Are councils declining? - minority purchasing councils

Black Enterprise, Nov, 1992 by Jason T. Harris

The July expulsion of the New York/New Jersey Minority Purchasing Council from the National Minority Suppliers Development Council (NMSDC) raises questions about how effective minority purchasing councils are at strengthening minority businesses. Despite its location in New York--headquarters to more large corporations than any other city--the NY/NJ council was in financial disarray, unable to generate corporate contributions.

The NY/NJ council was banned from NMSDC's national network of 44 purchasing councils for failing to meet "minimal standards." The council's annual budget of about $600,000 was so strained that it had fallen behind on its rent and run up other outstanding debts, It was also forced to close its small business incubator program in September because in three years, it could raise only $11,000 from corporate backers to support the project.

Bill Howell, chairman of the NY/NJ council's vendor input committee, blames ousted president William R. Garner for much of the council's ills. Says Howell: "The council was doing more public relations than providing actual business opportunities for members." The decline in the organization's membership from 1,200 to 700 in two years supports his assertion.

With its disaffiliation, the council loses $145,000 in annual funding from NMSDC. However, NMSDC president Harriet R. Michel says, "We are working hand-in-hand with the NY/NJ council in creating a business plan that will help them get back on their feet." At press time, an appeal to reinstate the NY/NJ council was still under review.

Arthur Pisula, the NY/NJ council's acting president, acknowledges that, "We weren't doing enough to introduce minority businesses to financial opportunity." But he says, "The real problem is the financial status of the council."

With NMSDC's help, Pisula hopes to reshape the NY/NJ council in the mold of either the Chicago Regional Purchasing Council or the Carolinas Minority Supplier Development Council. The Chicago council generated $1.8 billion in business for its members in 1991. The Carolinas council was NMSDC's 1991 "National Council of the Year." Both chapters hold trade expos and seminars year-round to increase interaction between minority businesses and corporations.

Michel downplays the possibility that the credibility of purchasing councils will be undermined if the NY/NJ council is not restored: She says simply that no matter what the state of affairs, "We have every intention of holding the corporate community to its commitment to minority business."