April 16, 2018

Money or Board Diversity: Do We Have to Choose?

Three diverse peopleQ: To diversify our boards, should we expect board members to participate on the same monetary level or make exceptions?   

The answer to this question requires some perspective, history, and strategic thinking. We start with the big perspective.

What’s behind the high interest in diversity?

  • Facts: The U.S. population is growing older, bigger, and more diverse.
  • Studies: BoardSource’s Leading with Intent found that board diversity stagnated or declined since 1994.
  • Experience: Scan the crowd at nonprofit leadership gatherings for diverse ethnicities. You’ll find scattered “visual diversity” that resembles a dot-to-dot worksheet, not an example of pointillism where dots of color blend to reflect our communities.

How Did Nonprofits, in Particular, Get Here?

Follow the money. Do you remember the nonprofit movement that started a decade ago about the great transfer of wealth? The buzz in the field encouraged us to prepare for this unique opportunity.

Now, as predicted, it’s here. MarketWatch (2017) reports, “The U.S. is in the middle of a $30 trillion wealth transfer-from baby boomers to millennials-and will be for the next 30 years.”

Consequences: Intended and Not

To tap the transfer of wealth, nonprofit organizations strategically focused on people with means and encouraged their involvement. Statistically, more white people have this wealth. The University of Chicago’s Center for Public Affairs states, “Racial disparities emerge in intergenerational wealth transfer, with older white Americans being the most likely to receive large monetary gifts or inheritances.”

Following the money creates and continues to generate unintended consequences. One unintended consequence? Our stagnated or reduced board diversity. A second? Nonprofits that don’t reflect the community they serve.

Your Money and Your Life: The Essence of a New Strategy

Since the great wealth transfer is a blip (albeit a long one), what we’re doing now won’t work long-term to generate revenue or create successful organizations. Low diversity threatens your current and future income, it decreases your odds of survival, it increases the risk that you’ll make poor decisions, and it crimps your mission results.

How will we solve this dilemma? We need a new strategy built around tapping today’s extraordinary resources to fuel long term-diversity. The logic is simple, and the execution? Well, that’s the heart of my reader’s question. So let’s return to it.

Q: To diversify our boards, should we expect board members to participate on the same monetary level or make exceptions?   

A: To ensure our future diversity using today’s resources, we refine how we evaluate board member contributions. Instead of just maximizing money, design a measurement system that values contributions to diverse community growth.

The first part of this system is inviting (or requiring–a decision your board needs to make) all members to make an annual cash contribution that matches their abilities.

The second part will require some trial and error. It’s easy to measure the value of a $5,000 gift, and you also want to estimate all that your board members bring to the table. If by participating, your board member helps you by making you 10 percent more diverse during their term (present value) and 35 percent diverse in ten years (future value)–that’s a hefty contribution that could easily exceed another member’s $5,000 gift.

It’s an area that calls for more exploration, but to start to explore some of the board member contributions ideas in Guilty as Charged, Prove Your Board Supports Your Organization.

Let me know how it goes, how I can help, and your other questions.

For more answers, check out this Nonprofit  CEO Library.

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Karen Eber Davis

Karen Eber Davis provides customized advising and coaching around nonprofit strategy and board development. People leaders hire her to bring clarity to sticky situations, break through barriers that seem insurmountable, and align people for better futures. She is the author of 7 Nonprofit Income Streams and Let's Raise Nonprofit Millions Together.


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