Nonprofit Boards Don’t Resemble Rest of America

February 20, 2018       Andy Segedin      

A first call for help for some, and a last line of defense for others — nonprofits are relied on by individuals and families from all walks of life. That diversity is not, however, reflected atop organizational structures, with nonprofit boards comprised of older and less racially diverse membership than the U.S. population by and large.

Nonprofit boards are 78.6 percent white, 7.5 percent African American, 4.2 percent Latino American, and 2.6 percent Asian American, according to The Impact of Diversity: Understanding How Nonprofit Board Diversity Affects Philanthropy, Leadership, and Board Engagement. It’s a study based on survey responses from 1,597 nonprofit CEOs and 409 board chairs conducted by the Indiana University Lilly Family School of Philanthropy in partnership with Johnson, Grossnickle and Associates and BoardSource. The U.S. population, by comparison is, 76.9 percent white, 13.3 percent African American, 17.8 percent Latino American, and 5.7 percent Asian American, per census data.

Boards also tend to be older than the average population, with 83.1 percent of members age 40 and older as compared 61 percent of the general population. The gap between boards and the real world closes a bit in terms of gender with women representing a 47-percent share of board memberships as compared to 50.8 percent of the general population, but only one subsector — Education at 50.2 percent — has boards in which women make up the majority while Religion trails well behind with boards made up of only 27.9 percent women. International organizations tend to be the most age-inclusive on boards with 23.2 percent of members younger than age of 40 while Health organizations are represented by a sector-low 13.6 percent of board members younger than age of 40.

“As the U.S. population grows more diverse, nonprofit boards have an opportunity to engage members that reflect this diversity in their work,” said Una Osili, Ph.D., associate dean for research and international programs at the Lilly Family School of Philanthropy. “Diverse board members have the capacity to improve the organization’s philanthropic engagement through increased board member participation, fundraising and advocacy.”

The benefits of board diversity do not begin and end at mirroring populations served, according to the report. Organization leaders reported correlations between diversity and engagement, advocacy, and fundraising efforts. Boards with a higher percentage of women, for instance, were graded higher by CEOs for fundraising performance and were more significantly engaged in advocacy activities than male-dominated boards. Similarly, boards with larger portions of members younger than the age of 40 were more likely to enjoy board member involvement, particularly in fundraising where members age 39 and younger were more likely to ask others for donations, have clear fundraising expectations, and provide more potential contacts.

The confluence of racial diversity and board behaviors is a little trickier and not fully explained in the data or case studies that make up the report. Racial diversity, for instance, does not have a strong tie to fundraising engagement overall, though boards with higher percentages of Asian Americans were rated higher by CEOs in fundraising performance. Conversely, boards with a higher percentage of African Americans were rated relatively poor in engagement — a phenomenon driven by boards of larger, older organizations as opposed to smaller and newer ones. It is possible that the long-established culture and status quo of older, more successful organizations creates a challenge for newer members to participate, the report offers, though the data does not provide clear insight.

“It is important to align your board composition with your organization’s mission, values and priorities,” said Angela E. White, senior consultant and CEO of Johnson, Grossnickle and Associates. “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.”

Other highlights from the report included:

  • A correlation exists between the age of an organization and the diversity of its board. Organizations founded between 2000 and 2016 had larger portions of women (52.1 percent), individuals under the age of 40 (20.4 percent), Asian Americans (3.2 percent), and Latino Americans (4.8 percent) than any other group. Organizations founded prior to 1900 trailed across categories except with Latino Americans, where they ranked second with 4.4 percent. Organizations founded between 1975 and 1999 had the largest portion of African American board members at 8 percent;
  • Across subsectors, African Americans were best represented on boards of Education nonprofits (14.2 percent) and least so at International organizations (1 percent). Similarly, Asian Americans appeared most on the boards of Public Service organizations (3.8 percent) and least at Religious organizations (0.9 percent) while Latino Americans were more likely to be represented on the boards of Religious organizations (9.5 percent) and least so among Arts groups (2.7 percent); and,
  • An organization’s annual revenue seemed to tie into the kind of diversity of its associated board. Organizations with less than $500,000 in revenue were the most likely to be comprised of women (50.2 percent) and members under the age of 40 (21.6 percent). Nonprofits with revenues between $500,000 and $999,999 were the most likely to have African American (8 percent) and Asian American (3.1 percent) representation. Nonprofits with revenues of $1 million or more were the most likely to feature Latino Americans on boards at 4.7 percent.
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  • Indiana University Lilly Family School of Philanthropy
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