Supplier diversity programs require a clear, consistent understanding of how vendors are classified. Misapplying diversity designations — or failing to capture eligible certifications — undermines program integrity and limits procurement's ability to report accurately on diversity spend.
Why Classification Matters
Organizations with supplier diversity goals need accurate classification to measure progress, meet reporting requirements, and ensure their spend with diverse suppliers is being captured and credited appropriately. Vendors who qualify but are not properly classified represent missed opportunity on both sides.
Key Diversity Classifications
Minority-Owned Business Enterprise (MBE)
A business that is at least 51% owned, operated, and controlled by one or more members of a recognized minority group. Recognized groups typically include Asian-Pacific Americans, Asian-Indian Americans, African Americans, Hispanic Americans, and Native Americans.
Women-Owned Business Enterprise (WBE)
A business that is at least 51% owned, operated, and controlled by one or more women. Chase Cost Management is certified as a Women-Owned Business.
Small Business Enterprise (SBE)
Defined by the U.S. Small Business Administration based on industry-specific size standards, typically measured by revenue or employee count. SBE status is often a prerequisite for other certifications.
Veteran-Owned Small Business (VOSB) and Service-Disabled Veteran-Owned Small Business (SDVOSB)
A business that is at least 51% owned and controlled by veterans or service-disabled veterans, as recognized by the U.S. Department of Veterans Affairs.
LGBT Business Enterprise (LGBTBE)
A business that is at least 51% owned, operated, and controlled by an LGBT individual or individuals, certified through the National LGBT Chamber of Commerce.
Disability-Owned Business Enterprise (DOBE)
A business that is at least 51% owned, operated, and controlled by a person or persons with disabilities.
Certification Bodies
Certification is typically issued by recognized third-party organizations including the National Minority Supplier Development Council (NMSDC), Women's Business Enterprise National Council (WBENC), the SBA, and the Department of Veterans Affairs, among others.
Best Practice
Procurement teams should actively verify and record supplier diversity certifications as part of the vendor onboarding process, maintain current certification data in the vendor master, and report diversity spend accurately to leadership and external stakeholders.