This blog is part of a series supporting this initiative. Contributors were invited to share their thoughts and experiences on board development and service.
Researchers first noted more than twenty years ago that “governing boards are among the least innovative, least flexible elements of many nonprofits” (Taylor, Chait, & Holland 1996, p. 46). That concern continues today. This is not to suggest that nonprofits no longer need boards. Rather it is a question of how we might rethink boards for greater innovation and community impact. Doing that will require us to consider the role nonprofit boards are supposed to play within both organizations and wider communities — and to question to what extent those aims are being met.
According to the Internal Revenue Service (2008), the nonprofit board should reflect “a broad public interest.” The assumption here is that a nonprofit board would represent the community it serves.
Yet as the population continues to change in our country, we’ve made little progress in reshaping our boardrooms to reflect the changing demographics of our communities. While the non-Hispanic white population in the country is just over 60% (U.S. Census), 84% of all board members are still white, and only 17% of board members are under the age of forty (BoardSource, 2017, p. 10).
Whether it’s diversity of race/ethnicity, age, or socio-economic class, the nonprofit sector can no longer afford to excuse the lack of diversity in boardrooms. “It’s essential that board members understand they put their organizations at risk when they fail to diversify,” argues Arizona State University’s Elizabeth Castillo, “as this lack of cognitive diversity constrains effective decision-making” (Castillo, 2018, para. 8).
Christopher Fredette and Ruth Sessler Bernstein take this point deeper. The voices and experiences around the boardroom table will shape how an organization engages with community, they argue. It’s this increased community engagement that brings “greater familiarity with an organization’s constituents, which allows for a better understanding and incorporation of the needs and interests of diverse and traditionally marginalized community members…who would otherwise remain underserved” (Fredette & Sessler Bernstein, 2019, p. 936).
Board diversity will not come without challenges. As we consider creating greater access to nonprofit boardrooms, we are faced with questions of recruitment practices, meeting accessibility, board meeting structure, changing board roles, and managing conflict in the boardroom that often comes when we have more diverse perspectives in the conversation.
Conflicting opinions in the boardroom need not be avoided. Conflict avoidance can make it “difficult for a board to engage in a critical role and to have thorough debates on strategic issues” (Heemskerk, Heemskerk, & Wats, 2017. p. 251). Working through key strategic issues is a fundamental component of governance.
Take for example the “give, get, or get off” policy that is still held by over 40% of nonprofit organizations, with average annual giving expectations ranging from $1,000 to $5,000 (Larcker, Donatiello, Meehan, & Tayan, 2015). Nonprofits and communities should consider who might be excluded from the boardroom because of such policies. Recognizing that not all potential board members have the capacity to give at high levels or the networks to secure large gifts means that board recruitment must focus on equipping people to engage in meaningful fund development independent of their personal circumstances. Organizations must take on the responsibility of helping new board members expand their networks by engaging in relationships with existing organizational donors.
Recognizing that not all potential board members have the capacity to give at high levels or the networks to secure large gifts means that board recruitment must focus on equipping people to engage in meaningful fund development independent of their personal circumstances.
While nonprofits help board members expand their networks, they must also recognize that social capital in under-represented communities has as much value as that of dominant communities. Fredette, Patricia Bradshaw, and Heather Krause note that more diverse boards require nonprofits “to find a way to speak with people from marginalized communities, support these members through the transition phases of board entry, and authentically engage them in social aspects that build strong relationships” (Fredette, Bradshaw, & Krause, 2016, p. 36S).
The strategic issues facing boards are ever more complex as community needs grow. If the sector is to address complex social issues, organizations can’t do it alone. No one nonprofit has the capacity and social capital alone to effectively resolve issues of homelessness, food insecurity, opioid addiction, or the many issues facing our communities. Meeting these needs requires more intentional collaboration: partnerships that require us to examine the difference between governance and the board.
Many nonprofit scholars, most notably governance specialist David Renz, have pointed out that governance is a function of an organization, or organizations collectively, while a board is simply a structure. Renz (2019) posits that governance is “an essential function in addressing a particular issue or need in our community” which goes beyond “single organizations [that] can no longer appropriately match the scale for the most critical and substantive community issues and problems” (para. 3).
If the sector is going to effectively address the complex social issues in our communities, individual boards must be willing to move beyond simple collaboration and be willing to share power, leadership, and decision making. Individual nonprofits will continue to deliver services and diverse boards play a vital role in that. But organizations must be willing to go one step further to “make strategic, community-level decisions that form the basis from which individual agencies develop and implement their own plans and operations” (Renz, 2018, para. 6).
BoardSource. (2017). Leading with intent: 2017 BoardSource index of nonprofit board practices. Retrieved from https://leadingwithintent.org/
Castillo, E. A. (November 20, 2018). Why are we still struggling with diversity, equity, and inclusion in nonprofit governance? Nonprofit Quarterly. Retrieved from https://nonprofitquarterly.org/why-are-we-still-struggling-with-diversity-equity-and-inclusion-in-nonprofit-governance/
Fredette, C., Bradshaw, P., & Krause, H. (2016). From diversity to inclusion: A multimethod study of diverse governing groups. Nonprofit and Voluntary Sector Quarterly, 45(1_suppl), 28S-51S. https://journals.sagepub.com/doi/full/10.1177/0899764015599456
Fredette, C., & Sessler Bernstein, R. (2019). Ethno-racial diversity on nonprofit boards: A critical mass perspective. Nonprofit and Voluntary Sector Quarterly, 48(5), 931–952. https://journals.sagepub.com/doi/10.1177/0899764019839778
Heemskerk, E. M., Heemskerk, K., & Wats, M. M. (2017). Conflict in the boardroom: A participant observation study of supervisory board dynamics. Journal of Management & Governance, 21(1), 233–263. http://dx.doi.org.ezproxy.gvsu.edu/10.1007/s10997-015-9339-8
Internal Revenue Service. (2008, Feb. 4). Governance and Related Topics – 501(c)(3) Organizations. Retrieved from https://www.irs.gov/pub/irs-tege/governance_practices.pdf
Larcker, D., Donatiello, N. E., Meehan, B., & Tayan, B. (2015, April). 2015 Survey on board of directors of nonprofit organizations. Retrieved from https://www.gsb.stanford.edu/sites/gsb/files/publication-pdf/cgri-survey-nonprofit-board-directors-2015.pdf
Renz, D. O. (2018, January 10). Reframing governance II. Nonprofit Quarterly. Retrieved from https://nonprofitquarterly.org/reframing-governance-2/
Renz, D. O. (2019, January 17). Reframing governance II. Nonprofit Quarterly. Retrieved from https://nonprofitquarterly.org/reframing-governance-2-2/
U.S. Census Bureau. (2020). QuickFacts. Retrieved from https://www.census.gov/quickfacts/fact/table/US/PST045219