Creating more diversity within a nonprofit organization opens the door for expanded insights and ideas and enables the organization to better serve its community. While there hasn’t been much research specifically on the benefits of diversity within the nonprofit sector, studies do show that diversity can enhance decision making and help employees to work harder and more diligently within the private sector. In a study conducted by the Building Movement Project called Race to Lead, the gap within the nonprofit sector was clearly identified. They surveyed over 4,000 people involved in nonprofit organizations and found that the gap in racial diversity is not due to education, lack of aspirations, skills or preparation. “Respondents across race squarely identify the lack of people of color in top leadership roles as a structural problem for the nonprofit sector. They believe that executive recruiters and boards could do more to diversify leadership. Whether due to bias or other factors, respondents of color were more likely than whites to agree it is harder for people of color to fundraise. They also were more likely than whites to see barriers to people of color advancing either because of smaller professional networks and/or the need for more training.”
But what can nonprofits do to ensure more diversity?
Define Strategic Objectives or Priorities that Promote a Culture of Learning
What are the strategic objectives of your organization? Is improved diversity part of your plan? What does diversity mean for your organization? If an organization makes diversity a priority, it should be incorporated in all facets of the organization and include board members, employees, programs and general operations. For example, an organization striving to encourage more diversity in leadership positions could choose to provide mentorship programs. A mentoring program could be structured in a variety of ways; it could be employees at different levels of the organization, from different departments, or different cultural or ethnic backgrounds meeting with the objective to share knowledge and experience with each other.
An organization could also have culture-focused events or provide educational activities that support diversity and understanding of different perspectives. Studies have shown that organizations with more ethnic and racial diversity are 35 percent more likely to do better than others in the same industry, so having these programs will be beneficial to all in the long run.
Establishing Financial Equality Within Your Nonprofit
Establishing financial equality ensures that every employee feels properly compensated and encourages employees to pursue opportunities for growth in the nonprofit. This process begins with properly communicating the philosophy behind your nonprofit’s compensation decisions. Ensuring transparency in the process of granting raises and promotions across all departments keeps employees from feeling they are being compensated unfairly.
Unfortunately, Guidestar’s compensation report for 2017 found that the average compensation for female CEOs of nonprofits ranged anywhere from seven to 21 percent less than their male counterparts. Considering around 72 percent of nonprofits are led by women in the US, the wage gap can have a negative impact on the nonprofit community as a whole. Compensating your CEO fairly, regardless of gender, sets an example for the rest of the organization and demonstrates your core values.
Maternity leave can also have a major impact on how employee benefits are viewed across the board. For example, all genders may need access to time off if they have childcare responsibilities. Changing the wording to parental or family leave or even providing opportunities for flexible leave arrangements will help the organization show that everyone has the same access to benefits.
Checking your own policies around compensation and parental leave reduces the chance that employees will perceive any inequalities or feel they are hindered from obtaining leadership or professional opportunities due to family needs.
Everyone involved in an organization has the ability to bring a unique perspective to shape, inform problem-solving and achieve innovation. Focusing on diversity and challenging assumptions and biases helps an organization unite and achieve its goals. An organization has to be willing to look at itself objectively and ask the hard questions, otherwise, change will not come. For more ways to help your organization thrive in an increasingly challenging environment, download our guide on effective board governance.
Meet the Author
Kristen Guzman, CPA
Aldrich CPAs + Advisors LLP
Kristen Guzman joined the firm in January of 2013. She has over seven years of experience serving a wide variety of clients including nonprofit organizations and non-public companies. Kristen is the leader of the nonprofit niche in Oregon and performs assurance and consulting services. American Institute of Certified Public Accountants member Oregon Society of Certified…
- Nonprofit consulting services
- Agreed-upon procedures
- Certified Public Accountant