Report: Improved Board Diversity May Have Positive Effects
A new report from Indiana University’s Lilly Family School of Philanthropy makes the case that certain demographic groups, in particular young adults and women, can help improve nonprofit boards. However, diversity issues continue to be a challenge for boards as a whole.
Could making a board more diverse make it more effective?
That’s an idea that followed through in a new report from Indiana University’s Lilly Family School of Philanthropy at Indiana University–Purdue University Indianapolis (IUPUI), produced with the help of Johnson, Grossnickle and Associates and BoardSource.
But The Impact of Diversity: Understanding How Nonprofit Board Diversity Affects Philanthropy, Leadership, and Board Engagement also makes the case that diversity remains a challenge for many nonprofits. The report found that, overall, boards are generally less diverse than the U.S. population, with 78.6 percent of board members white, compared to a population as a whole that is 76.9 percent white.
Organizations that are older (particularly those founded before 1900) tend to have fewer women and a lower makeup of diversity overall; however, from an income standpoint, boards of nonprofits that have revenues of less than $500,000 tend to have more gender diversity, but less racial diversity, than nonprofits with revenue above that.
“While gender diversity on nonprofit boards is improving, many seem to remain primarily white, older, and have more male than female board members,” the report’s executive summary states.
However, there is evidence that if challenges of diversity are overcome, it could make the board more effective. For example, boards with larger numbers of younger members (particularly under age 39) tend to show higher levels of commitment and are more focused on governance and oversight issues. And boards that have higher percentages of women focus more intently on issues of public policy and also see higher levels of fundraising success.
The report notes that while researchers are not in agreement on the ways that board diversity affects organizational performance overall, individual findings suggest much in the way of potential. Nonetheless, IUPUI Associate Dean for Research and International Programs Una Osili says that the findings offer an opportunity to put a stronger focus on diversity issues.
“As the U.S. population grows more diverse, nonprofit boards have an opportunity to engage members that reflect this diversity in their work,” Osili stated in a news release. “Diverse board members have the capacity to improve the organization’s philanthropic engagement through increased board member participation, fundraising and advocacy.”
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