Certification Spotlight: LGBTBE Certification 

Many businesses are familiar with the terms “WBE” and “MBE” or at least have heard about Women Business Enterprise certification, Minority Business Enterprise certification and other certification programs, but there is another certification anacronym which is becoming more and more widely recognized: “LGBTBE”, which means the business is certified as LGBTQ2+ owned and controlled.  The “BE” at the end of LGBTBE stands for business enterprise, so the anacronym translates to Lesbian, Gay, Bisexual or Transgender Business Enterprise, however the certification is available to any qualifying business owned and controlled by individuals who identify themselves to be part of the full LGBTQ2+ community and may also be written as LGBTQ2+BE®. Interested in learning more? Let’s dig in… 

While LGBTQ2+ community uses a number of anacronyms and terms to describe itself, in this article we’ll be using the terms “LGBT” or “LGBTQ2+” which are used synonymously by the National Gay and Lesbian Chamber of Commerce (NGLCC), the LGBTBE certifying agency.   

The LGBTQ2+ community is the fastest growing minority segment in the U.S., according to recent census data—and it holds a collective spending power of over $1.4 trillion. When it comes to how consumers who identify as LGBTQ2+ choose to spend their money, CMI reports that: 76% buy from brands that are openly supportive of their community, 54% encourage friends and family to support brands that are openly supportive of their community, and 79% are willing to pay up to 15% more for products when they know a business supports LGBTQIA+ issues. 

Is my business eligible for LGBTBE Certification? 

To qualify as eligible for LGBTBE Certification a business must be at least 51% owned, operated, managed and controlled by a person or persons who identify as part of the LGBTQ2+ community and are either U.S. citizens or lawful permanent residents. 

What does it mean to be 51% LGBTQ2+ owned and controlled? 

The LGBTQ2+BE® certification is modeled onthe standards developed by other national diverse certifying bodies, including the NMSDC (National Minority Supplier Diversity Council) and WBENC (Women’s Business Enterprise National Council).  

To be 51% “owned”, the certification agency looks to who owns the shares of the corporation or membership interest of a limited liability company. The 51% threshold can be met by just one qualifying person or by two or more qualifying persons if their combined ownership equals 51% or more. The qualifying person does not need to own the shares or membership interest directly (in their own name). Trustownership as the majority ownership or businesses who are a subsidiary or affiliate of a parent company can also qualify in some situations.  

The key to establishing the business is 51% “controlled” is showing the certification agency that the business exercises independence from any non-LGBT business enterprise. This means showing the LGBTQ2+ individual, or individuals, who own the business have unrestricted control of the business in any legal document. If the legal documents restrict voting control or give rights to the minority owners, the test will fail (there are some, limited exceptions to this rule).  Frequently, this is where companies slip up. If the documents were not prepared by an attorney with significant experience in representing disadvantaged business enterprises, they may not know the limitations involved to ensure the control element remains intact. Control also requires showing an LGBTQ2+ individual exercises control over the day-to-day operations and holds the highest defined title in the company.  

Who Certifies LGBTQ2+ Businesses? 

The National LGBT Chamber of Commerce, or NGLCC, is the exclusive national third-party certifying body for LGBTQ2+-owned businesses. According to its website, the National LGBT Chamber of Commerce (NGLCC) is the business advocate and direct link between LGBT business owners, corporations and government. As the umbrella organization for 62 state and local lesbian, gay, bisexual and transgender (LGBT) chambers of commerce and business organizations, the NGLCC represents the interests of the more than 1.4 million LGBT owned businesses in the United States. The NGLCC is the only national not-for-profit advocacy organization dedicated to expanding the economic opportunities and advancements of LGBT business community. It is the largest LGBT business development and economic advocacy organization in the world. 

What is the application process for LGBTQ2+BE® certification? 

The first step is to start a business profile at My.NGLCC.org. While there are fees required for the application, these fees are waived if the business is a member of a local affiliate chamber.  

Next up is the supporting documentation. This can be the most time-consuming part of the application process.  Documents include proof of US citizenship or residency, proof LGBTQ Status, information about the business enterprise’s legal formation and structure.  The NGLCC may also ask for documents that show more about the business operations, including financial statements, employee lists/payroll, customer contracts, and third-party agreements. 

Once the application and documentation are complete, the remainder of the process should take about 60 to 90 days. The next step is the site visit with an NGLCC trained site visitor. At the visit, the site visitor will corroborate the information in the application and try to learn more about the business.  

That’s it on the applicant’s end. Once the site visit is complete, the NGLCC’s National Certification Committee will review the application and determine if the criteria is met to certify the business as LGBTBE. If the application is approved, certification as a Certified LGBT Business Enterprise® lasts for two years from the date certification is granted. 

What are the benefits of LGBTBE Certification? 

Like so many other businesses, the past few years have both provided opportunities and challenges for LGBTQ2+ owned businesses. Just like with Minority or Women Business Enterprise Certification, LGBTBE certification can help set your business apart.  

We discuss the benefits of Certification in other articles posted on our blog and on our podcast. For example this article: Is Certification Right for Your Business? – Navigant Law Group, LLC. According to the NGLCC, the LGBTQ2+ Business Enterprise® certification is now in use by over one-third of Fortune 500 and federal, state, and local government supply chains nationwide.  More than 160 corporations, including Wells Fargo, PG&E, Facebook and BART, now recognize certified LGBT-owned businesses as part of their diverse and inclusive supply chains. In 2016, the NGLCC entered into a Memorandum of Understanding with USDA, expanding access to over $13.8 billion in federal contracts for Certified LGBTBE® suppliers. This was preceded by similar MOUs with HUD (2015), Transportation (2014), Labor (2013), SBA (2012), Commerce (2011). LGBTBE certification public sector opportunities are also growing each year. 

Should you have any questions about certification for your business or would like to schedule an initial consultation, please contact Navigant Law Group, LLC at (847) 253-8800 or email us at hello@navigantlaw.com. 

At Navigant Law Group we know the ropes of the legal system. Business services include: Contract Law, Employment Law, Intellectual Property, WBE / MBE / VBE / LGBTBE / DBE certification, Commercial Real Estate, and other general Business Law services. Individual services include Estate Planning, Wills and Trusts, Administration, Probate, and Guardianship. 

Our attorneys’ unparalleled focus on goal-oriented, detailed planning and advice will have you ship shape in no time. Come chart your course with Navigant Law Group, LLC! 

This article constitutes attorney advertising. The material is for informational purposes only and does not constitute legal advice.