The Diversity Crisis: Do Nonprofits Need Quotas?

Look at your board and your leadership team…

How many are men?
How many are over 50?
How many are white?

If the answer is: “most of them” – you are leaving money on the table. Lots of money.

What if I told you that you are missing out on fundraising revenue by not proactively working to have a diverse leadership team? And that you aren’t being as successful or innovative as you could be if you aren’t addressing the lack of diversity on your board?

Let me explain…

Increasingly the for-profit sector has woken up to a simple truth: diversity in leadership is good for the bottom line.  

And yet… A Third Sector analysis study found that in the UK: 88% of CEOs are white and 70% are male. On nonprofit boards, trustees are 92% white and 64% are male. Additionally, in the UK, a pay gap of 16% exists between men and women. In the US a Harris poll commissioned by NYU and the Chronicle of Philanthropy found that: “44% of female nonprofit workers think their organization favours men over equally qualified women for chief leadership positions” and 71% of CEOs from large nonprofits are male. In 2010, BoardSource NonProfit Governance reported that  over 71% of nonprofit board members are over 50.

There is a lot we can learn from the for-profit sector about the value of diversity.

Companies with diverse leadership teams and boards make more money:

That’s right. More diversity means more money. A 2012 Credit Suisse study found that companies with more gender diversity on their boards had higher profits, and outperformed those without. While we have yet to have substantial data from the nonprofit world, the financial benefits of diversity are quite clear.

Companies with diverse leadership teams and boards communicate and problem solve better:  

Think about the last time your nonprofit’s leadership was brought together to create a strategy or solve a problem – how much diversity was in the room? Diversity makes us smarter and makes us work harder. When we are surrounded by people who are different than us, we work harder to communicate and understand one another. The University of Michigan has conducted studies that have shown that a diverse group of people are able to solve problems faster and better than a group of non-diverse subject matter experts.

Companies with diverse leadership teams and boards innovate more:

The Harvard Business Review has found that diversity is a driver of creativity and  innovation. A report by Forbes also reached similar conclusions: “Diversity is a key driver of innovation and is a critical component of being successful on a global scale.” It is easy to understand how people with diverse viewpoints and experiences are better than a more homogeneous group to come up with new ideas.

Think about what is happening at your own charity. Is your organization as innovative as it could be? Does your leadership question the status quo? Do you benefit from the different perspectives and life experiences of your leadership Or… is there a bit of at your nonprofit? Do you need to work on diversity as a driver of success and innovation? How is your bottom line doing?

Whose fault is this? Who can we blame for the lack of diversity? (Not me, surely!)

Why do so many organizations lack diversity? Diversity isn’t a new topic. Why have so many NGOs (and for-profits) made so little progress?

The reason we lack diversity in this leadership is often explained away like this: “I’m not racist, sexist, ableist, homophobic or ageist, and neither is anyone at my organization. We hire and appoint the best – it’s not my fault our board and leadership isn’t more diverse, there just aren’t diverse applicants applying! That isn’t my fault and there’s nothing I can do”.

Here’s the problem with that: the diversity crisis is partially caused by something deep inside our brains: subconscious bias. Simply put, we want to hang out with, love, be around, fundraise with, and hire people who are like us. Take for example this study – where resumes with “African-American” names were 50% less likely to be called for an interview. We don’t mean to do it, but it happens – mainly because it is so easy. Our brains don’t have to work as hard and we can make assumptions more easily. It means less conflict and more harmony.

There is also the problem of the confidence gap: “Evidence shows that women are less self-assured than men – and that to succeed, confidence matters as much as competence”. For example women won’t apply for a job unless they feel 100% qualified – compared to 60% for men.

There are many nuanced reasons why this happens. A powerful mix of societal factors and  human nature have created this complex problem. It won’t reverse itself naturally with good intentions but no concrete plan.

So what do we do?
I won’t pretend to have all of the answers, but here are some ideas to spark conversation:

• Take one or more of Harvard’s implicit bias tests. Have your board and leadership team take the tests. Have an honest conversation about the results and their implications for your organization.
• Cast a wider net when hiring. Are you always posting on the same fundraising job boards? Think about where else you could advertise to reach a more diverse range of candidates.
• Consider blind interviews – where a candidate’s name is removed from their resume, and the first round of interviews is conducted online with no indication of their gender.
• Take inspiration from Norway, and their implementation of a gender quota law that stipulates that 40 percent of public company board members must be of either sex.
• Learn from Salesforce – who recently mandated that all important meetings must contain at least 30% women.
• Offer the same parental leave to male employees as you do to women. Another hat tip to Norway where both parents are encouraged through legislation to take parental leave.
• Appoint someone in every meeting to monitor interruptions. Studies show women get interrupted more than men – and that in most conference meetings men speak more than women.
• … and more. This is a big problem that there is no easy fix for. But we all must make a commitment to address, discuss and act on this issue in the nonprofit sector.

The bottom line…

This isn’t a women’s issue, or a young person’s issue, or a race issue. This is business issue.

As long as we don’t have diversity in leadership we are performing suboptimally.

We owe it to our donors, our causes, and the world to be as successful and innovative as we can be.

Let’s keep the conversation going! Join Rory Green , Helena Sharpstone,  Amanda Seller,  Simone Joyaux, ACFRE, MinstF (Adv Dip),  Julie Verhaar and Laura Croudace for their big room session at the IFC 2015: “Fixing the gender imbalance in leadership” (Produced by Tony Elischer). Future success in fundraising is based on one thing: People. But beyond that we need to recognise the right mix of people; right experience, right skills, right outlook and right levels of equality. This session focuses on why there is a gender imbalance and the ‘missed opportunity’ of redressing this balance while retaining and building on essential skills. Leaders from across the sector will examine what the challenges really are – and what we need to do about it, as organizations and individuals. Essential insights, creative delivery and a very challenging session are all guaranteed.

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This post is part of the 2015 IFC Series. 101fundraising is proud to be the blog partner of the International Fundraising Congress for the 4th year!