractors.

5) Sponsor Diverse Suppliers

Depending on the corporate diversity programs, buyers can sponsor certification programs for diversity suppliers at a very low cost. Many of our corporate buyers have found this to be an attractive solution.

For example, for the low sum of $2500, a corporate buyer can sponsor 100 diverse certifications while at the same time having access to SupplierGATEWAY’s multi-million record database of suppliers. Furthermore, as SupplierGATEWAY’s EDC is a one-stop diversity certification for all categories of diverse suppliers such as minorities, women and veterans, buyers do not have to pay separately for access to the different categories of diversity suppliers.

About SupplierGATEWAY:

SupplierGATEWAY is a leading cloud-based, instant-on, low-priced digital supplier management platform, which automates and simplifies supplier and vendor management. SupplierGATEWAY’s tools and solutions can be deployed individually or in any combination, and easily integrated with existing AP/ERP infrastructure.

The tools and solutions capabilities encompass Supplier Registration and Enablement, P2P Sourcing & Procurement, Supplier Management, Financial Risk Monitoring, Supplier Compliance Management, Corporate Responsibility/Diversity and Vendor Credentialing.

To learn more, please visit supplierga3dev.wpenginepowered.com.