Effective board leadership for nonprofits, foundations and charitable organizations requires bold decision-making with a focus on advancing the organization’s mission. “For nonprofits to perform optimally, research and our experience suggest that leadership must represent a broad range of perspectives and expertise,” says Dianne Bailey, national philanthropic strategy executive, Bank of America Private Bank. “Still, many nonprofit boards lack meaningful diversity.”
What’s holding nonprofits back? And what can be done to overcome the structural and cultural barriers to building diverse boards?
Encouragingly, there are a few high-impact strategies for removing obstacles and creating opportunities to diversify your foundation or charitable organization’s governing board, which are explored in detail below.
The impact of diversity on your nonprofit’s board
For starters, there’s no shortage of ways to think about diversity. Some of the traits that typically come to mind are age, race/ethnicity, gender, sexual orientation and socioeconomic status. But we shouldn’t stop there.
Also consider diversity through experiences such as physical ability, marital/parental status, military service, dissimilar points of view or approaches to problem solving. When varied personal characteristics are combined at the board level, research confirms they help organizations and their leadership become more effective in realizing their goals. “And for nonprofits, in particular, having a diverse and inclusive board can strengthen your organization in several important ways,” says Bailey.
- Improves performance. Studies by McKinsey show that companies in the top quartile of gender and racial/ethnic diversity on their executive teams outperform companies in the bottom quartile by 25% and 36%, respectively.1
- Enhances sustainability. Homogenous leadership risks “group think” and may fail to develop a strategy that can meet the demands of the future.
- Addresses funder requirements. Nonprofit funders are starting to reconsider their support for organizations that are slow to diversify their leadership — and responding to any lack of diversity in their own boards with thoughtful plans.
- Amplifies the mission. Nonprofits need boards that include voices from the communities they serve to fully understand, identify and deliver the scope of services needed.