Certify: Building Momentum for Minority Businesses
The National Minority Supplier Development Council (NMSDC) has experienced an incredible period of growth and change over the last two years. The pandemic and the racial reckoning that followed George Floyd’s murder, along with the hard work of the NMSDC network, led to an increased interest in supplier and business diversity. As a result, not only did we avoid a reduction in the number of NMSDC-certified minority business enterprises (MBEs), but NMSDC saw an increase in the number of certified-MBEs in most of the communities we serve.
As this data shows, certifying MBEs is a core pillar of the work that we do. It is one reason why NMSDC has since embarked on a certification modernization initiative aimed at identifying the pain points inherent in our current process and developing solutions to address them.
The Pandemic’s Effect on MBE Revenue
NMSDC and the certified MBEs it serves were not immune to the affects of the pandemic. While Hispanic and Asian-Pacific MBEs saw growth during the pandemic, Asian-Indian, Native American, and Black businesses were hit particularly hard by the disruptions caused by COVID-19 and the ensuing supply chain disruptions. These communities saw significant decreases in revenue between 2020 and 2021.
Fortunately, moving into 2022, NMSDC has a set an ambitious goal of $1 trillion in certified MBE revenue generation aimed at addressing these decreases and accelerating growth for all the communities we serve and is exploring targeted approaches to help the most affected communities reverse this disturbing trend.
Develop: Programming Through the Pandemic
Another challenge of the last two years has been adapting our programming to fit the changing nature of society. For example, we had to move many of our programs online as in-person events and meetings were not a safe option until 2022. With the exception of Matchmaker events, (which have since rebounded) we are happy to report that from an event perspective that transition went relatively smoothly and enabled us to maintain stable enrollment in these activities in 2020 and 2021.
It’s also worth highlighting that our Emerging Young Entrepreneurs (EYE), Chase for Business Advancing Black Entrepreneurs, and The NMSDC Centers of Excellence (COE) programs all saw significant growth from 2020 to 2021, showing positive signs for the future of MBEs in the supply chain.
Connect: Corporate Awakening Around Racial Equity
The murder of George Floyd sparked a racial reckoning in this country that was felt by every member of our society, including the corporate business community. This increased recognition of the need to address racial inequity led to unprecedented and concrete action from this community and, for many companies, NMSDC membership and support was a primary way to take that action. NMSDC corporate members increased by over 200, with sponsorships and donations from our corporate members also increasing dramatically over this period. The key going forward will be ensuring this moment turns into a movement and that corporations continue to support NMSDC’s efforts to create greater racial equity and accelerate MBE growth in the face of dynamic social and economic conditions.
Fiscal Year 2020 and 2021 Financials
Thanks in part to the increased interest the corporate business community showed in NMSDC’s work, NMSDC was able to maintain strong fiscal health despite the aforementioned economic disruptions that affected so many in the United States. While still strongly reliant on membership dues in 2021 (61% of organizational revenue) NMSDC was able to increase our revenue in several areas including grants and other income.
The growth of NMSDC in other areas led to increased revenue for the organization, with an increase of $6 million from 2020 to 2021. Of course, as part of this increased interest and need, expenses also rose to better help the organization step up its efforts to accelerate MBE growth and grow wealth for communities of color. Fortunately, expenses only rose a little over $3.2 million, leaving the organization in very strong financial health at the end of 2021.
For additional details regarding our financials, please see the following audited financial statements for 2020 and 2021.
Looking Forward
A lot has happened since the data in this report was collected including a number of new faces joining the NMSDC team. Fortunately, they’ve all hit the grown running. As mentioned earlier, NMSDC has embarked on an ambitious march to $1 trillion in annual revenue for certified MBEs. And we have taken several concrete steps to make this a reality.
Towards the end of 2021, we embarked on an organizational redesign initiative aimed at creating a nimbler and more effective NMSDC capable of accelerating MBE growth and creating long lasting, generational wealth for the communities we serve. We will work diligently to ensure the entire NMSDC network is involved in the process, especially our 23 regional affiliate councils.
In addition, we know that building the future NMSDC will require upgrading our technology capacity. As 2022 began, we kicked off the process of replacing our enterprise tech stack (15 separate systems) with a consolidated, integrated state of the art solution, as well as integrating the 23 certification environments into ONE enterprise solution.
Furthermore, going forward we must work across all sectors of societies to increase MBE opportunities to capital and contracting opportunities. Its why, despite not being featured in the numbers of the 2020/2021 annual report, advocacy is another core pillar of NMSDC’s work. We will continue to take steps to create a more favorable policy environment for MBEs through efforts like advocating for a federal MBE designation to increasing MBE access to the federal contracting opportunities available as part of the Bipartisan Infrastructure Law.
To amplify these efforts, NMSDC will continue to build its brand and position itself as the premier thought leader in business diversity. We have embarked on several initiatives aimed at accomplishing this as we moved into 2022. These activities include the rebuild of NMSDC’s Marketing and Communications department, a robust website redesign, and expanded efforts to create meaningful, long-lasting relationships with key media outlets that have already led to placements in several prominent publications including the New York Times and Forbes.
Finally, 2022 is the 50th Anniversary of NMSDC. As part of this anniversary, we took a hard look at what the mission of the organization is, and that mission is to accelerate growth for MBEs so that we can create generational wealth in systematically excluded communities of color. We must eliminate the racial wealth gap that has persisted for over 300 years and that unfortunately increased during the pandemic. Minority business owners are at the center of everything we have done, are doing, and will be doing. We must continue to dedicate ourselves to growing and scaling these businesses. Whether that’s increasing corporate member spend with these organizations or building one NMSDC capable of supporting their development, everything we do in the coming years should be centered on their advancement and increasing their share of the U.S. and global economy.
I encourage the entire network, including our corporate members, MBEs, and regional affiliate councils, to keep this in mind as we embark upon not only the next year, but the next 50 years, of MBE growth and the creation of generational wealth for communities of color across the United States. Our vision is strongest when it is unified towards a common goal.
Ying McGuire
CEO and President
NMSDC
