Blog / DEI & Inclusive Growth

Advancing Nonprofit Diversity: A Call to Action for Funders and Nonprofits

by Juan Olivarez
Advancing Nonprofit Diversity: A Call to Action for Funders and Nonprofits
This post was originally published on the Center for Effective Philanthropy’s blog. The original post can be viewed here.

CEP’s recent report, Nonprofit Diversity Efforts: Current Practices and the Role of Foundations, provides funders valuable input on what they can do to lead the way in helping nonprofits make greater improvements in diversifying their boards and staff.

Reading the report, two significant findings from the study caught my attention. The first was continued evidence that funders need to advance their efforts to assist nonprofits in diversifying their boards and staff. The second was that nonprofit boards and CEOs need to place a higher priority on diversifying their organizations.

Takeaways for Funders

According to the nonprofit CEOs on CEP’s Grantee Voice panel who were surveyed for the study, 42 percent report that their funders have not discussed diversity issues with them. Should this indicate to the field that many funders do not hold diversity as a high priority?

The report indicates that, indeed, funders do collect a lot of demographic data about who their grantees seek to serve, their grantees’ organizational staffing, and their board membership. However, only 21 percent of the respondents report that their funders explain how they use the demographic information they collect. This is a clear opportunity; funders and nonprofits could better work together to share information and strategies around improving representation in the field.

Fund The People also provides an important resource for funders interested in supporting nonprofit workforce diversity. Their toolkit, “Invest in Equity Inside the Nonprofit Workforce,” outlines numerous instances when the lack of investment in nonprofit professionals has diminished the equity and inclusiveness of the nonprofit workforce.

Funders can positively change this narrative and end the deficit of human capital investment in the nonprofit workforce. They are capable of providing incentives, resources, and skills to build teams that reflect, understand, and represent our diverse communities. Their attention to this is imperative.

Takeaways for Nonprofit CEOs

CEP’s survey not only identifies takeaways for funders, but also for nonprofits.

For instance, the nonprofit CEOs surveyed place a high level of importance on having a diverse workforce in order to achieve their goals and reflect the communities they serve. However, the respondents express a low level of achievement in both categories.

The report indicates that 64 percent of nonprofit CEOs believe that, in order to achieve their organization’s goals, it is very or extremely important for their board to be diverse. However, only 22 percent believe their board is actually very or extremely diverse. And while 61 percent of nonprofit CEOs believe that, in order to achieve their organization’s goals, it is very or extremely important for their board to reflect those they seek to serve, only 26 percent believe their boards actually reflect those populations very or extremely well.

This gap is glaring, and the CEP report provides more evidence that we have a long way to go with nonprofits making diversity a priority.

On the positive side, it is good news that nonprofit CEOs recognize the importance of having a diverse workforce. The first step in any improvement process is to recognize and accept the current situation. It is obvious from the study that many would like to see improvement in this area.

Diversifying the Nonprofit Sector: A Constant Struggle

For decades, the nonprofit sector has struggled to diversify its workforce and boards. Evidence of this has been documented in many reports from organizations like D5 Coalition, Community Wealth Partners, BoardSource, the Annie E. Casey Foundation, ProInspire, Independent Sector, and others.

Nonprofit CEOs and boards have pointed to many realities (and excuses) for not making more headway in the past 25 years. We still see that only one out of 10 nonprofit leaders is a person of color, according to BoardSource’s 2017 Leading With Intent report.

Who leads and makes decisions at nonprofits makes a difference. BoardSource finds that only 25 percent of executives and board chairs they surveyed place a “high priority” on demographics in the recruitment of talent. This is consistent with CEP’s current findings.

These findings are quite surprising since research in many sectors has revealed that diversity is an asset within an organization. Fresh ideas and perspectives, better productivity, broader language skills, better connection to community, increased problem solving, and innovation are among the various benefits of diversity that have been noted in both the for-profit and nonprofit sectors. The case for diversity has been made time and time again.

Fortunately, we are witnessing a call to action like never before.

Numerous national and local efforts are currently underway that are addressing talent pipeline issues for the nonprofit sector, including initiatives for identifying and developing diverse candidates for leadership positions. These efforts, of course, usually require funding.

Increased Strategic Funding: One Way to Spur Change

Nonprofit organizations have a responsibility to make improvements on this front. But, as CEP’s report indicates, they cannot do this alone, as most do not have the resources.

In the report, nonprofit CEOs point out what nonprofit funders could do to be most helpful in assisting nonprofit organizations’ efforts to diversify their boards and workforce. For instance, funders could provide monetary assistance (27 percent of nonprofit CEOs say this would be most helpful), which could help offset the many costs associated with the recruitment and retention of diverse staff. Funders could also provide nonmonetary assistance (32 percent of nonprofit CEOs say this would be most helpful), which could go towards identifying best hiring practices and recruiting board members.

A 2018 study from the Center for Public and Nonprofit Leadership at Georgetown University (CPNL) , findings from which CEP includes in its report, examined efforts to diversify the nonprofit sector’s workforce. This study notes some challenges in this endeavor:

  • On the internal side, CPNL points to historic organizational practices, lack of board commitment, and balancing internal racial equity work.
  • On the external side, CPNL points to a lack of funding, difficulty finding trainings or technical assistance, and limited access to diverse recruiting networks.

This information, as well as other data, can assist funders in identifying broader initiatives to fund that may have exponential results across many organizations.

Funders and Nonprofits Must Work Together to Advance Diversity

Perhaps the biggest takeaway from the CEP report for funders and nonprofit CEOs alike is that both have a critical role to play in advancing diversity efforts in the nonprofit sector. Organizations must be ready for the inclusion of a diverse workforce, and funders should set expectations for transformational change among the nonprofits they support.

Both funders and nonprofit CEOs are encouraged to hold diversity in the boardroom and workforce as a bolder commitment, and CEP’s report should be used for continued conversations and action.

Looking ahead, I would like to see a similar survey conducted with CEOs of foundations to compare and contrast perspectives on demographic data needs, the use of data, how nonprofits can help funders with effective grantmaking, and how the entire philanthropic sector can better support the recruitment and retention of a diverse workforce and board culture.

Juan R. Olivarez, Ph.D.
Juan R. Olivarez, Ph.D.
Distinguished Scholar in Residence for Diversity, Equity, and Inclusion (2018–2021)
Throughout his career, Juan Olivarez has been a passionate champion for equity and inclusion. He was the first Hispanic president of any college or university in the state of Michigan, serving as the eighth president of Grand Rapids Community College...