Author: Keti Mehta, PCC
The nonprofit sector must shine a light on the need to embed diversity, equity and inclusion (DEI) practices within their organizations, to maximize outreach efforts, create healthier workplaces and attract more staff members who are qualified. In most instances, this change starts at the management levels of the organization, including board and senior leadership.
If nonprofit organizations want to truly be sustainable, they need to embed DEI at all levels of the organization to reflect diverse representation and connect authentically with donors, volunteers, employees and constituencies served. Employees want to feel heard, understood and appreciated.
As the National Council of Nonprofits explains, just standing up for equity and justice is not enough. It's imperative that nonprofits "identify how to build the core values of diversity, equity, and inclusion into all... operations, as well as model those values."1
Let's start at the same foundation and define our working understanding of DEI.
Diversity. While "diversity" is most often used in discussions about differences in gender, ethnicity, religion and sexual orientation, diversity encompasses the all qualities that people manifest, including age, size, skin tone, physical and mental abilities, beliefs, language, nationality, socioeconomic status, marital status, education and more.
Equity. Equity exists when all people are treated fairly, justly and equally, without either discrimination or favoritism. "While equality means giving everyone the same resources," writes HR professional Candice Bristow, "equity means giving individual employees the resources and opportunities specific to their needs so that they can reach the same level of success as their colleagues." 2
Inclusion. Inclusion means giving people with diverse backgrounds, experiences and perspectives a voice in making decisions and setting policies that affects them.
Now that we've established what we mean by DEI, let's look at why it matters and how to get there.
Why nonprofits should embrace DEI
Nonprofits should embrace DEI not only because it's the right thing to do. It also improves the workplace. As the nonprofit San Diego Foundation puts it, "Creating a more inclusive work environment for everyone results in stronger team relationships, less conflict in the workplace and higher levels of productivity." 3
Numerous studies show correlation between embracing DEI and positive outcomes, for both nonprofits and for-profit organizations. Here are just a few examples of the research:
- Recruiting. A 2021 survey by CNBC and SurveyMoneky4 found that 78% of 8,233 employed adults surveyed said they want to work for a company that values diversity and inclusion.
- Engagement. Boston Consulting Group (BCG) surveyed approximately 16,000 workers in 16 countries and found a correlation between job satisfaction and inclusiveness: 81% of people who work for a company with an inclusive culture feel happy at work.5
- Revenue. According to a 2021 report by BoardReady, S&P 500 companies with boards that have more gender, age and racial diversity saw greater revenue gains than companies with less diverse boards. While the report doesn't prove causality, the correlation between diversity and performance suggests that organizations with less diverse boards should evaluate the impact of the board's homogeneity.6
Change starts at the top, yet a 2021 report by BoardSource7 found nonprofit boards are overwhelmingly white — 78% of nonprofit board members and 87% of nonprofit CEOs in the organizations included in the report.
So what stands in the way of board diversity? There are a variety of reasons — inertia, lack of commitment, minimal turnover in board membership, not knowing how to tap into the pipeline of diverse talent and not having support in place to help board members succeed.
Fortunately, nonprofit boards can take steps to become more diverse, so they serve their employees and constituencies better.
Embracing the DEI How by starting with the board
Now that we understand the Why of DEI, let's look at the How — tangible steps an organization can take to build a more diverse board that can create a more diverse organization overall.
Step 1: Conduct a diversity audit to identify the composition of your organization. Compare the demographics of your workforce and populations served with the demographics of your board. Then identify the gaps. Once the audit is complete, you can build out an action plan to address the gaps by increasing recruiting efforts.
Step 2: Secure senior leadership commitment and alignment, establishing diversity goals and a scorecard for measuring progress and baking in accountability year over year.
Step 3: Ramp up recruitment efforts to include building relationships with diversity networks and partners to increase the pipeline. Think differently about the role levels being considered, to account for generational diversity.
Step 4: Create a junior advisory council that develops members for future board positions by exposing them to the nonprofit's operations.
Step 5: Institute term limits of two to three years for all board positions to ensure healthy rotation and fresh perspective from new and diverse members.
Gerard Joseph, chief financial officer of Advanced Care Alliance, recommends this approach. He notes that this feeder pipeline of future leaders can be developed by having participants serve on subcommittees that board members lead, thereby fostering learning and increased communication. Such proactive actions also increase transparency and establish thoughtful decision making that includes diverse thoughts, experiences and perspectives.
Step 6: Ensure regular and robust succession planning and recruiting efforts to plan and scale for departing members. Create an alumni network of former serving board members so they stay connected to and included in the agency's continued mission.
Step 7: Ensure for equitable board seat allocations. In some nonprofit organizations, many board positions are "buy or fundraise in." To make your board more diverse, implement the following equitable distribution:
- 50% representing the voice of the communities/populations served, to champion the mission's goals by embracing diversity of thought, experience, style and choice
- 25% individual board members contribution or fund-raiser driven
- 25% corporate-sponsored partnerships (platinum, gold, silver and bronze)
Step 8: Create internal champions by building out DEI goals within the agency. Build a culture of transparency where employees, volunteers and populations served feel connected, included and valued.
Lastly, stay focused on measuring progress and improvements. Strive to foster diverse recruiting sources and networks as well as growing talent from within. Creating traction and meaningful impact means embedding these efforts all year round, into all agency operations, and across all levels. Being transparent about the process allows all to have a stake in driving more sustainable outcomes for the mission.
Gallagher is committed to fostering DEI within the workplace, the insurance industry and the community. Learn how DEI is part of Gallagher's core business.