Nonprofit Boards Remain Predominantly White. Do Funders Care?

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A quick look at the demographics of nonprofit boards reveals a landscape in dire need of change. The majority of nonprofits serve populations of color, at least in part, but a full 78% of nonprofit board members are white — and 22% of organizations say that they don’t have a single person of color sitting on their board, according to BoardSource’s 2021 “Leading With Intent” report.

Despite greater awareness of the need for DEI since the 2020 police murder of George Floyd, there has been scant progress on this issue in the years that my colleague Ade Adenjii has been covering it. In 2024, just like at the Oscars of nine years ago, nonprofit board membership in the U.S. can be summed up by a hashtag: #BoardsSoWhite. 

But do funders care? In other words, are funders rewarding diverse nonprofit governance, and could a lack of racial diversity on a nonprofit’s board (particularly among nonprofits that serve communities of color) risk turning off socially conscious funders? There’s very little available evidence on this last point, but there are some indications that the answer could be a very qualified “yes,” even despite the ongoing backlash to DEI and potential chilling effect of last year’s anti-affirmative action Supreme Court decision.

A matchmaker and more

The New Philanthropists, an Austin, Texas-based nonprofit that acts as a local matchmaker between nonprofits looking to diversify and people of color looking to serve, is one organization working to change the status quo on nonprofit board diversity, both in its local area and more broadly.

Founded in 2017, The New Philanthropists provides a range of services to prepare the ground for both nonprofits looking to diversify their boards and individuals pursuing nonprofit board membership. TNP’s offerings include a board assessment program, a year-long, in-depth nonprofit board diversity process, and a series of workshops that are available to both current and potential board members. The nonprofit’s Board Mentors of Color effort and its Board Matching Program are limited to the Austin area. 

TNP puts a lot of effort into ensuring that its matches will work. “We know that there are consultants out there that are doing amazing work with just nonprofits,” said TNP Executive Director Paulina Artieda. “We know that there's board matching services and forums, and that there's leadership development and training in this space. However, I think having a comprehensive approach is what's really made [TNP’s work] a success.” 

That success has played out on multiple levels for TNP and for participants in its programs. For instance, TNP had more than 200 mentees and over 40 mentors participate in its Mentors of Color program alone since 2019. At least one of those mentees, Kimberly Holiday, credits TNP with her decision to run to become the first Black city council member in Pflugerville, Texas. The organization itself is modest, but it has also been growing. The New Philanthropists reported net assets of $369,000 in 2022 — an increase of roughly 50% from the organization’s bottom line at the beginning of the year.

“Pay to play”

TNP’s website includes a handy timeline tracing the history of systemic racism and its impact on the nonprofit sector and nonprofit sector boards. But even given today’s greater consciousness of these issues, there are several challenges standing in the way of nonprofits seeking to diversify their board leadership. 

“When we think about board membership historically, it’s very much been a wealth circle, right?” Artieda said. “The idea that you have to pay to play has been a huge barrier, because a lot of these wealth circles have been big funders of those organizations.” 

Given this fact and that so many boards recruit new members from their own social circles, it's easy to see how one generation of wealthy, white board members begets the next. Beyond habit, though, changing the “give and get” model of board membership can be a scary thing for budget-conscious nonprofits. In addition to working with potential individual leaders of color to help them negotiate board dues, Artieda said, TNP works to educate nonprofits about the value of cultural currency, “because at the end of the day, it goes back to serving their community better, right?” 

It’s an obvious point, but serving communities better certainly seems like a tougher lift when a nonprofit’s leadership has no lived experience of the challenges facing the community it’s attempting to serve.

Beyond supporting individual would-be board members of color in navigating the “pay to play” mentality, TNP’s mentorship program pairs people interested in service with experienced nonprofit board leaders to learn the ins and outs of being on a board. Additionally, Artieda said, the program provides a safe space to discuss specific issues that new nonprofit board members of color face, including dealing with microaggressions and instances of unconscious bias that may come up, particularly on a board that is new to the DEI journey. 

Nonprofit board diversity and nonprofits’ bottom lines

Despite the broader, ongoing backlash against DEI, philanthropy as a sector has been inching closer to valuing and rewarding diversity. Artieda believes that foundations and other funders understand the importance of representation on nonprofit boards and are starting to ask about it. But even she admits that “it’s a real question” whether or not funders are actually holding nonprofits accountable on this front. 

My own reporting on this question revealed mixed results. The Council on Foundations and organizations like the National Council of Nonprofits “encourage both foundations and their nonprofit partners to recruit, cultivate and support diverse board members,” said Council on Foundations President and CEO Kathleen Enright in an email. Enright further noted that funders are working to diversify their own boards, citing a 2021 report showing that environmental nonprofits and boards added an average of three diverse board members between 2017 and 2021. More recently, though, IP’s Michael Kavate reported that board diversity among green funders has declined slightly.

Meanwhile, sector leaders like John Palfrey, president of the MacArthur Foundation, have made it clear that DEI is part of their funding values. "If an organization we've been funding for many years has not diversified or has not been acting in an inclusive way, at a certain point, we're not going to keep giving them general operating support indefinitely,” he said during our conversation for IP’s October profile. Those weren’t empty words. In 2020, MacArthur released a demographic report of its then-grantees and vowed to support “a more diverse set of organizations and individuals in the years ahead.”

At the same time, it’s also clear that the current climate has at least some people frightened. A national philanthropy-serving organization that responded to my questions, but asked to remain anonymous, told me that its funders ask about the demographic breakdown of its board “somewhat often” during either the application or reporting process. Given the current legal environment, it could be harder than ever to get a firm idea of how many funders are considering nonprofits’ board diversity as part of their grantmaking.

That very resistance to racial equity, though, is one reason why such efforts are more important than ever. When I asked her what it’s like for TNP to operate in Texas, Artieda said that the environment in her state “makes this work more crucial. I think it makes this work more momentous. I think there's a fire underneath us and in our community that wants to see this work come through, because more than ever we need new leaders.” 

We can only hope that the brave public stance of this nonprofit, with less than a half-million dollars in assets, will inspire those with vastly more means and ability to stay the course on equity. It seems inevitable that long-term demographic shifts will propel changes to what the leadership and priorities of the nonprofit sector look like, one way or another. The success of programs like TNP’s, and the courage of funders like MacArthur, may well determine just how easy or difficult those transitions will be.