Diversity certification is when a diverse-owned organization employs a third-party certification agency to validate its diversity category and ownership status.
Types of supplier diversity certification
Diversity certificates for business may be issued by federal, state, or local government agencies such as the U.S. Small Business Association (SBA) or Department of Veteran Affairs (VA).
Certifications are also issued by diversity-focused third parties that have developed their own eligibility criteria, including the National Minority Supplier Development Council (NMSDC), Women’s Business Enterprise National Council (WBENC), and National Gay & Lesbian Chamber of Commerce (NGLCC).
Both government and third-party certifying agencies offer many different types of certifications, such as:
- Disadvantaged Business Enterprise (DBE)
- Disability-Owned Business Enterprise (DOBE), certified by Disability:IN
- Historically Underutilized Business (HUB)
- HubZone (Historically Underutilized Business Zone)
- LGBT Business Enterprise (LGBTBE), certified by NGLCC
- Minority Business Enterprise (MBE), certified by NMSDC
- Service Disabled Veteran Owned Small Business (SDVOSB)
- Small Business Enterprise (SBE)
- Small Disadvantaged Business (SDB)
- Woman-Owned Small Business (WOSB)
- Women’s Business Enterprise (WBE), certified by WBENC
- Veteran Owned Small Business (VOSB), verified by Veteran Affairs, certified by NVBDC or NaVOBA
Why diversity certification is important for Traders and Sellers
Supplier diversity certifications serve as proof that your organization meets inclusion program requirements, thereby opening the door to business opportunities that may not be available to non-certified suppliers. Many of these opportunities are offered by government agencies, some of which are required by law to source a certain percentage of their supply needs from certified diverse-owned businesses and small businesses.
How to get diversity certified
Each type of diversity certification has its own requirements; check with the issuing organization for details. Typically, certification agencies require owners to provide proof that they belong to a diverse group — in most cases, at least 51% of a company must be owned by a member of the designated group. Owners may also be required to be U.S. citizens or permanent residents, and the business must operate within the U.S. Other possible criteria include business location, net worth, or company size, and some certifications require agency visits to the business site.