Diversity and Nonprofit Boards: Problems and Solutions
Introduction
Nonprofit organizations enable people to work together to address a community’s needs when multiple interests exist without widespread consensus on the best course of action (Ott, Dicke, 2016). Diversity is a quantitative makeup define by the recognition and appreciation of the similarities and differences between individuals identified by gender, race, ethnicity, age, sexual orientation, religion, and physical ability. A nonprofit board is a system implemented to provide community governance, talent, treasure, and time, and functions to harness collective energy of accomplished individuals to the organizations mission and long-term sustainability. The makeup of each nonprofit board depends on the skills the nonprofit needs to accomplish its’ mission, recruitment efforts by executive leadership, and what the community can provide.
Yet, nonprofit organizations around the Nation lack in representing the demographic makeup of the community they serve on their boards and do little to address this systematic issue. (BoardSource, 2017). Women make up less than half of each nonprofit boards and minorities, more specifically African-Americans, only 8%. Reports from Leading with Intent show nonprofit executive team consistently express dissatisfaction with the lack of a diverse board, yet recruitment efforts do not reflect these feelings. According to Carissa Oberlin, “there is a direct link between mission fulfillment and the diversity of leadership and staff for nonprofits….” (Oberlin, 2017) Diversity is a key indicator for a successful nonprofit board serving their community and their ability to adapt to changing demographics in society allows them to increase their deliverables. It is vital for a nonprofit board to represent the community it serves and increasing diversity to deepen the connection with the community is an absolute necessity to closing this gap.
This paper will breakdown the need of diversity on a nonprofit board by looking at a board’s purpose, the demographic representation, board networks, board influences, and board recruitment efforts to ascertain the best approach to rectifying the lack of diversity and how to move forward to benefit the sector.
Board Purpose
According to the National Council of Nonprofits, a boards purpose is to steer the organization towards a sustainable future by adopting sound, ethical, legal governance, and financial management policies that will keep advance the organization's mission. The board is responsible for recruiting new board members through networking and collaborating with community and businesses in order to bring in fresh ideas that will compliment the organizational mission because it is the mission that drives the organization. In addition to providing direction, board members are also responsible for developing a one to two page job description that suits the organization, outline basic responsibilities for the governance implementation and volunteerism which is used when recruiting new members (Jossey-Bass, 2012).
Traditionally, there is a nomination process implemented for nonprofits to vet new board members. These nonprofits look for the best individuals in the community to serve their respective missions in a loyal, ethical, and sustainable manner, but often times lack minority representation. Given the makeup of the area a nonprofit serves, many competent individuals from diverse backgrounds can serve on these boards, but the vast majority of board members are white. If the purpose of a nonprofit board is to bring fresh ideas to strengthen a nonprofits mission, the lack of board diversity nationwide does not lend credence to its intentions.
Demographic representation
The nonprofit sector is large and diverse and made up of small and large organizations (Ott, Dicke, 2016). The vast majority of nonprofit boards are homogeneous in nature and show no signs of changing, even with multiple CEO’s expressing frustration at white-ness of their boards. (Leading with Intent, 2017) Despite the nonprofit sector serving at risk populations and multi-ethnic communities, here is still a problem when it comes to race and gender equity outreach and representation on a board. A 2017 statistical report published by BoardSource stated:
“In 2015, Leading with Intent reported that 89 percent of chief executives and 80 percent of board members were Caucasian, and 25 percent of boards were 100 percent white. In this year’s study, 90 percent of chief executives and 84 percent of board members report as Caucasian (Figure P1). Twenty-seven (27) percent of boards identify as all white”
According to this report, the lack of racial and ethnic representation is a long lasting trend and it increased within two years of this report. Leading with Intent found, “that 65% of chief executives and 41% of board charis report that they are “extremely” or “somewhat” dissatisfied with the level of racial and ethnic diversity on their board.” (Leading with Intent, 2017) At the most fundamental level, individuals serving on a board impacts how it functions, operates effectively, and in its decision making processes.
A board that is homogeneous risks having blind spots that can negatively impact its ability to make the best decisions and plans for the organization (Leading with Intent, 2017). Additionally, the Greenlining Institute (a multiethnic public policy research and advocacy group) provides evidence indicating the need for ethnic diversity on foundation boards in an effort to be responsive to the grant-making needs of our culturally diverse nation, making needs of our culturally diverse nation (Harris, 2014). Harris reported statistics from an Ostrower survey which included more than 5,100 nonprofit organizations and found that 86 percent of her sample board members were white, non-Hispanic; 7 percent were African American; and 3.5 percent were Hispanic/Latino. (Harris, 2014: Ostrower, 2007).
Race & Ethnicity
Chief Executive
Board Chair
Board Member
Caucasian
90%
90%
84%
African American/Black
4%
5%
8%
Asian
2%
2%
3%
American Indian or Alaska Native
< 1%
1%
1%
Native Hawaiian or Pacific Islander
< 1%
< 1%
< 1%
Two or more races
2%
1%
1%
Other
2%
1%
3%
Hispanic or Latino of any race
3%
3%
5%
Not Hispanic or Latino
97%
97%
95%
Gender
Chief Executive
Board Chair
Board Member
Male
28%
58%
52%
Female
72%
42%
48%
Other
0%
< 1%
< 1%
The above graph is a snapshot from the U.S. Census Bureau of the current breakdown of chief executives and board members, reported by the CEO’s of participating organizations.
Board Recruitment
Nonprofit boards often recruit individuals from the community to fill in a talent gap, help with expansion, increase their own advocacy, or bring in more community resources for their organization. (Wallestad, 2017) Over the past 20 years, BoardSource measures the impact of diversity and increase minority representation on nonprofit boards, and found that 14% of individuals were people of color in 1994. Now in 2017, that number has increased to 16%. Nonprofit board of directors need to grow and evolve because boards set directives for organizations change and evolve to match current trends, yet don’t reflect the same direction.
Bernstein and Bilimoria (2012) noted that the full inclusion of racial/ethnic minority group members on boards of trustees remains as elusive goal for many nonprofit organizations. Perez and Murray (2016) mentioned that scholars like Wright Mills (1956) described the po
wer of elites as a cohort of largely Anglo-Saxon Protestants with disproportionate amounts of influence and wealth, centrally located within interlocking networks of government, military, and business. Perez and Murray wrote on corporate ties, advocacy organizations and their boards, but there research touches on some of the issues that nonprofits are facing such as as the lack of race and ethnicity in the corporate board.
Board members influence organizations with a different a variety of background, skills and professional sets to nonprofits. Whether it’s a focus on law, finance, education, economics, an experienced member of the organization, or a specific skillset the nonprofit lacks, these individual assets help further a nonprofit overall effectiveness in the community. (Jaskyte, 2012) The influence provided by a board to furthering the nonprofits network and performance hinges on their ability to connect with key stakeholders in the community and with the clients they serve. A board that practices more diversity and inclusion policies towards recruitment and building influence in the community helps to better assess their effectiveness within a community. (Sessler and Bilimoria, 2013). Since the national average of boards lack in diversity, the influence over the community is not as effective as they could be at expanding to new demographic markets to expand into underserved and underrepresented areas. (Leading with Intent, 2017)
Board Networks
Each board member brings an amount of social capital to exert its influence on their network. According to Putnam, “dense networks in ethnic enclaves…. provide a crucial social and psychological support for less fortunate members of the community…” and joining these networks together by increasing diversity on a boards influence can link nonprofits with great access to resources. (Ott and Dickey, 2016) As mentioned above, recruiting is key to increasing diversity on a nonprofit board. Building a stronger social network is hindered with a board comprised of predominantly white men and rarely travel outside those circles. (Devor, 2015) This issue continues the cycle of factors contributing to the slow rise of increasing network reach by board members. Interestingly, third party support to increasing board networks has increased diversity, but the return is still slow. (Devor, 2015)
Recently, the Public Religion Research Institute (PRRI) found that the core networks of Americans are isolationist in nature, rarely traveling away from their own race, religion, or political affiliation. (Cox, Navarro-Rivera, Jones, 2016) According to the study:
Among white Americans, 91% of people comprising their social networks are also white, while five percent are identified as some other race. Among black Americans, 83% of people in their social networks are composed of people who are also black, while eight percent are white and six percent are some other race. Among Hispanic Americans, approximately two-thirds (64%) of the people who comprise their core social networks are also Hispanic, while nearly 1-in-5 (19%) are white and nine percent are some other race.
Narrowing on these key demographic areas within a nonprofits network allows board members to examine their own effectiveness in recruiting new, diverse board members, but potentially expanding policy changes to emphasize a measurable change in direction towards embracing diversity.
The above graphic from the Dachis Group (2015) shows how current board members utilizing their own network and focusing on areas of diversity can have a direct impact to expand the organization's network – once one more minority group is added to the board, their own network can be utilized through their own connections to expand the reach. If these board members actively recruit outside their own network, it increases the opportunities to tap into otherwise untouched talent. These steps relay the message that the nonprofit is focused on diversity and the network will expand accordingly.
Conclusion
Moving forward, nonprofits have to move away from simply expressing dissatisfaction with the lack of diversity on their board and actively seek to change their vision to opening the doors to more talent and experience. Nonprofits need to have open dialogue about racial issues in their community that lead to better understanding, be able to persuasively and expertly communicate the need for more diversity to better their recruitment efforts, develop meaningful partnerships within the community to facilitate these initiatives, and ensure the board recruitment process and procedures are as inclusive and equitable as possible. According to Leading with Intent, CEO’s attest that diversity is key to understand their organization's external context from a broader perspective, understand the population the organizations serves, and plan effectively. (Wallestad, 2017)
Nonprofits that don’t reflect the demographic community makeup will find difficulties gaining the trust of their clients and stakeholders. The board is the most visible aspect of the nonprofit who engage directly with donors, other nonprofits, represent the mission, and the media to raise awareness and investment within the community. Boards must implement authentic diversity recruitment plans and utilize and expand their own networks to bring measurable diversity to the sectors governing boards. Even though these plans and changes take time, a nonprofit that authentically values diversity and reflects this on their board, shows a commitment to positively changing society as a whole for the better and provides effective community buy-in for a nonprofit.
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