Boost your business with a diversity certification
The COVID-19 pandemic has impacted virtually all businesses, but minority-owned businesses are twice as likely to be classified as “at risk” or “distressed” than non-minority businesses.1 Because of this, it’s important for minority and diverse businesses to find creative avenues for growth and success. And diversity certifications are proving to be a highly-effective growth vehicle for minority, women, LGBTQ, veteran and disability-owned businesses.
The diversity certificate is a third-party certification designed to ensure your business or non-profit meets certain criteria as a supplier, such as having at least 51% ownership of a person or persons of a diverse background. Earning the supplier diversity certification can be the key that opens the door to a host of benefits for your business. Specifically, businesses, nonprofit organizations and government agencies are looking to increase their diverse spending and often have specific goals and targets for supplier diversity. Having one or more diversity certifications is the best way to make sure your business gains the credibility and stamp of approval for organizations looking to expand their supplier diversity efforts.
Amid the economic uncertainty facing minority, diverse businesses and non-profits during COVID-19, the diversity certification has evolved from a nice-to-have to a must-have.
Lamont Robinson — CEO and founder of Robinson LaRueCo Consulting — in a recent webinar hosted by Voya Financial titled Growing Your Business or Nonprofit in 2021 explained: “Supplier diversity has shifted to become an economic imperative.”
Let's find out more about how you can complete the diversity certification process and its benefits to your company.
Who can qualify for a diversity certification?
While some of these organizations might have their own checklists, in general, your business will qualify based on the following criteria:
- The owner is a United States citizen
- The company is at least 51% owned by an individual or group of business owners who fit the target criteria (whether that’s based on race, gender, sexual orientation or another status such as being a veteran)
- The diverse owners carry out the management and daily operation of the business
- The company is located in the United States or one of its trust territories
How can a minority business receive a diversity certification?
Although any business or supplier can classify as diverse and say they meet the specified criteria, only third-party organizations can give your business or nonprofit a diversity certification after a formal review. This process typically involves documentation, screening, interviews and potential on-site visits. While the application may take a bit of effort and patience on your behalf, you will almost instantly become more attractive to supplier diversity programs, corporations and government contracts.
Where can I attain a diversity certification?
Here are a few of the top agencies that offer widely accepted diversity certifications:
- National Minority Supplier Development Council (NMSDC)
- Women’s Business Enterprise National Council (WBENC)
- National Women’s Business Council (NWBC—to be eligible for federal contracts)
- National Veteran Business Development Council (NVDBC)
- National Veteran-Owned Business Association (NaVOBA)
- Vets First
- National LBGT Chamber of Commerce (NGLCC)
5 key benefits of diversity certifications for your business or nonprofit
As mentioned above, the advantages are vast once you obtain your diversity certification. Here are five benefits to consider:
Access to opportunities
Many corporations today have built supplier diversity programs for several reasons that put them at a competitive advantage, explains Robinson. "Often customers will buy products and services from those entities just because they have supplier diversity as a program," he says.
Companies and nonprofit organizations might focus on supplier diversity because their customers have requested they partner with vendors who mirror their own qualities, or the organization sees it as a way to stand out from their competition. In the past, many organizations were driven by a need for compliance, especially for government contracts, whereas now they realize it's a core corporate responsibility for them to help serve their community. "The more you support local small businesses, the more those businesses are adding jobs to the communities" Robinson highlights.
This focus on supplier diversity is not confined to for profit entities: diversity certifications can open the door to lucrative government contracts, given that many have strict supplier diversity goals.
Once you achieve diversity certification, your company will be included in searchable databases that corporate and government entities turn to when they are looking fordiverse suppliers. The certification also adds credibility to your advertising and promotions on your website, signage, business cards, presentations and other branding activities.
Access to capital
As a certified member of these groups, you can connect with exclusive loans or grant programs they may offer as a benefit to their members. You can also leverage your certification in applications for small business loans or in third-party investments for your organization. For example, Voya is sponsoring a grant for small businesses that were certified through the NMSDC.
Many of the organizations that offer third-party diversity certifications are also lobbying organizations that work to keep your best interests as a diverse business or nonprofit owner front and center. They keep their finger on the pulse of upcoming local or national legislation that might affect you and work with the appropriate politicians to make sure your group’s viewpoint is considered. "These are entities that are constantly finding ways to create development opportunities to make sure that you are successful," Robinson notes.
Training and networking opportunities
The certification organizations mentioned above typically offer a robust slate of educational programming, whether its access to educational content, networking or mentoring tailored to diverse business needs. Many host webinars, podcasts and other meetings.
The key is to make the effort to explore the networking options that are offered. "Go out there and be extremely active in engaging in those opportunities" Robinson urges.
Voya’s Just Right Advantage program offers support for diverse business owners and nonprofits
As a part of Voya Financial’s ongoing support for minority, women, LGBTQ+ and veteran- owned businesses and nonprofits, we launched the Just Right Advantage™ program. This first-of-its-kind program was created to help employers and organizations within undercapitalized, underserved and "under-saved" communities by offering education, guidance and a fee credit when they establish or retain their retirement plan with Voya.
The new program further expands on Voya’s recent efforts to help Americans address the financial challenges of COVID-19 by helping to support the employees within these businesses and organizations as they become better prepared for retirement.
For more tips and information on gaining success as a diverse business owner, watch Voya’s recent webinar, "Growing your business or nonprofit in 2021".
1 Small business credit survey: 2019 report on minority-owned firms, Federal Reserve Bank of Atlanta, December 2019, https://www.fedsmallbusiness.org/survey/2019/report-on-minority-owned-firms
This information is provided by Voya for your education only. Neither Voya nor its representatives offer tax or legal advice. Please consult your tax or legal advisor before making a tax-related investment/ insurance decision.
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