In the late Sixties, minority-owned businesses found the most unlikely of friends in Richard Nixon. Nixon, a Republican, motivated by politics and an inner belief made minority business enterprise a part of his 1968 presidential election platform.
On March 5, 1969, Nixon signed Executive Order 11458 establishing the Office of Minority Business Enterprise later renamed as the Minority Business Development Agency (MBDA). Its mission is to promote the growth and competitiveness of minority owned businesses by providing access to consultation, capital, contracts and other opportunities both domestically and abroad.
Despite Nixon’s dubious legacy, he believed that “Black Capitalism” was the best way for minorities to create wealth. In a speech to Congress he stated,
“The best way to fight poverty and to break the vicious circle of dependence and despair which affects too many Americans is by fostering conditions which encourage those who have been so afflicted to play a more self-reliant and independent economic role.”
His commitment to making good on his campaign promise led him to bypass Congress and establish the agency within his first 100 days in office. It did not take long for the program to produce results. In 1972 government contracts to minority owned firms grew from $8 million to $242 million. More importantly Black owned business receipts jumped from $4.5 billion to $7.26 billion. By 1974, two-thirds of the 100 largest black companies had been started during Nixon’s Presidency.
More recently, contracts and capital that have been secured with the aid of MBDA amounted to $5.9 billion of which $4.3 billion originated from the private sector in 2015.
There is little doubt that the government has led the way in helping to create a more diverse workplace but Corporate America has not been far behind. Even before government involvement, Henry Ford in 1913 offered to pay workers a daily wage of $5 (twice the going rate) to work on his assembly lines regardless of their race or country of origin.
According to the Hackett Group, a consulting firm based in Florida, on average supplier diversity programs add $3.6 million to the bottom line for every $1 million in procurement operation costs. A recent report shows that minority-owned business contribute $400 billion to the nation’s economy and over 2.2 million jobs. Mega-retailer Wal-Mart alone spends $1 billion annually with minority and women owned business.
As “The Browning of America” continues, corporations have embraced the fact that their products and supply chains grow stronger and more profitable when diversity is prioritized.
Diversity is not limited to just African-Americans. Minority businesses consists of those companies with 51% ownership by people of color and women. Companies that meet the criteria can be certified by a variety of different organizations both public and private.
I have always struggled with becoming identified as a minority-owned business. It might be the competitor in me that always felt that I could stack up with anyone based on my talent and abilities. I have always been reluctant to pursue the certification because proving to someone that I was black always seemed strange to me. I never wanted the stigma that I felt would be inevitably attached to me by people thinking I was just in the room because of some set aside.
Starting a new business last year that was hungry for leads caused me to reconsider. Before passing judgment, I decided to investigate and learn as much as I could about the organizations and the opportunities they afford. To date, I have been nothing short of impressed.
Ultimately, I decided to pursue two certifications. The public Maryland Department of Transportation MBE and the private National Minority Supplier Development Council. I went to seminars and met with leadership to understand their origins and mission. Both organizations conduct a rigorous certification process where ownership and qualifications are scrutinized in depth. In the early years, the program was rampant with fraud often perpetrated by white males setting up entities in their wives’ names to gain government contracts while they still did all the work.
Now officials fully vet each candidate by conducting in-person, on site interviews and by going through resumes, company books and records with a fine-tooth comb. If you pass the certification process companies can rest assured that you meet all of the criteria and have the ability to compete for business and deliver.
I wasn’t just impressed by the process, I was also impressed by the talent that exists on the certifying boards staffs. In each of my interactions I was met by professional and passionate individuals who take their jobs seriously. In both cases I found their leadership to be seasoned professionals from some of America’s largest corporations or business owners themselves. I’ve met leaders from Southwest, McCormick, AARP and Northrup Grumman just to name a few. Finding qualified MBEs is just as much in the boards interests as it is in the MBE’s. Just like recommending a friend for a job, they want to make sure that their recommendation reflects well on their organization.
Contrary to popular belief getting certified is no guarantee to revenue or business. It is merely an open door to America’s largest companies and government organizations. You still have to put in the work to prove yourself and win business.
For all of the programs’ detractors (of which I was formerly one of them) who cry Affirmative Action or Reverse Discrimination I say take time and learn about the programs and their history. Some of the MBE programs’ greatest gains have been led by Republican presidents and administrations (although Trump tried to kill the program outright by defunding it in 2018. He later rescinded).
As I was going through certification still questioning whether or not it was a good idea, I received validation from the last person I expected it from, my financial advisor John. JT, as he likes to be called is straight from central casting and couldn’t appear to be more WASPy. On a phone call I told him about the process and my reservations about it. Surprisingly he told me he felt America had committed a lot of wrongs in its past denying opportunities to talented people.
“If this helps even the score and you benefit from it more power to you.”
Minorities and women still face obstacles gaining access to those holding the purse strings in America. Organizations like MDOT and NMSDC are only helping make introductions that others have used country clubs and college buddies to do. In our capitalist society there is no free lunch whether you are white or black. You either deliver the goods or you go hungry. Just the way I like it.