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The Impact of Diversity on Board Outcomes

Posted by Angela E. White on Mar 4, 2020 12:50:38 PM

diversity on board outcomesThis post was written by one of the many nonprofit leaders who will be presenting at the 2020 BoardSource Leadership Forum May 7-8 in St. Louis. We hope to see you there!

When I first became a consultant nearly 24 years ago, we had a client who was creating a list of potential leadership gift donors, and the list of 30 names was comprised solely of white males. When asked about diversifying the list, the board chair reviewed the list one more time and announced, “Well, we made a good faith effort, but there just aren’t any women or minorities to add to the list!” Mind you, this was in a metropolitan area with a population of more than one million.

I wish that I could say that things have changed dramatically in the last 24 years, but they haven’t. Maybe that’s not entirely true — there has been change and growing awareness of the benefit of diverse thought and the lens by which we view situations. However, I still find that nonprofits struggle to create a diverse list of potential board members, donors, job candidates, etc.

The increasing diversity of the U.S. population gives the nonprofit sector an unparalleled opportunity to engage new audiences, bring new voices to the table, and involve new talent and leadership. As a sector that focuses on the public good, inclusion of diverse individuals can deepen an understanding of issues communities are facing and create the right environment for problem solving in an authentic manner. Ultimately, this is about mission impact, which is the reason nonprofits exist.

It is important to align your board composition with your organization’s mission, values, and priorities. Nonprofits should be careful to avoid seeking diversity just for the sake of diversity as this can lead to tokenism. However, if boards clearly define their priorities and foster a culture of continuous learning, greater diversity will lead to a more engaged board.

Recent research conducted by Johnson, Grossnickle and Associates; BoardSource; and the Indiana University Lilly Family School of Philanthropy sought to add to the discussion of board diversity by examining the current landscape of diversity on nonprofit boards and by understanding the relationship between board diversity, organizational characteristics, and board efficiency. The goal of the research was to examine the relationship between board diversity and board outcomes, which we assessed by looking at engagement, fundraising, and policy advocacy.

The study found that an organization’s area of focus — or its subsector within the nonprofit universe — correlates with board diversity. For example, nonprofits that focus on education appear to have higher percentages of black board members, while nonprofits that focus on environmental/animal causes or international causes tend to have lower percentages of black board members. Internationally focused nonprofits tend to have a higher percentage of younger board members. Finally, religious organizations have significantly fewer women on their boards compared to any other subsector, but they tend to have higher percentages of Hispanic board members.

Yet what is the impact of a board’s makeup have on board outcomes? The research found several trends:

  • Nonprofit boards with more women members are more involved, engage more in fundraising, and participate more in public policy advocacy. Their CEOs also rate these boards’ fundraising performance higher.
  • Boards with higher percentages of young members (age 39 or younger) have greater commitment and involvement and engage more in oversight and governance. This is also true of boards with higher percentages of women members.
  • Older organizations have significantly higher percentages of board members who meet with potential donors and ask others for money and to contribute financial gifts. These boards also are more likely to be rated by their CEOs as being highly involved.
  • Boards of nonprofits with revenues of $5 million or greater are more likely to participate in advocacy. Their members are more likely to engage with policy makers, to provide them with information on policy activities and to monitor the impact of government policy.

Please join me and my research colleagues at BLF2020 for our session entitled Embracing the Growing Importance of Board Diversity: Philanthropy, Leadership and Board Engagement. We’ll continue this discussion on the impact of a diverse board on board outcomes and whether diverse boards are more engaged, raise more money, and if members of diverse boards are stronger advocates. You can join in a conversation to help the nonprofit sector better understand its relationship with diversity and how diversity can affect a board’s ability to help an organization achieve its goals.

Topics: Board Diversity & Inclusivity

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