LGT's Profit Sense
The board of a nonprofit organization has tremendous responsibilities. Board members should ardently support the organization’s purpose, but zeal is not the only important quality. Diversity among board members is also critical for ensuring the organization can respond to challenges and adapt to changing conditions. In this context, “diversity” can have multiple meanings, such as cultural, economic, social and professional diversity. This article discusses the benefits of a well-rounded board of directors for nonprofit organizations and provides tips on promoting diversity in various forms.
5 Benefits of Board Diversity
A board with a diverse membership can be in the best position to ensure the success of a nonprofit organization and its mission. The specific types of diversity will depend on factors like the organization’s mission, the community it serves and the activities in which it engages to further its mission. The following are potential benefits of a diverse board of directors:
1. Diverse Skill Sets
Board members play crucial roles in supporting an organization’s operations. Boards can often benefit from having members with certain skill sets, such as financial planning and strategy. Giving USA recently reported on declines in philanthropy due to pessimism about the economy among donors. Factors like inflation led to reduced giving throughout the country. A board member with a background in finance can be a significant asset to an organization that is struggling in the current economy.
A board member with human resources experience can help an organization recruit and retain talent. The past few years have seen significant changes in American workplaces. Many nonprofit organizations have struggled to respond to new employee needs and demands. A background in employment issues can help address these concerns.
An organization’s mission and activities will determine what kinds of skills could be useful. Other examples of skill sets might include:
- Law
- Engineering
- Community organizing
- Environmental science
- Education
- Urban planning
- Agriculture
- Information technology
- Cybersecurity
- Logistics.
2. Access to Multiple Networks
A board of directors with diverse professional and social networks can offer substantial benefits to the organization. Board members can communicate the organization’s accomplishments to far wider groups of people than if all the members are part of the same circle.
A broad set of networks can also help attract donors and volunteers. Board members who can broadcast an organization’s work through multiple channels can present it in a variety of contexts that may appeal to a larger set of potential donors.
3. Community Representation
The purpose of many nonprofit organizations is to serve a particular community or group of people. The more an organization’s board reflects the diversity of the community it serves, the better able it will be to meet the community’s needs.
4. Creative Solutions
A wide range of professional, social and cultural backgrounds can promote more creative thinking among board members. One board member may propose ideas that the others might not have considered otherwise. This can help an organization become more responsive and faster to act on issues that require its attention.
5. Avoidance of Stagnation
The dictionary defines “groupthink” as “a pattern of thought” based on “conformity to group values and ethics.” Boards of directors that lack diversity may become too tied to particular ways of doing things. They may be unable to recognize biases in their policies or practices. An organization can stagnate if its board cannot broaden its thinking and adapt to changing conditions.
A related phenomenon involves recruiting new board members from existing networks or circles. Known as the “cloning effect,” this often results in boards that foster groupthink.
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How to Foster a Diverse Board of Directors
The following steps can help nonprofit boards achieve greater diversity:
1. Consider Organizational Needs
The best place to start might be an analysis of an organization’s needs and goals. What needs are currently going unmet? What challenges has an organization been unable to meet? This type of evaluation can help a board identify the kinds of diversity that can be most helpful.
2. Review Expectations of Board Members
How does the organization recruit board members? What does it expect of board members in terms of workload and time commitments? An organization may be excluding many potentially valuable board members who cannot meet its specific requirements.
3. Maintain Community Engagement
If a nonprofit organization serves a particular community, what suggestions do community members have? Continuous engagement with the community can help an organization build the right team and stay on mission.
Learn More About Diversifying Nonprofit Boards
A diverse nonprofit board can be key to an organization’s long-term success. Diversity can come in many forms, including professional experience and group membership. Each organization has a unique set of goals and needs that will determine how best to form a diverse board of directors.
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If you have any questions or would like additional information about anything mentioned, please comment below or email us at askus@lgt-cpa.com.
