Are you working with a partner or a supplier?

When sourcing goods and services for your Tier 1 and Tier 2 diversity spending goals, it’s not enough to simply work through a Minority Business Enterprise. Some are true Tier 1 and Tier 2 diversity partners — organizations committed to advancing diversity and building America’s under-represented communities. Unfortunately, others are thinly veiled supplier entities that fit the definition of “diverse” in name only.

How can you tell the difference? How can you know if your diversity spending dollars are actually advancing the cause of diversity and benefiting communities in need?

We’ve identified the six characteristics that distinguish partner from supplier in our industry category. Ask these six questions to find out if you are sourcing goods and services from a diversity partner or merely a shadow-organization supplier.

Question #1: Are they creating American-based jobs?

Creating jobs in targeted communities is the real magic of Tier 1 and Tier 2 diversity spending programs – and is the hallmark of a true diversity partner.

Question #2: Who controls their finances?

Whenever payments flow through lockboxes or take the form of commissions, it’s a clear giveaway that you’re working with a shadow-organization supplier.

Question #3: Do they have tangible assets?

A genuine diversity partner will invest in things that create jobs for those who need them. Beware of organizations whose only assets are the products that “pass through” the entity.

Question #4: Do they own their brands?

Suppliers have no ownership of the brands they represent, but a diversity spending partner will seek to bring proprietary brands to market to build brand equity.

Question #5: Do they give back to the community?

Whereas a supplier is focused on making money and saving buyers money, a diversity partner seeks to create long-term economic prosperity for others.

Question #6: Do they engage in circular relationships?

When working with a true diversity partner, business will flow both ways as the buyer and its sourcing partner find new ways to advance their shared goals.

Putting It All Together

In today’s interconnected world, diversity spend isn’t just another business requirement — it’s a vital step toward fostering inclusivity and equity throughout the community. By embracing the above six characteristics, organizations can empower underrepresented groups, promote innovation and contribute to a more just and balanced society.

We will look at each of these six characteristics in greater depth in the coming weeks. Keep coming back to the Caracal blog to learn more.