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Many large corporations are looking to diversify the billions of dollars they spend with third-party contractors, particularly women- and minority-owned companies but also with LGBTQ businesses.

But for many LGBTQ companies, their qualification for these diverse supplier programs are not always apparently obvious and something was needed to fill the gap.

Enter the LGBTBE certification, a national program certifying that a business is at least 51% owned by a member of the LGBTQ community.

The process is certified nationally by the National LGBT Chamber of Commerce, a D.C. group founded in 2002. The group launched the program in 2004 to help small businesses qualify for diverse supplier programs from big spending companies like Wells Fargo and PG&E.

According to the NLGCC, a third of Fortune 500 and federal, state and local governments use LGBTBE certification as part of their diverse supplier programs.

How does the LGBTBE certification process work?

Businesses that can prove they are 51% owned by LGBTQ group members can apply for certification through the NLGCC by paying a $400 yearly fee. Local chapters of the organization send out members for site visits to make sure the business is being honest that a member of the community both owns the business and is involved in day to day operations.

“What it does is gives opportunities for contracting with major corporations and public agencies that are striving to diversify their contractors,” said Terry Beswick, executive director of the Golden Gate Business Association.

The GGBA is the oldest LGBTQ chamber of commerce in the world and now stands as a local affiliate of the national chamber. The vagueness of the group’s name harkens back to a time where LGBTQ businesses remained discreet about the sexual orientation of the owners. But now things have changed and coming out as a business has become a potentally lucrative prospect.

Members of the GGBA can get their fees for certification waived, although membership costs the same amount.

In his role as director, Beswick facilitates site visits himself to businesses to provide due diligence to support the certification process, checking back each year to make sure ownership of the business has not changed hands in a way to jeopardize its certification status.

“This process has become particularly significant in California just over the last several months as the California Public Utility Commission has established a goal of 1.5% procurement for contracting with public utilities that will be directed towards LGBTQ businesses,” he said. “And 1.5% doesn’t sound like a lot, but we’re talking about the total billions of dollars in contracts.”

The commission oversees large private companies that offer public utilities like PG&E and AT&T, mandating their supplier spending.

However, many companies have a long way to go before reaching the target. In 2020, PG&E allocated 0.06%, or $6.2 million, of supplier spending on LGBTBEs, while in 2021 it spent $10.6 million or 0.1%.

“Once you get certified, you have to often register with different corporations as a diverse supplier, so that you get notified of contracting opportunities,” Beswick said. “What we hear is that there’s a wide range of potential contracting opportunities, like recently, I had Apple reach out to me and say, “Do you have any LGBT certified businesses in South Bay that do landscaping?’”

What is the benefit of the LGBTQE certification?

Audry deLucia owns a printing business in San Francisco, Ellaprint. She says she received LGBTBE certification 10 years ago and has since been able to broaden the scope of her clients, which include the Business Times.

“After certification, we started working with much larger companies and our business exponentially increased,” she said. “Within the first year, we were doing almost tenfold what we had been doing prior to certification.”

DeLucia, who was also a former president of the GGBA, says her business benefits from both an LGBTBE certification and a women-owned business certification.

The certification simply helps a business get its foot in the door, she says, and the business must still meet the criteria of large corporate contracts to be able to land the gig.

“Traditionally overlooked populations, overlooked people, overlooked business are now getting a second glance,” deLucia said. “The certification is your calling card, but if your business can’t sustain the work, you still won’t get the job. But the certification is only because for so long, businesses weren’t even considered.”

Is LGBTBE certification right for everyone?

Dawn Ackerman, owns OutSmart Office Solutions, another LGBTE-certified business that offers interior design services for companies. While the certification has helped her own business access clientele, she sees why its not the right fit for every company, especially those that are not B2B or have no desire to work for large corporations.

Another factor to consider: As a company grows, should it purposely keep LGBTQ ownership at 51%?

“The hope for a lot of companies is that you almost outgrow certification,” she said. “If my company is big enough to go after VC funding, what are the chances that my funders who are now going to own part of my company are also LGBT? It’s possible, but not always likely.”

However, Ackerman says she has seen a number of unequivocal successes brought by the program.

“One of our customers, who is also a member of the LGBT Chamber of Commerce in Seattle, is TomboyX,” she said. “I’m so happy to see that those two women got their company not only certified years ago, but have built it to the point where Target is now selling their underwear and bras in Target for their Pride collection. It almost made me cry.”

By William Hicks  –  Assistant Managing Editor, San Francisco Business Times