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Most Nonprofit Boards Not Diverse or Involved in Fundraising

(Aug. 20, 2007) A study by the Washington, D.C.-based Urban Institute has found that many nonprofit boards are not actively engaged in basic stewardship responsibilities, such as fundraising, and are not diverse or reflective of the populations they serve.

Nonprofit Governance in the United States surveyed nonprofit chief executive officers/executive directors of more than 5,100 nonprofit organizations of different size, type and geographic location. The survey focused on board practices, effectiveness, stewardship, composition and recruitment, and asked respondents to rank their boards’ involvement on a four-point scale ranging from “not at all active” to “very active.”

Just 29 percent of boards were described as “very active” in fundraising, while 35 percent were ranked as “not at all active.” Most respondents rated their boards as doing a “good” or “excellent” job in all areas except fundraising. In fact, more than half (51 percent) rated their boards as doing only a “fair” or “poor” job at fundraising.

Other areas where a significant percentage of respondents ranked their boards’ performance as only fair or poor included:

  • monitoring the board’s own performance (51 percent)
  • educating the public about the organization and its mission (42 percent)
  • community relations (36 percent)
  • planning for the future (30 percent)
  • monitoring programs and services (29 percent)

The survey examined a number of factors to determine which were positively or negatively associated with increased board involvement and performance. Larger boards, gender diversity on the board, funding relationships (greater reliance on private funding) and recruitment criteria were all associated with increased board activity in fundraising. On the other hand, organizational size and having a paid professional executive director were negative factors for board involvement in fundraising.

Board Composition

The study found that, on average, 86 percent of board members are of white, non-Hispanic background, while just 7 percent are African-American or black and 3.5 percent are Hispanic/Latino.

Even more striking, 51 percent of all nonprofit boards are composed solely of white, non-Hispanic members. Just a quarter of respondents said ethnic or racial diversity is a somewhat important for their board composition, and only 10 percent said diversity was very important.

The study found several trends regarding diversity, such as organizational size. Sixty-four percent of nonprofits with budgets under $100,000 have only white, non-Hispanic members, but that figure drops to 31 percent or less for nonprofits with budgets greater than $10 million. In general, nonprofits located in larger metropolitan areas are more racially and ethnically diverse, but even then 45 percent of boards are composed entirely of white, non-Hispanic members. This compares to 66 percent of nonprofit boards outside of larger metro areas.

Nonprofits that serve higher percentages of minorities are far more likely to include members from those minority groups on their boards, but even then many do not. Among nonprofits whose constituents are more than 50 percent black or African-American, only 18 percent include African-American or black trustees. The percentages are even higher for Hispanics/Latinos: among nonprofits whose constituents are over 50 percent Hispanic/Latino, 32 percent have no Hispanic/Latinos on their board.

This is not the case for gender diversity. Ninety-four percent of boards include a woman and, on average, women make up 46 percent of all board members. However, women are more often found on the boards of smaller organizations than larger ones.

About the Survey

Nonprofit Governance in the United States contains a variety of information that fundraisers, managers, executive directors and other nonprofit sector leaders will find useful. The full copy of the report is available on the Urban Institute website.

The survey was conducted in 2005. The survey was sent to a stratified random sample of nonprofits drawn from the Urban Institute’s 2002 NCCS–GuideStar National Nonprofit Research Database of public charities that file an Internal Revenue Service Form 990 (meaning all respondents had at least $25,000 in annual receipts). The institute received 5,115 responses for a response rate of 41 percent.

The mission of the Urban Institute is to promote sound social policy and public debate on national priorities through data gathering, policy research, program evaluation and public education on critical issues and trends.

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