Cities are beginning to see the effects of allowing diverse business owners to come in and be a part of their communities.
The city of Los Angeles will be the largest municipality, by both population and economy, to formally include LGBTQ-owned businesses in the city’s billions of dollars in contract procurement. Reports show that similar contracts in LA amount to as much as $8 billion over roughly 40 departments.
The move follows the inclusion for LGBTQ-owned businesses earlier this year in procurement processes for Orlando, Nashville and Baltimore. Nashville became the first city in the south to recognize LGBT-owned business contributions to the city by an executive order of the mayor’s office.
Federal and local governments have long built into contract procurement opportunities for minority-owned and women-owned businesses. Nationally, certified LGBT businesses contribute $1.7 trillion to the U.S. economy and create more than 33,000 jobs, according to the National LGBT Chamber of Commerce (NGLCC). Certified LGBT-owned businesses generate an average revenue of $2,475,642, according to the NGLCC.
“The important point is that we get to open doors and increased opportunity,” said Justin Nelson, co-founder and president of the NGLCC.
Nearby Long Beach, California, was the first city in California to enact a similar LGBTQ-inclusive contract process, and California was the first state to establish a legal precedent. In 2014 an amended version of Assembly Bill No. 1678 waspassed in the California legislature adding LGBTQ-owned businesses to existing legislation covering contracts awarded by the regulated utility industry in the state. The original legislation mandated the utilities to “encourage, recruit, and utilize” businesses owned by minorities, women and disabled veterans. The legislative change to include LGBTQ businesses has led to moves in cities and states around the country in the years since.
The Los Angeles administrative change echoes the California state precedent.
“In the future, Mayor Garcetti or the LA City Council could implement policies to set specific targets or expand resources for citywide supplier diversity initiatives, but for now we are elated to be called out by name as a business community,” said Jonathan Lovitz, senior vice president at the NGLCC.
No city at this point has specific targets, but NGLCC says it is a best practice to set aspiration goals rather than official targets, which can lead to issues of constitutionality.
The LGBTQ communities are job creators, says NGLCC president
Nelson said when cities declare themselves as “open for business” with the LGBT community, it will lead to increased opportunities for these businesses not just in the city but across the country.
“The beautiful thing here is these announcements are a catalyst for businesses in the community to stand up, be recognized and get certified,” said Nelson. “And the benefit of that is not only to potential businesses, but it opens them up to a vast array of corporations across the country that are looking to do business with firms, not despite the fact that they’re LGBT, but because they’re LGBT.”
“Companies now can show that they are also utilizing diverse suppliers to meet requirements that may be a part of their city contract, and they’re also able to show that to other clients that they have a commitment to empowering and utilizing diverse companies just as other major Fortune 500 [companies] do,” Nelson said.
LGBTQ business owners say these changes to the government contract process can change their lives.
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