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Not-for-profit organizations

Diversity as a differentiator in the charity and not-for-profit sector

The charity and not-for-profit (CNPO) sectors are changing at a breakneck pace, not just in Canada but around the world. Shifts in demographics, technology, socioeconomics and cultural views are completely redefining how people view charities and NPOs—leaving these organizations but one choice: Change with the times or get left behind.

In a recent Grant Thornton CNPO roundtable, we sat down with CEOs and Executive Directors from a number of Canadian charities and NPOs to understand how this changing world is impacting their organizations. In this series, we explore three of the group’s top challenges—shifting demographics, a growing demand for diversity and emerging technology—and offer pragmatic solutions to help your organization move forward in the face of them.

In our second installment, we explore the need for organizational diversity in these changing times and outline steps CNPOs can take to achieve it.

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Building a strong charity or NPO

Regardless of service, sector or mandate, chances are—if you look closely at any charity or not-for-profit’s list of beneficiaries—you’ll find individuals of different genders, sexual orientations, ethnicities and age groups. And yet, 70 percent of charity boards are comprised of men that are a median age of 61 years[1]—and only 12 percent of board members in Canada’s non-profit sector are visible minorities.[2]

This absence of diversity is problematic on several levels. For one thing, organizations that lack a wide range of skillsets and varied perspectives are ill-equipped to become true leaders in an era of shifting technology, donor sentiments and beneficiary needs. With limited viewpoints, there’s a danger of creating a disconnect between the direction of an organization and the communities it serves, hindering the organization’s ability to operate in a fair and open manner. This, in turn, can reduce public confidence and accountability, which ultimately degrades an organization’s reputation and funding resources.

Understanding these consequences, it’s clear that prioritizing organizational diversity should be the goal of any forward-thinking CNPO. But, as our roundtable attendees agreed, acknowledging the need for diversity and creating a broader and more inclusive environment from the top down are two different things. To succeed at the latter, organizations must address their biases head-on, adjust their governance practices accordingly and implement processes and procedures to ensure diversity trickles down to all corners of the organization.

Battle organizational biases

While it’s definitely not comfortable to admit, everyone has biases—it’s simply human nature. That means, chances are, the leaders of your organization are subconsciously making business decisions, forming opinions and inflicting judgments based on their own potentially flawed perceptions.

Whether they are unknowingly being directed by long-held stereotypes, selective perception, confirmation bias, first impression bias or another type of bias entirely, if left unchecked, it can be incredibly detrimental to your organization.

That’s why the first step in any diversity and inclusion program must be to uncover the biases that are holding your organization back. This involves getting your executive team and board together to speak openly about embedded organizational biases—and uncover ways to address them through diversity training. There are several online tools that can help charities and NPOs guide these difficult conversations and uncover unconscious biases their people or recruits may hold.

Adjust governance practices

Now that you have a starting point, it’s time to become more intentional about diversity. To do this effectively, you need to start at the top—by establishing more diverse governance practices.

In many cases, the lack of diversity on boards stems from the fact that funding remains a pressing need for most CNPOs. To survive, they not only must find ways to fundraise (in the case of charities) or generate revenue (in the case of NPOs), but they also need people to responsibly allocate this money. Understanding this, it makes sense that business people are typically the ones recruited to boards—and given that retired business people are not only familiar with the demands of a board but have more time to volunteer, it’s understandable that the median age of such a board member is often older. 

To overcome this barrier, however, organizations must look past the “way things have always been done” to re-evaluate the role the board plays and identify opportunities to enhance its relevance. For instance, while the financial side of running a CNPO is unquestionably an important one, there are other elements necessary for success, such as the ability to effectively meet the needs of donors or members.

This means individuals who understand the needs and wants of this cohort should be afforded a prominent seat at the boardroom table too. These individuals can be social workers who work “on the ground”, successful graduates of the charity’s program or academics studying an area related to the cause. Whoever you choose, the point should be to elevate your board in some way—and introduce differing (but nevertheless essential) perspectives to the organization.

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This can have a tremendous impact in how your organization operates. If a charity owns a group home in an area where property values have dramatically increased in recent years, for instance, a business-focused board member might suggest selling the property at a premium and re-investing the money to benefit the organization. However, if you have a social worker on the board, they might raise otherwise-overlooked challenges associated with such a decision, such as the inability to rehome residents of the property or the impact such a move might have on their well-being. This alternate viewpoint might encourage the organization to go in a different direction—say, by splitting the lot and renting out the other half, without disrupting existing residents.

Trickle down diversity

With appropriate governance in place, the next step in a diversity program is to create the proper channels, processes and frameworks to ensure diversity trickles down. This will likely require revisiting many long-standing practices, from how you hire staff to how you determine programming needs.

For instance, now may be the time to justify creating a Human Resources department, if you don’t have one already, or evaluating how you recruit new executives. In this context, you may want to consider hiring a recruiting firm and making sure this firm presents you with an even sample of resumes, fairly representing different genders and ethnicities. Additionally, when a board member steps down, it might make sense to forgo the common practice of having them find their own successor—a successor that is often similar to them in many ways—and instead open the position up to a broader variety of candidates. And you may want to be more strategic in grooming future leaders to ensure the pool is representative of all minority groups.

In a similar vein, it will be worth your while to invest time and resources in educating your team on your newfound commitment to diversity—and the importance of maintaining it. By demonstrating a strong tone from the top and showing how your diversity goals coincide with your overall mandate as an organization, you can ensure your workplace is both diverse and inclusive.

Lastly, as your organization evolves, it’s important to implement the proper measures to promote longstanding change. So, if you’re looking to recruit a more diverse board, keep in mind that non-traditional members may not be familiar with the time commitment and expectations associated with the role. To address this challenge, you may opt to implement shorter terms or reduce the time commitment by holding less-frequent meetings.

Making diversity a priority

Prioritizing diversity—and learning to see your organization through a diversity-sensitive lens—is by no means easy. But in today’s changing times, it’s nevertheless necessary. By approaching diversity in a deliberate and conscientious manner, CNPOs can both face the future with confidence and ensure they have what it takes to best serve their employees and beneficiaries.

To learn more about how Grant Thornton can help your charity or NPO use diversity as a differentiator, contact us.