September 23, 2018
 
Study: Lack of Board Diversity Affects Ability to Raise Funds

March 3, 2018 — Nonprofit board members do not reflect the diversity of the U.S. population as a whole, which affects their ability to raise funds and advocate for their organizations, a recently completed study has concluded.

According to the The Impact of Diversity, a study conducted by the Lilly Family School of Philanthropy, Boardsource, and Johnson, Grossnickle and Associates, "nonprofit boards still have a way to go to match the diversity of the U.S. population."

The study found that only 7.5% of board members were identified as African-American, 4.2% as Hispanic, and 2.6% as Asian. This compares with the overall population in which 13.3% are African-American, 17.8% are Hispanic, and 5.7% are Asian.

In addition, the 83.1% of board members are 40 years of age or older, compared to the nation in which 61% of the population above age 18 are 40 years of age or older.

However, boards come closest to reflecting the overall population in terms of gender composition: 47% of board seats are held by women. By comparison, women make up 50.8% of the total population.

An analysis released last fall found that people of color working at Massachusetts nonprofits overwhelmingly feel that boards of directors, which tend to be dominated by whites, don't support the leadership potential of people of color.

Boards with higher percentages of women tend to be more engaged in overseeing and governance and have higher commitment and involvement, as do boards with higher percentages of members age 39 or younger, according to the analysis.

The study concluded that while there no significant findings between fundraising efforts among boards with higher percentages of people of color overall, but boards that have a higher percentage of Asians were rated higher by their CEOs for their fundraising performance.

Only one organizational characteristic, revenue of the organization, was found to be associated with advocacy engagement. Boards of organizations with revenues of $5 million and greater were significantly more likely to engage with policymakers, monitor the impact of government policy, and provide information on advocacy activities to policymakers.

Also, boards with higher percentages of women tended to be more engaged in advocacy activities.

To address the situation, the study recommended that boards take the following steps:
  • Have a tough conversation. "Ask yourself: Are we realizing our full potential as a board? In what ways are we diverse? How might becoming more diverse increase opportunities for greater mission impact? Discussing diversity can be tough but building the discussion around mission will help to relieve tension and help your board consider how greater diversity can contribute to impact."

  • Define board priorities with regard to board member engagement, fundraising engagement, and advocacy engagement. Understanding board performance in these three areas will help boards recognize where to diversify membership.

  • Recognize that characteristics and diversity intersect. Organizational characteristics and diversity influence each other, creating a complex environment for leveraging change. Some things are impossible to change (the organization’s age, for example), but boards can consider how they influence the work of the board and the context for increased diversity.

  • Foster a culture of continuous learning. Bring in board members and leaders from other organizations to speak to your board about how diversity has affected their board priorities and impact. Review your training and orientation program to prepare all board members for success. Watch for the impact of implicit or unconscious bias on your orientation, training, and board culture.

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