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Exploring what has led to the racial leadership gap within the nonprofit sector

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Exploring what has led to the racial leadership gap within the nonprofit sector

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Content Exploring What Has Led to the Racial
Leadership Gap Within the Nonprofit
Sector
by
Schyler Ector
A Thesis Presented to the
FACULTY OF THE USC ANNENBERG SCHOOL
OF COMMUNICATION AND JOURNALISM
UNIVERSITY OF SOUTHERN CALIFORNIA
In Partial Fulfillment of the
Requirements for the Degree
MASTER OF ARTS
STRATEGIC PUBLIC RELATIONS
August 2020
Copyright 2020 Schyler Ector
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Table of Contents

List of Figures .............................................................................................................................................. iii
Abstract ......................................................................................................................................................... v
Chapter 1: Why Representation Matters and What the Nonprofit Sector Is Doing About It ............. 1
What Role Do Nonprofits Play?...................................................................................................1
Uncovering the Facts ............................................................................................................... 3
Chapter 2: Reading the Room: Understanding the Perception of Nonprofit Leadership .................. 11
Chapter 3: The Primary Duties of the Board and How Negligence Leads to Overall Disparity ....... 22
The Duty of Care .................................................................................................................... 22
The Duty of Loyalty ............................................................................................................... 25
The Duty of Obedience ......................................................................................................... 28
Money Matters: A Board’s Contribution .............................................................................. 32
Chapter 4: There Is A Disconnect: The Generational Gap and the Development Deficit ................ 38
Tension Amongst Generations ............................................................................................. 38
Connection to the Racial Leadership Gap ............................................................................ 40
Succession Planning ............................................................................................................... 42
Shared Leadership................................................................................................................... 44
Chapter 5: Building Capacity Toward an Equitable Future ................................................................... 48
Collaboration........................................................................................................................... 49
Becoming Data-Driven .......................................................................................................... 51
Volunteers Are Useful Assets ................................................................................................ 53
Equity Is the Next Step .......................................................................................................... 55
Bibliography ................................................................................................................................................ 56

iii

List of Figures

Figure 1: Chart showing the varying degree levels obtained by participants of the Race to Lead
study.……………………………………………………………………………………………….4

Figure 2: Graph showing the position levels of people of color and white respondents of the
study………………………………………………………………………………………………..4

Figure 3: Chart showing the percentage of participants that would choose to obtain leadership
positions……………………………………………………………………………………………5

Figure 4: Graph showing the opinions held by people of color and white respondents of the Race
to Lead study regarding leadership practices and diversity within the sector……………………..7

Figure 5: Graph showing the Race to Lead respondents’ attitudes toward nonprofit workloads,
social networks, salaries, etc………………………………………………………………………8

Figure 6: Tweet published in 2013 by Leadership Learning……………………………………..12

Figure 7: Tweet published in 2014 by Business Volunteers Unlimited………………………….13

Figure 8: Tweet published in 2015 by Dan Pallotta……………………………………………...15

Figure 9: Tweet published in 2016 by Nevada Statewide Charter School Authorizer…………..17

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Figure 10: Tweet published by Tiffani Bell in 2017……………………………………………..19

Figure 11: Chart illustrating the corruptions perception index of the United States…………….24

Figure 12: Flow Chart showing how a majority white staff perpetuates homogenous groups in
leadership through similar social networks………………………………………………………26

Figure 13: Graphic illustrating the most important board director behaviors……………………29

Figure 14: Flow chart illustrating the manifestation and relationship between the generational
leadership gap and the racial leadership gap at nonprofit organizations…………………………40

Figure 15: Graph showing the percentage of costs an organization might incur due to high
turnover rates……………………………………………………………………………………..43

Figure 16: Spectrum of Shared Leadership ranging from one leader to many leaders at an
organization………………………………………………………………………………………45

v
Abstract
The nonprofit sector is often seen as the prototype for establishing ethics in society.
Individuals and corporations seek nonprofit partnerships and resources in order to thrive in ways
they normally would not be able to do, but when the nonprofit sector is lacking in essential
functions these offerings are not beneficial and the nonprofit sector fails to serve as an entity
providing checks and balances to the overall flow of this capitalist civilization.
An essential function that has been highlighted in recent years is the racial leadership gap
and constituents of the social sector believe that people of color are barred from leadership
positions on purpose. By exploring what has led to the racial leadership gap at nonprofit
organizations it will be revealed that this disparity is not, in fact, systematic; the racial leadership
gap is the product of implicit bias brought upon by an older generation of leaders occupying the
board and executive spots at organizations.
After examining the factors that contribute to the racial leadership gap a chance at
dismantling inequalities manifests and the opportunity for diversity unfolds which benefits
society’s most susceptible groups and grants people of color the opportunity to integrate as
leaders of change. This paper will discover all of the ways that the nonprofit sector can fix their
diversity problem while filling supplementary gaps along the way.
1
Why Representation Matters and The Work That Still Needs to Be
Done
Representation has become a hot-button issue in the past few years. Most of society can
agree and proudly state that representation matters, but also can identify where there are gaps in
the system. While there is a lot of attention devoted toward implementing an arrangement that
ensures appropriate advocacy for people of color, not every industry is successfully contributing
to the maturation of underrepresented groups. There are still spaces that do not effectively keep
order in the world because some groups of people lack a spokesperson that can accurately
express their reality.
What Role Do Nonprofits Play?
The nonprofit sector has been tasked with the responsibility of setting the moral agenda for
society. Each pillar of ethics must be met accordingly and with ease to ensure the stability and
quality of these responsibilities. Doug White, philanthropic consultant, defines four concepts as
the backbone of ethics at nonprofit organizations in his book The Four Pillars; those four
concepts include disclosure, transparency, avoidance of conflict of interest and oversight. Ethics
is what sets the standard for deciding what is good and just for individuals. At a nonprofit,
adhering to these four concepts makes it difficult for organizations to miss the mark. Disclosure
and transparency allow leaders to be held accountable, while avoidance of conflict of interest and
oversight give the powers that be a blueprint to follow when appointing the next generation of
leaders or implementing policy. Retaining these concepts is vital if an organization wishes to
fulfill its mission and advocate for society’s most overlooked communities, although a 2017
report titled Race to Lead: Confronting the Nonprofit Racial Leadership Gap proves otherwise.
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Race to Lead reported that people of color comprise less than 20% of nonprofit executive
and director positions at nonprofit organizations (Building Movement Project). Thus, the
communities that nonprofit organizations serve cannot possibly be reaping the benefits of having
a qualified spokesperson to advocate for them. Proper representation would mean higher
numbers and the sector would have no issue providing communities with the resources needed to
fulfill the areas that have been neglected. It seems slightly tone deaf that the nonprofit sector has
failed to appoint people of color to executive and director positions. Without proper
representation some gaps can be overlooked and trust amongst community members may easily
become lost. It is essential that the sector consider these statistics; the groundwork of its
foundation depends on it. Nonprofits are meant to empower the communities they occupy;
therefore, communal and cooperative support is necessary.
Community, as defined by Robert Bellah, is “a group of people who are socially
interdependent and participating together in discussion and decision making. They share certain
practices that define the community and are nurtured by it” (Bellah 306). The nuance of
sharing that Bellah offers makes the Race to Lead statistics stand out even more. If people of
color cannot see themselves helping to make the decisions for the community they dwell within,
then the nonprofit sector is in fact, failing to serve and fulfill its mission.
From a strategic point of view, lack of representation can cause organizations to fail at
executing tactics effectively. Nonprofits do more than just implement programs and initiatives.
According to Chao Guo, Associate Professor of Nonprofit Management at the University of
Pennsylvania:
These groups have a moral responsibility to provide services that reflect the true needs of
those they serve. They also have the enormous potential to improve their constituents
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lives by influencing public policy and empowering them to represent themselves
effectively. For nonprofits to fulfill their service, advocacy, and empowerment roles, it is
not only appropriate but also necessary for organizations to establish structures and
systems that ensure that they voice their constituents’ views and concerns (Nonprofit
Quarterly).
There is a trickle-down effect that occurs when nonprofits do leadership right. Their constituents
receive more than just the services provided within programs and initiatives, they get the direct
motivation and the skills to become activists. This activism is what sparks change in a
community under pressure. Organizations funded by the people have a complex duty to not only
serve the population, but also to influence community policy. By changing the status quo,
nonprofit organizations reach their full potential and teach susceptible members of society to use
their voices. However, it is only right that satisfying this moral responsibility is done by
including all of the key players. Therefore, while the nonprofit sector adheres to each pillar of
ethics in establishing community, they should also pay special attention to the demand for
integration.
The path that the nonprofit sector has undertaken to get to this state has not been linear.
Obviously, charity and philanthropy were founded on virtuous principles. It is just that recent
reports have uncovered unfortunate findings.

Uncovering the Facts

Race to Lead: Confronting the Nonprofit Racial Leadership Gap provides an excellent
overview of the current circumstances. The most general takeaway from the study shows few
differences in nonprofit employees’ educational backgrounds, organizational roles, salaries, and
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length of time working within the sector (Building Movement Project). The following figure
illustrates the differences between participants holding various degree levels.

Figure 1: Chart showing the varying degree levels obtained by participants of the Race to Lead
study. Comparisons are made by dividing people of color and white respondents.
(Source: Building Movement Project)

It is clear that people of color are more likely to work at a nonprofit organization with an upper-
level degree such as a PhD, and just as likely to hold a master’s degree in comparison to their
white counterparts. There are few differences in this comparison which makes the

Figure 2: Graph showing the position levels of people of color and white respondents of the
study. (Source: Building Movement Project)
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disproportionate number of people of color in leadership positions surprising. In terms of
experience and having the ability to be promoted from management, people of color tie with
their white counterparts again. The figure above shows the number of minorities working in
management and staff positions in contrast to white participants and the numbers are comparable
when the lens is not being focused on executive spots and lower-level staff. There are more
people of color occupying entry-level staff positions than white participants and less people of
color in executive and senior management spots. The number of participants occupying middle
management positions are the same.
The uneven numbers lead many to believe there is racial bias getting in the way of
appointing new leaders and rightfully so. If there are more people of color with upper-level
degrees within the sector, then they should certainly be occupying more executive positions than
white participants of the study. But free will is a valid counterclaim and maybe people of color
do not wish to be promoted to senior staff. The Race to Lead report negates this theory by
revealing that people of color aspire to be leaders more than the white respondents of the study
working within the nonprofit sector (Building Movement Project).

Figure 3: Chart showing the percentage of participants that would choose to obtain leadership
positions. (Source: Building Movement Project)
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The figure above illustrates this fact by proving that at least half of the minority participants in
the study expressed a desire to obtain leadership and only a quarter of the respondents did not.
Zahra Nealy, a Communications Specialist at Cedars-Sinai Medical Center in Los
Angeles explains how her progression into the nonprofit sector was appropriate; she also
mentions the ways in which her personal experiences inspired her choice to work in service:
“For the longest time I wanted to become a doctor, but when those dreams didn’t come
true, this was the most natural fit. My mom received her Master’s in Social Work from
Boston University and worked at the executive level in various state government and
non-profit jobs during her career, so I was exposed to the social sector at a young age.
My parents instilled a strong sense of helping others so while I didn’t become a medical
doctor, working in the nonprofit sector is my way of helping various groups of people in
need.”
People of color, especially those with upper-level degrees do not differ in qualifications and
capabilities fit for running an organization. The data has proven this to be true, but there is still
something getting in their way of obtaining leadership.
Race to Lead’s report suggests that implicit racial bias is the underlying factor
contributing to the disproportionate number of minorities in leadership and there are many other
studies that help to confirm this. Full Fact, a research foundation, conducted a study in 2009
claiming that people with white-sounding names were nearly twice as likely to get call backs
from potential employers than people with ethnic sounding names (Full Fact). The statistics that
have been revealed thus far are off-putting when thinking about the future of the nonprofit sector.
As an institution that was established to achieve moral responsibility and community the mission
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fails when there is not equal opportunity. Moreover, knowing that these disparities exist and
doing nothing to fix them is also disappointing.
The following graph shows what Race to Lead participants think about the existing
nonprofit organizational leadership and their contribution to the current state of affairs.

Figure 4: Graph showing the opinions held by people of color and white respondents of the Race
to Lead study regarding leadership practices and diversity within the sector.
(Source: Building Movement Project)

It is clear that an overwhelming majority of people of color feel strongly about recruiters being
irresponsible when selecting talent and the boards lack of support for staff of color. The largest
divide amongst participants was apparent in the opinion of whether or not nonprofits exclude
candidates of color based on the perceived “fit” of the organization. This finding emphasizes the
need for proper representation at nonprofit organizations and proves that many people of color
correctly identify the lack thereof between minority communities and leaders in the social sector.
This finding also highlights the tendency for white colleagues to turn a blind eye toward the
needs of their minority counterparts and the communities they serve.
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Terri Austin, an attorney and revolving board member of many prestigious organizations
such as New Alternatives for Children and the Women’s Sports Foundation shares her opinion
regarding the racial leadership gap and the need for proper representation:
“Traditionally, nonprofit organizations have been established and organized by people in
a position of wealth and influence who in good faith are trying to make the world a better
place. The problem is that the client population is often people of color or other
underrepresented populations. While there are certainly qualified minorities who could
lead nonprofit organizations, there should be an even greater effort to identify candidates
who can lead. I believe the leaders at an organization should understand the needs of the
communities they serve in order to better serve those communities.”

Figure 5: Graph showing the Race to Lead respondents’ attitudes toward nonprofit workloads,
social networks, salaries, etc. (Source: Building Movement Project)
9
Wealth and influence are certainly qualities that numerous people of color lack but often
times cannot control. Barring people of color from leadership based on affluence is dangerous
because it leads to negative perceptions both internally and externally causing the value of an
organization to depreciate. The Race to Lead report highlighted how complex the limitations
that come with being a person of color in the nonprofit sector can be; minority respondents
mentioned being paid inadequate salaries, needing better role models, lacking social capital, and
desiring to build relationships with funding sources (Building Movement Project). The figure
above illustrates these barriers in comparison to white respondents and in major areas such as
lacking role models or relationships with funders, people of color were almost 10 percent more
likely to have that experience.
These numbers are obviously disappointing, especially when thinking about the benefits
staff of color bring to nonprofit organizations. The notion of community and collaboration are
only fulfilled by including people of color in important decision-making practices. Nick Price,
contributor for Board Effect, explains that a lack of diversity at nonprofit organizations is a
flagrant issue:
While chief executives and nonprofit board directors are looking the other way, their
communities, donors and others are judging the nonprofit by what they see. Some of
them are finding that nonprofit organizations aren’t connected well enough with their
communities to understand their needs. They’re also finding that the nonprofit’s
promotional materials don’t match the organization’s values, culture and public
messages. There’s a disconnect between their words and actions, and their activities,
especially when it comes to diversity and ethnicity (Board Effect).
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It is inconceivable to believe that the nonprofit sector understands the responsibility they have to
the people and are failing in this major area. The discoveries from the Race to Lead study
suggest that the racial leadership gap may not be an accident and other reports reveal similar
implications.
The 2017 Leading with Intent report conducted by Board Source surveyed various
executives and board members within the nonprofit sector about diversity and inclusion. About
65 percent of the CEOs stated that they knew diversity was important but admitted to doing
nothing about it and 41% of board members stated they knew diversity was not a priority for
their organizations (Board Source). With so much literature revealing the disparities surrounding
race at nonprofit organizations it is quite surprising that nothing is being done to address it.
The average person would naturally think that the obstacles people of color face are
structural and that the racial leadership gap amongst leadership positions at nonprofit
organizations is, in fact, systematic. One of the major themes that underscore implicit racial bias
is perception. The way people of color are perceived in the workplace leads to unfair treatment.
It is important to turn the lens onto the sector as a whole and identify how nonprofit
organizations have been perceived in the years leading up to these reports. Doing so will
emphasize where in the structure the issue of racial bias shows up as well as what led to it and
hopefully how to fix it.
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Reading the Room: Understanding the Perception of Nonprofit
Leadership
The 2017 Race to Lead report clearly exposed an issue that affects the nonprofit sector as
a whole. Racial bias is evident within this system, preventing integration at each level of the
organization. The primary concern is ensuring that communities are provided for, thus
representation of all types should be implemented, not just racial. By examining some of the
rhetoric being spouted, a better understanding regarding the types of representation needed
within the nonprofit sector can occur.
Inputting “nonprofit leadership” into Advanced Twitter Search yields a variety of content
from active participants within the nonprofit sector. The following analysis will measure the
sentiment of the most popular tweets published from the year 2013 to 2017. Each tweet will
come from notable entities with influence such as nonprofit consultants, media outlets and
individual organizations. They will also feature reference links for further reading and analysis of
the message. The sentiments can provide context as to the climate of nonprofit leadership and
furthermore, indicate what needs to change. They will also help to draw conclusions about what
steps should be taken to address these issues as Twitter has become a reliable platform for
sharing news and links to helpful resources.
The following figure shows the most liked tweet featuring the keywords “nonprofit” and
“leadership” of 2013. Leadership Learning is an organization focused on defining power in
leadership and considering the organization’s mission aligns with the theme of nonprofit
leadership it is no surprise that this piece of content would qualify for analysis. The overall
sentiment of the tweet is neutral. There is no implication that the message was meant to denote a
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particularly positive or negative tone, however, the external link provides more context as to
what readers should receive from the information.
Figure 6: Tweet published in 2013 by Leadership Learning. (Source: Advanced Twitter Search)

Upon reading the article provided in the external link, Leadership Learning’s sentiment can still
be classified as neutral. The article is a quick summary of ideas relating to leadership and
mindfulness practices explaining that complicated problems of our age, such as climate change,
income inequality and racial bias will require a different kind of leadership to solve (Leadership
Learning). There are no concrete examples or statistics to ignite an emotional response in
readers.
Considering this is the most popular tweet related to nonprofit leadership of the year 2013
it is reasonable to assume that constituents were not bothered with the possibility of corruption
within the sector. While income inequality and racial bias are mentioned they are not attributed
as issues being faced by the nonprofit industry; they are instead considered secular dilemmas that
have yet to be solved by nonprofit leaders.
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It is also important to note that policy and reform are not being perpetuated as the answer
to solving complex issues within the sector. Mindfulness is the recommended tactic and there are
no actionable steps listed for implementing any type of power within leadership roles at
nonprofits. Thus, the sentiment surrounding nonprofit leadership in 2013 is neutral and
individual organizations are perpetuating the leadership narrative as opposed to thought leaders
and consultants who could effectively point out disparities and suggest ways to fix them.
The following figure shows one of the top tweets featuring the keywords “nonprofit” and
“leadership” of 2014. Business Volunteers Unlimited is an organization that provides consulting
to nonprofits among other services. Their contribution to the concept of nonprofit leadership is
not surprising; they are thought leaders paying close attention to the current climate of the
industry and recommending ways to enhance operations. The overall sentiment of the tweet is
neutral. Similar to the previous piece of content, there is no implication that the message was
meant to denote a positive or negative tone. However, there is an external link that provides more
context.

Figure 7: Tweet published in 2014 by Business Volunteers Unlimited. (Source: Advanced Twitter
Search)
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The external link summarizes a study conducted by McKinsey & Company, another consultancy
firm. The study highlights the areas needing improvement within the nonprofit sector that current
leaders are tasked with addressing. For example, the study highlights that a number of leaders
say they’re concerned that the sector’s priorities are at risk if the organizations lack leadership
teams with capabilities to fulfill emerging missions effectively and to adapt to fast-changing
demands (McKinsey & Company). This rhetoric alludes to a sense of urgency present within the
nonprofit sector that was inconceivable the year prior. This information implies that there is a
negative sentiment beginning to unravel surrounding nonprofit leadership it is just more difficult
to find the information because the details are not apparent.
The 2014 study detailed similar findings as the 2017 Race to Lead report stating there is
no deficit of committed, talented people in the social sector. What they lack is training, support,
and opportunities to grow in their roles (McKinsey & Company). Of course, these findings are
not attributed to racial bias, but they still offer the same themes and concepts proving that the
nonprofit sector has faced persistent challenges in leadership for almost a decade.
The study does attempt to offer an answer to these challenges by explaining why there
are disparities in leadership development. The lack of opportunities to grow as a leader from
within, coupled with a paucity of mentoring and capability training, may be the single biggest
factor driving leaders’ assessment that leadership capabilities are low (McKinsey & Company).
McKinsey & Company cites internal succession, leadership turnover, mentorship and training as
the most prevalent obstacles potential leaders must overcome within the nonprofit sector. The
issue is that the organizations are not prepared to appoint a new executive or director in the event
that an old one resigns and are often left with the task of trusting someone who is incapable of
fulfilling the organizations mission without the proper learning curve.
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Upon taking a more in depth look into what information was being circulated in 2014, the
overall sentiment surrounding nonprofit leadership is slightly negative. There are now entities
doing the work to call out what the nonprofit sector is doing wrong even if the information is
embedded within impartial advice.
The following figure shows a tweet published in 2015 by Dan Pallotta, a well-known
thought leader on philanthropy and nonprofit success. It was the most popular tweet featuring the
keywords “nonprofit” and “leadership” for that year. The external link is an article by the Boston
Globe directly stating that there is a crisis in nonprofit leadership. The overall sentiment is
obviously negative and considering the Boston Globe is a trusted news source, readers more than
likely consumed this piece of content as a reliable viewpoint.

Figure 8: Tweet published in 2015 by Dan Pallotta. (Source: Advanced Twitter Search)
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The radical shift in public perception toward nonprofit leadership can be supported with factual
discoveries. The Boston Globe article cites a report which surveyed 1,200 nonprofit executives
and board members. The study found that in New England alone, 64% of nonprofit leaders will
leave their jobs within five years and 30% will leave within two years. These statistics mark an
extreme turn in the rhetoric. At first nonprofit leadership was simply unorganized and
unprepared, now nonprofit leadership has revealed itself to have a significant internal flaw.
Leaders do not stick around long enough to fulfill their duties, perpetuating a significant
increase in turnover rates.
The Boston Globe article proposes a noteworthy idea that explains what led to the current
state of the nonprofit sector. The nonprofit sector is increasingly at risk due to a looming crisis in
nonprofit leadership made all the more glaring by two seismic demographic shifts: the
emergence of minority-majority cities in need of leadership that reflects their communities, and
the retirement of the baby boomers (Boston Globe). It is true that the racial leadership gap exists
in part due to the demand for representation. Minority-majority cities call for more people of
color in the forefront if adequate spokespeople are to be appointed into leadership and the
retirement of previous generations alludes to there being a development deficit.
The article provides more facts that agree with the Race to Lead report citing that
multiple studies have shown only 9 to 15% of current nonprofit leaders are people of color and
the majority of the leadership pipeline is white (Boston Globe). These findings serve to amplify
the validity of the 2017 report and they also confirm that the nonprofit sector has been moving in
this direction for quite some time. Thus, the sentiment surrounding nonprofit leadership in 2015
was negative and public perception was not muted. The Boston Globe article was retweeted and
liked many times with additional discussion taking place in tandem. It is also important to note
that 2015 introduced the first mention of numerous deficits within nonprofit leadership
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simultaneously. The racial leadership gap, the development deficit and the implementation of an
internal succession model are all recommended as a fix to the nonprofit leadership crisis.
The following figure shows one of the top tweets featuring the keywords “nonprofit” and
“leadership” of 2016. It was published by the Nevada Statewide Charter School Authorizer and
provides a template for a great board orientation. The overall sentiment of the tweet is neutral
considering there is no language perpetuating a particularly positive or negative emotion toward
any theme presented within the message. The reference link can provide more context as to what

Figure 9: Tweet published in 2016 by Nevada Statewide Charter School Authorizer. (Source:
Advanced Twitter Search)
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exactly makes for a great board orientation and help to further understand the board’s role in
nonprofit leadership.
The article is written by Joan Garry, a nonprofit consultant who specializes in both large
and small organizations. She explains that healthy nonprofits have great boards that work hand-
in-hand with the Executive Director to help fulfill the mission (Joan Garry Nonprofit
Leadership). Board members clearly play an essential role in the success of nonprofit leadership;
therefore, all of these findings apply to them as well. Conducting board meetings and
incorporating new members into the organization is a process that many nonprofits do not
prioritize, but Garry recommends that the Chair of Recruitment should be present at the
orientation meeting since they are responsible for the retention and enlistment of board members.
Garry also recommends that the Executive Director should be present and share why the new
members were hired on and what types of values they bring (Joan Garry Nonprofit Leadership).
After taking a closer look at the reference link provided the overall sentiment regarding nonprofit
leadership in 2016 has a hopeful and optimistic undertone, thus the sentiment is positive, but it is
arguably a crisis management tactic. Leadership is also being discussed on a greater scale and
board members are being included in the conversation that defines nonprofit leadership.
The figure below shows the most shared and liked tweet featuring the keywords
“nonprofit” and “leadership” of 2017. The Race to Lead report had been released earlier in the
year, therefore it is no surprise that the conversation focuses on racial bias and misrepresentation.
The tweet was published by Tiffani Bell, a community activist, and showcases the blatant
scrutiny the nonprofit sector received for failing to appoint people of color into leadership
positions. The sentiment is clearly negative. The language is highly emotional and angry; there is
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even a call to action citing that funders should refuse to pay organizations with diversity gaps in
leadership.
Figure 10: Tweet published by Tiffani Bell in 2017. (Source: Advanced Twitter Search)

The reference link is an article by Fast & Company summarizing the statistics that prove
racial bias amongst leadership positions within the nonprofit sector. Fast & Company mentions
the Race to Lead report explaining that there’s an intense lack of racial diversity among
nonprofit and foundation leaders, an issue that remains unaddressed despite having been well
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documented for the past 15 years (Fast Company). The link has an overall negative sentiment
similar to the original tweet. Even though the article is highlighting these racial disparities in the
nonprofit sector to educate readers on the facts there is still a sense of disappointment. The
article goes on to cite another study by Battalia Winston, a recruiting group, lamenting that
things get even more homogenous when the field is narrowed down to the largest 315 nonprofits
and foundations. The percentage of white people holding the industry’s top positions with these
filters is closer to 90 percent; which means that the well-equipped organizations are more likely
to be less effective when making a difference and solving problems in communities of color
(Fast Company). After taking a close look at the content, the sentiment in 2017 regarding
nonprofit leadership is negative and radical call to actions are being proposed by reputable
leaders forcing the sector to take an honest audit of themselves.
In review of the five years leading up to the release of Race to Lead, a thorough content
analysis suggests that racial bias is a significant issue facing the nonprofit sector. The analysis
also concludes that nonprofit boards are not excluded from the conversation and are to be held
accountable for the disparities facing nonprofit sector leadership as well. There are many other
concepts related to nonprofit leadership that circulate in the discourse such as succession
planning and the development deficit. These concepts can be compartmentalized amongst one
another, but all of these ideas contribute to a less effective social sector. Having people of color
in leadership and preparing those people adequately is vital for organizational success. Mary
Rollins a retired Director of Client Services states, “I believe the issues are the same that
confront any group charged with serving people. If there is not diversity, the organization cannot
be successful in checks and balances and can risk mirroring only the view of what is usually an
all-white, male leadership that gets bogged down in the ‘Old Boy’ way of doing things.” The
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issue begins with the generational gap. There are groups of people at the top acting as
gatekeepers and maintaining a disconnect between the older generation and the newer. This
disconnect has led to a development deficit causing the nonprofit sector to lack a succession
model that includes any type of leadership turnover. As a result, the most susceptible population
of candidates — people of color — are overlooked.
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The Primary Duties of the Board and How Negligence Leads to
Overall Disparity
A board of directors plays a key role in nonprofit organizational success. Board members
usually come from esteemed professional backgrounds and serve to make a small organization
credible, or on the contrary, a large organization more efficient. A board member will often
perform his/her obligations without compensation and provide the organization with qualitative
expertise. A virtuous demeanor and overall charming personality can get a board member a lot of
points at meetings, but there are three primary legal duties that every board member must
uphold. The duty of care, the duty of loyalty and the duty of obedience all contribute to the
effectiveness of a nonprofit organization, and when deciding what leads to essential gaps it is
important to assess whether or not an organization is upholding these responsibilities in order to
move forward productively.

The Duty of Care

Caring is a straightforward concept and requiring nonprofit boards to care seems vigilant
but the definition of care that is described as an obligation for the board of directors is intricately
focused on the need to be thorough and attentive. The National Council of Nonprofits describes
the board of directors’ duty of care as the responsibility to take care of the nonprofit by ensuring
prudent use of all assets, including facilities, people, and goodwill (National Council of
Nonprofits). First and foremost, ensuring the prudent use of all people would require the
nonprofit sector to fix the racial leadership gap and appoint more than just 20% of minority
stakeholders into leadership. Moreover, negligence to the duty of care shows up in many more
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ways; especially when observing the board and executive relationship. Often times, people in
positions of power take advantage of their status and work with fellow leaders to protect
themselves as opposed to practicing goodwill and tending to society.
Bill Davis, former CEO of Community Action in Minneapolis made a statement to the
local media in 2014 explaining, “The fact of the matter is we continue to provide a quality and
needed service to low-income people in this community. We have a great staff. We have a great
board. They understand the importance of this job and the people we are serving” (Star Tribune).
As Davis highlighted the work being done by Community Action and the organization’s board,
he failed to mention the underlying corruption that caused the nonprofit to fail in its mission. He
claimed that the board was doing a great job and that the community was being served
righteously, but a few months before that statement was made, the state of Minnesota raided the
offices of Community Action and permanently shut down the organization. The Department of
Human Services found that the nonprofit organization had spent at least $800,000 for a variety of
unauthorized purchases and activities (Star Tribune). The duty of care may seem like an obvious
request of individuals in leadership at nonprofit organizations, but when critical resources are
being misused this primary legal duty serves as a reminder to the public that there is a threat to
society’s system of checks and balances.
Transparency International, a research foundation, releases a global corruptions
perceptions index annually. The report scores each region from zero to 100, zero being highly
corrupt and 100 being the opposite. The following figure illustrates the United States’
corruptions perceptions index over the last few years. There is a significant drop in the country’s
corruption score between the years 2015 and 2016 and aside from that the United States only
scores at slightly above halfway corrupt on Transparency International’s scale. Even though the
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score could be worse there is still room for improvement and instances of corruption like
Community Action prove this to be a reasonable deduction.

Figure 11: Chart illustrating the corruptions perception index of the United States over the
years. (Source: Transparency International)

Board members disregarded their primary duty of care and being that members of the
community as well as lower-level staff suffered because of it, monitoring board performance and
assessing common practices would be useful. A 2012 audit by the state legislative auditor
singled out $1.35 million given to households that were not eligible for emergency benefits (Star
Tribune). An abuse of power is commonplace when there are homogenous groups in leadership,
but diversity not only improves checks and balances it also ensures the separation of power
allowing every member of the community’s interest to be considered and proper integration to
take place. The unusually critical audit throws into doubt any future funding of any high-profile
group that doles out federal and state aid to low-income families and provides services aimed at
teaching self-sufficiency (Star Tribune). Many experts would declare that the Community Action
audit should not be unusually critical; it should, in fact, be a routine for any organization
providing services to communities in need. Considering the board and executive relationship is
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so powerful and clearly possesses varying degrees of partiality, implementing regular audits
would help to address these issues and prevent serious mistakes from happening in the future.

The Duty of Loyalty

Because board members donate their time and resources to an organization, dependability
amongst leaders is expected. Many members of a board will devote themselves to a cause and
perform the work for free while tirelessly giving to that organization taking pride in its results.
The National Council of Nonprofits explains that the board of directors of a nonprofit has a
primary legal duty of loyalty. Its job is to ensure that the nonprofit’s activities and transactions
are advancing its mission. The members also recognize and disclose conflicts of interest, which
means making decisions that are in the best interest of the nonprofit entity (National Council of
Nonprofits). On a basic level the duty of loyalty and the duty of care are extremely compatible.
Ensuring prudent use of all assets, people and goodwill at an organization requires making
decisions in the best interest of the nonprofit entity. This component is simple, but the disclosure
of potential conflicts can be difficult for numerous individuals at organizations because it cannot
be strictly defined.
Conflicts of interest are, however, a critical notion contributing to the existence of the
racial leadership gap. Doug White, an advisor to nonprofit organizations and philanthropists
states, “Most charity experts agree that inherent in the concept of duty of loyalty, which is one of
the benchmarks of service on a charity’s board of trustees, is the disclosure of potential conflicts”
(White 161). As a benchmark of service, the nonprofit sector’s success can be measured by
assessing the current circumstances. With the racial leadership gap present, it is difficult to
declare the nonprofit sector as an entity achieving such success. Majority of the Race to Lead
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study’s participants cited being involved in minority-majority communities, 74% of the
respondents claimed they worked for organizations involved in diversity, equity and inclusion
activities (Building Movement Project). These statistics make the low number of minority
leaders in director and executive positions discouraging. Inherent within the racial leadership gap
is an overall conflict of interest. The following figure shows the evolution of homogeneous
groups in leadership starting with a majority white staff. Failing to integrate people of color into
the leadership ranks perpetuates recruitment from staff networks and because most white leaders
have majority white networks the result is a homogeneous applicant pool.

Figure 12: Flow Chart showing how a majority white staff perpetuates homogenous groups in
leadership through similar social networks. (Source: Community Wealth Partners)

The BBC reports measures of explicit bias falling rapidly over the past few decades. In
1958, 94% of Americans claimed they disapproved of black-white marriages, that number had
fallen to 11% in 2013 (BBC). But with a majority white pool of applicants, implicit bias is
more likely to occur. Naturally, recruiters choose the candidate they trust most to fulfill open
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leadership positions. Settling on the qualities and characteristics that organizations are used to is
the act of self-serving even though the bias does not manifest explicitly. This process prolongs
the racial leadership gap but knowing the need to sustain trust from the community can help
reduce the occurrence of majority white leaders.
The worst thing an organization can do is continue operations without taking the time to
address any issues that pose a threat to the success of the nonprofit’s facilities. David O. Renz of
the Nonprofit Quarterly explains what happens when a conflict of interest goes unaddressed by
stating, “A conflict of interest can create or reinforce a climate of inauthenticity and mistrust that
inhibits active dialogue among members of an organization. It can also lead to or result in
decisions and actions that are not in the best interest of the organization and its constituents”
(Nonprofit Quarterly). One program funded by the Department of Human Services was meant to
help people obtain jobs through Community Action training. The audit found that there was an
85% to 96% drop in the number of participants who landed a job (Star Tribune). As the leaders
of Community Action neglected their primary legal duties members of the community received
less than what they deserved. A conflict of interest results in a lack of care toward an
organization’s constituents but it also leads to distrust internally. In the case of Community
Action, more than 50 employees lost their jobs due to the board and executive crisis and many of
those employees had no control over the decisions being made by the board of directors or the
CEO (Star Tribune). In essence, the culmination of events that result from a conflict of interest is
unethical and unfair to the individuals who desire to do the right thing.
However, it is difficult to maneuver through the recruitment of potential board members
without considering influential people who possess excess amounts of power. White states, “The
problem is that the kind of people you want on a board are often prominent, and they tend to be
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involved in services or products that a charity might need” (White 161). Community Action’s
board of directors was comprised of numerous political figures who in theory, were meant to
recommend the ideal services for people in Minneapolis. But their actions proved to their
constituents that they were working in the interest of themselves and Community Action was
ineffective because of them. Charities often invite people to join their governing board because
they have connections and experience. And yet, some of those connections or relationships may
be with other organizations or causes whose interests are at times inconsistent with those of the
inviting organization (Nonprofit Quarterly). There are steps that can be taken to ensure checks
and balances within the duty of loyalty. Not every board member has to possess the same level of
influence that the more prominent figures offer. Doug White does not believe that the nonprofit
sector has to sacrifice social responsibility in order to gain power; he states, “There is certainly
no requirement that the charity forego quality” (White 161). Quality can come in many forms,
including strategy, various skillsets, and personal insights. Power and money are not the only
qualitative contribution of a board member, therefore, there is room for diversity.
Keeping board members accountable and consistently reminding them of the task at hand
is the most crucial step an organization can take to ensure that leaders at the very top do not
perpetuate wrongdoing. Doug White notes, “Some charities have policies that do prohibit any
conflict of interest, and act upon that even if it means pursuing people or services that are of
lesser quality than what a board member could provide” (White 162). The most important
takeaway that aids in the application of the duty of loyalty is that balance is key. Too much
power can lead to corruption and when leaders are acting in the interest of themselves an outside
entity should be able to step in and review board director behavior.
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The Duty of Obedience

Application of these responsibilities is naturally an obligation especially when
considering the need to regulate leadership practices. The duty of obedience allows the duty of
care and the duty of loyalty to have ramifications when ignored. The duty of obedience that is
required within all nonprofit boards is defined as the obligation to ensure that the nonprofit obeys
applicable laws and regulations; follows its own bylaws; and that the nonprofit adheres to its
stated corporate purposes or mission (National Council of Nonprofits). This duty is important
and allows the board of directors to know the seriousness of their contribution, it also gives them
a model of what a strong board culture might look like.

Figure 13: Graphic illustrating the most important board director behaviors. (Source: Russell
Reynolds Associates)
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Russell Reynolds Associates is a business consulting firm offering services that assess the
effectiveness of organizational leaders. The following above illustrates insights drawn from the
2016 Russel Reynolds Associates’ Global Board Culture survey which measured director
behaviors that create high-performing board culture and productivity (Russell Reynolds
Associates). The most apparent insights include a willingness to challenge management,
demonstrate sound business judgement, possess the courage to do the right thing, avoid
groupthink by possessing independent thought and asking the right questions. In a way, the board
of directors operates most effectively by providing oversight to organizational management.
Board members also play a very significant role in providing guidance to nonprofits by
contributing to the organization’s culture, strategic focus, effectiveness, and financial
sustainability, as well as serving as ambassadors and advocates (National Council of Nonprofits).
The interconnectivity of the three primary legal duties are made clear after realizing that board
members are meant to serve as ambassadors and advocates. A productive organization begins at
the very top, and board members play a significant role in the success of a nonprofit.
Revisiting the case regarding Community Action yields a better understanding of the
behavior expected from a board member and why objectivity is crucial. Community Action
board members failed to police the executive and offer common sense regulations for ridiculous
requests. Former CEO Bill Davis admitted to buying a car for personal use with the
organization’s funds then seeking authorization from the board only after the transaction was
complete (Star Tribune). The board of directors failed to constructively challenge management
when appropriate and did not possess the courage to do the right thing for the right reason. These
obligations, especially the duty of care and the duty of obedience, are extremely straightforward
and simple but are necessary in the dialogue to prevent corruption. The Department of Human
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Services rightfully pointed the finger at leadership when the organization failed. According to
auditors, “the board of directors are the ones to blame for benefiting from $34,892 worth of
nonbusiness-related activities and a lack of oversight” (Star Tribune). Enforcing the primary
legal duties gives the nonprofit sector a blueprint for good governance and a pathway toward a
more diverse leadership structure. Making these responsibilities law leaves little to no room for
error when working to provide for underrepresented groups. The racial leadership gap signals
that there are norms within the board of directors that should be addressed and quite frankly,
taken more seriously.
Assessing the obligations that board members are expected to maintain calls into question
the nonprofit sector’s overall mission to serve susceptible populations. Doug White has a very
clear point of view when it comes to board members being careless and not prioritizing
vulnerable demographics. White states, “A part of the group that doesn’t care very much are the
trophy names brought into the fold, where there is no expectation of actually doing or overseeing
anything” White 163). An important element that Russell Reynolds Associates’ Global Board
Culture survey highlighted was the need for board members to ask the right questions. This idea
can be extended beyond the board and executive management relationship; board members
should begin to question one another and participate in consistent dialogue that not only
challenges management but also challenges themselves. Doug White recommends implementing
more regulatory action when he states, “It does not mean worrying about every investment
transaction, although it does mean requiring the auditors to certify that they have done
everything they should to ensure transactions are executed properly” (White 164). Implementing
enhanced regulation, consistent audits and perpetuating a new internal narrative is important for
the nonprofit sector moving forward. In order to avoid issues like the one plaguing Community
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Action in Minneapolis every nonprofit board must get honest with themselves. White states,
“Almost every charity scandal involving an organization’s executive director or president has its
roots in the lack of board oversight” (White 164). It starts at the very top and no one can blame
the entire sector for failing without pointing the finger at board members.

Money Matters: A Board’s Contribution

The operational duties required of a board member aid in the prevention of corruption
and a healthy board of directors leads to a more effective organization. There is, however,
another key element to a board member’s responsibilities and that is fundraising, which is a top
priority for nonprofit organizations. There is no standard way for a board to approach
fundraising. The only wrong way to approach it is not to have a plan at all (Board Effect).
Luckily the nonprofit sector has abounding literature explaining the need to regulate board
fundraising and how to do so productively.
Nick Price explains, “Early board discussions should focus in on writing a board policy
that reflects the boards beliefs and approach to fundraising; set expectations for personal giving
by board directors; and identify expectations for how the board expects its directors to participate
in fundraising activities” (Board Effect). The financial obligation of a board is twofold; they are
tasked with improving operational profitability through increasing revenue and raising private
development support through gifts and grants (AFP Global). Understanding the monetary
contribution that is expected of a board member makes the three primary legal duties even more
conceivable. A board member has to care, work in the interest of the organization and abide by
the rules that have been set for them in their position; all of these are prerequisites to ensure that
the organization is supported. When a nonprofit is experiencing critical deficits, it is important to
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realize that a board is not completely thriving in these functions and find ways to fix the issue so
that the organization reaches optimal profitability.
Cause Effective, a New York nonprofit consulting firm conducted a study titled Money,
Power and Race: The Lived Experience of Fundraisers of Color and found that 88% of
respondents said they would recommend fundraising as a career for a person of color, but of that
60% acknowledged they might be reluctant to suggest that people of color they know move into
the fundraising profession because fundraising involves external relationships where bias might
be present (Cause Effective). This vital element of governance required at nonprofits might be
another crucial factor contributing to the racial leadership gap, but dismantling it seems easy
simply because diversity in fundraising is beneficial for the nonprofit sector in many ways.
Fundraising is where the narrative of organizations is shaped. Fundraisers create the
language that describes the problems, solutions and visions for change (AFP Global). Obviously,
a homogenous board of directors might convey a less realistic narrative that describes the
problems, solutions and visions for change especially when the organizations constituents are
communities of color. It is difficult for the majority to identify with what is urgent, thus the
narrative that gets perpetuated is usually one that is too shallow for an accurate representation of
the community’s perils.
Donors of color are also a rising philanthropic asset for the nonprofit sector and are
especially responsive to being approached by fundraisers of color (AFP Global). Integrating
fundraisers of color and gaining a more diverse pool of donors would contribute to the sense of
trust that comes with the duty of obedience and the public would see value in an organization
that possesses a well-balanced leadership team. When money is being given freely it is important
to heavily factor in trust. Donors have to rely on the fact that they are not giving away resources
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to corrupt individuals with power. Diversity in fundraising leads to a broader perception and
allows for more donations because potential donors are more inclined to find something they
identify with as it relates to a nonprofit’s values.
However, there are some key causes for concern when looking at the perceived benefits
of having fundraisers of color. Being a person of color in the fundraising profession can be
detrimental for the fundraiser because of limiting circumstances. The Money, Power and Race
study revealed that 77% of respondents acknowledge facing obstacles in their development
careers due to their race/ethnicity. The three top challenges cited by the respondents were
expectations of fundraising exceed time and ability; lack of pre-existing fundraising structure;
and lack of donor pool (Cause Effective). While there is a solid benefit to having a diverse team
of fundraising professionals it is still difficult to thrive as a fundraiser of color, and because the
need for fundraising is so high people of color are counted out based on their lack of experience.
Fundraising also manages the external relationships of an organization and fundraisers
are entrusted with presenting their institutions to individuals with the ability to make a game-
changing difference in their constituents’ future (AFP Global). Racial bias interrupts a fundraiser
of color’s ability to influence potential donors and manage those relationships. Community
Wealth Partners illustrated how social networks harm the possibility for diverse leaders within
the nonprofit sector and considering fundraisers of color already cite lacking a donor pool as a
challenge, cultivating partnerships with individuals who can make major differences is nearly
impossible.
Once the importance of fundraising as a board member is realized, the lack of diversity
becomes no surprise. Fundraising is the nexus where money comes into the organization and
with money comes the power to offer resources and enable programming (AFP Global). With the
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need to garner resources, excluding people of color from board positions seems reasonable
especially if they are less qualified, but the Race to Lead study revealed that people of color
receive less training in the area of financial management. This flaw is the effect of racial bias and
it elicits thoughts and feelings toward groups of people that harm organizations more than they
are meant to protect them. One-third of Money, Power and Race survey respondents reported
that they experienced diversity, equity and inclusion issues on the job. Of those, two-thirds did
not feel supported by their supervisors (Cause Effective). Unfortunately, it is evident that even at
the lower staff level people of color are not being taken seriously to potentially carry out key
operating functions. It is also quite clear that their race/ethnicity is not being taken seriously
either and the contribution they could make based on their personal background is not being
regarded.
The similarities between the Race to Lead and Money, Power and Race reports lead to a
conclusive summary which characterizes the nonprofit racial leadership gap as systematic
cruelty. The Money, Power and Race report found that one-third of respondents identified the
executive director as a key determinant in creating a welcoming and supportive climate in which
fundraising professionals of color can fulfill their job expectations with dignity and authority
(Cause Effective). If fundraising requires a collaborative effort involving leadership, then the
focus would ideally be put on supporting and making decisions as a collective. However, it is
still difficult for nonprofit organizations to include people of color into their leadership ranks
because it poses a huge risk. Some boards set a policy for board directors to give a certain
amount annually. Others word their policies to reflect that board directors should give according
to their means (Board Effect). It can be difficult for many people of color to adhere to a fixed
annual donation for obvious socioeconomic reasons. When thinking about the privilege that
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affluent board members have in comparison to people of color the task of integrating minorities
into leadership spots is extremely precarious, but the difference that diversity can make at a
nonprofit organization is the fine line between surviving and thriving.
Another important element of a fundraising policy is to list examples of how the board
expects members to participate in fundraising efforts. The list of possibilities includes submitting
names of potential donors, crafting fundraising letters, or offering to thank donors personally
(Board Effect). Penelope Burk, author of “Donor-Centered Fundraising” explains that about 93%
of donors who received a thank you after giving said they would definitely or probably give in
the future. About 83% said they would give a larger gift next time and 74% would give
indefinitely (Burk, Cygnus Applied Research). Therefore, making a large gift and garnering
donations from personal networks is not the only way to be a successful fundraiser. Each
appointed board member may have a different financial capacity. The other leaders and
professionals within the board of directors can help less qualified members take on more
responsibility by being a mentor and teaming up with those board members to ensure they are
appointed for a reason. Moreover, there could be other areas that a diverse member of the board
might excel in and still support the nonprofit in a meaningful way (AFP Global).
Appointing people of color to take on these responsibilities as a board member or as a
designated donor relations specialist can bring real value to an organization. Giving monetarily is
one way to model good board behavior but there are other crucial components. In fact, board
members are a bridge between the organization and donors and have an exceptional opportunity
to be change agents not just donors (AFP Global). Thus, the implicit bias that causes the racial
leadership gap could easily be managed and quite frankly, could be considered “low hanging
fruit” in comparison to the challenges that organizations are met with consistently. Even though
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money matters it is important to consider the big picture and carefully integrate strong
stakeholders who can contribute significantly to the cause. Research surrounding nonprofit
leadership and the essential gaps that need fixing suggest tackling issues by addressing the
disconnect between generations and staff.
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There Is A Disconnect:

The Generational Gap and the Development Deficit

With so many factors contributing to essential gaps within the nonprofit sector it is
reasonable to confer that quality leadership is scarce. Adequate guidance and support are not
being provided to the management operations of organizations; therefore lower-level staff goes
unnoticed and the opportunity for eligible leaders to grow disappears. There is a disconnect that
manifests among staff and leaders at nonprofits and it is worth observation, especially
considering how much of a group effort it takes to successfully provide resources to communities
in need.

Tension Amongst Generations

Many observers blame the generational gap on the short history of nonprofit
organizations. The practical belief regarding the generational gap is that it is the result of a
seismic demographic shift — the retirement of the baby boomers (Boston Globe). Older
generations occupying board and executive positions are having a hard time relating with the
influx of young talent that make up lower-level staff. The University of Pennsylvania’s Wharton
School of Business held their second annual Nonprofit Day in the winter of 2011 where they
evaluated the differences amongst baby boomers, Generation X and millennials working within
the sector. They recognized a number of trends contributing to intergenerational issues including
“a growing tension between founders of nonprofit organizations and staff members who seek to
find new ways to deliver services” (Wharton Magazine). The older generation’s beliefs and
practices make it difficult for staff to execute certain tasks. Zahra Nealy mentions how difficult it
is to implement new programs and initiatives as a young employee when she explains, “There
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are many internal and external stakeholders and approvals involved working in larger
organizations. It can be complicated planning for initiatives, making execution somewhat
inefficient”. The Wharton School of Business also found that there was an increased willingness
to employ modern technologies such as social media and a greater need to change the way
services are delivered due to the expectations and technologies used by millennials today
(Wharton Magazine). These trends explain the tension among leadership and staff within the
sector and after evaluating such tensions it is reasonable to assume that the generational
leadership gap is, in fact, the precondition leading to the racial leadership gap.
The Stanford Social Innovation Review publishes various amounts of information related
to social change within the nonprofit sector and offers a direct explanation for the persistence of
the generational gap:
The lack of mentorship and support are primary concerns contributing to the generational
gap at nonprofit organizations. People usually leave their jobs because they lack an
internal champion to support their career growth and inquire as to their job satisfaction.
All stages of the leadership pipeline express this sentiment, including CEO’s, who claim
that their boss, the board, fails to mentor them (SSIR).
Younger generations have entered the nonprofit sector with different motivations than their
predecessors. Another trend contributing to the intergenerational struggle is the growing number
of youth’s eagerness to work at an organization that once helped them, thus an influx of people
of color desiring meaningful work. Needless to say, older generations occupying the leadership
space are overwhelmed. These challenges, on top of trying to fix societal issues plaguing
susceptible communities makes working in the nonprofit sector exhausting.
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Connection to the Racial Leadership Gap

There are consistencies within the literature that explains the generational leadership
gap that also shows up in the literature depicting the racial leadership gap at nonprofit
organizations. For example, Wharton School of Business found that older generations were
focused on loyal donor relationships instead of laying the groundwork for fundraising among
the younger generations (Wharton Magazine).
Figure 14: Flow chart illustrating the manifestation and relationship between the generational
leadership gap and the racial leadership gap at nonprofit organizations.

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This fact aids in the dismantling of essential gaps by identifying the root cause. Nonprofit
executives need to uncover and attack the root cause of turnover, broadening their focus from
recruiting new leaders to filling recurring gaps, to prioritizing growing and retaining the talent
they already have (SSIR). The figure above shows a flow chart illustrating the trajectory of the
nonprofit sector beginning with the establishment of nonprofit organizations and ending with the
current crisis — the racial leadership gap.
During World War II there was a surge in nonprofit organizational activity. Many citizens aided
in the effort to support troops fighting the war making the baby boomer generation primary leaders in the
industry. Over time, society naturally began to transform, and minority populations obtained more
accessibility to basic privileges making them susceptible to injustices and unequal power-dynamics. In
order to survive people of color established minority-majority communities and received help from the
organizations meant to counteract those power-dynamics along the way. In the past few years many
people of color are finding themselves wanting to help vulnerable populations in a similar fashion. They
are unfortunately being overlooked due to the large number of baby boomers and Generation Xers
occupying current leadership within the sector. There are many factors contributing to the disdain of
minority talent, but implicit bias is most noticeable, thus causing the racial leadership gap.
It is clear that ensuring funding and donor relationships is vital to current leaders in the sector.
The recurring pattern underwriting leadership gaps is financial management training and the answer is
simple — train the next generation to excel in financial management obligations while keeping in mind
the need to incorporate potential leaders of color because their contribution to the sector is just as, if not
more, viable.
The Chronicle of Philanthropy conducted a study that revealed the charitable habits of donors
across generations. The study concluded that 70% of total individual giving to charities comes from baby
boomers and seniors (Chronicle of Philanthropy). This fact further confirms that there is opportunity for
older generations to take a step back and work to develop the younger generation for leadership.
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Considering their cohort is the largest group contributing to organizational success they could focus on
creating a leadership pipeline that is even more effective than models of succession planning from the
past.
Succession Planning
Providing support and creating a leadership pipeline is the answer to fixing the generational
leadership gap. What is even more detrimental to the nonprofit sector is a concept known as the
development deficit. Wharton School of Business found a lack of succession planning as an additional
trend contributing to the intergenerational crisis, thus creating a development deficit (Wharton Magazine).
This syndrome is coming at a significant financial and productivity cost to organizations, undermining
their effectiveness and hampering their ability to address social and economic inequalities (SSIR).
Majority of the rhetoric regarding this topic attempts to fix these issues by pointing to board members.
The Stanford Social Innovative Review explains possible steps nonprofit boards should take by stating:
Board members should hold themselves accountable for effective succession planning and work
to minimize the risk that their entire leadership team could turn over in the next decade. They
need to make leadership development a priority, committing time and attention to making sure
the right resources are allocated to leadership and staff development within the organization.
They should hold the CEO accountable for prioritizing leadership development within the
organization and should work directly with the CEO to ensure he/she is getting the support to
develop and thrive in his/her role (SSIR).
Developing a model that ensures a low leadership turnover and establishes a succession planning model is
crucial for continuing the forward motion of nonprofit organizations. Currently, the largest source of
replacement talent comes from other nonprofits, exacerbating a turnover treadmill at a time when the
sector needs experienced, capable leaders more than ever (SSIR). Implementing a plan now helps to avoid
any further setbacks. The figure below illustrates the average annual costs of excessive employee
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turnover.
Figure 15: Graph showing the percentage of costs an organization might incur due to high turnover
rates. (Source: ESL Biz Center)

The cost to replace talent is the most damaging to an organization; and if the largest source of
replacement talent is coming from other nonprofits, then there is certainly a fee for convincing the talent
to accept the new position and provide adequate training. The cost of training ranks second in direct
expenses an organization experiences for high turnover rates. The cost of training not only hurts a
nonprofit’s budget, it also keeps the organization from keeping their focus on the job at hand. The
transaction costs alone of finding and attracting a new employee, particularly at the senior level, can be as
high as half of his/her annual salary. But the costs to an organization in distraction can add up to tens or
even hundreds of thousands of dollars more (SSIR). The best and most efficient way to handle filling
empty seats is to target the next group of leaders while they are working as staff. For organizations keen
to advance their missions and avoid succession setbacks, growing leaders from within is a smart start. But
doing so takes focus, resources, and action on the part of nonprofit executives, their boards, and their
funders (SSIR).
Preparing in this way is important if organizations want to progress their current circumstances.
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The manifestation of the generational leadership gap and the racial leadership gap is the product of
leaders choosing to be inactive while society transforms and evolves beyond the post-World War II
charitable norms. Undoing this habit takes complete reformation at each level simultaneously which is
only made possible by applying shared leadership.

Shared Leadership
The nonprofit sector has grown accustomed to the idea of accomplishing large tasks with very
little resources. Since some duties require a certain degree of collaboration organizations will, at times,
look outside the walls of their nonprofit to find solutions elsewhere. These partnerships usually develop
as corporate-social relationships forcing the sector to foster hierarchal leadership structures. Hierarchal
structures put an immense burden on executive directors to take full responsibility for organizational
success leaving little opportunity for lower-level staff to participate in any decision-making practices.
Shared leadership is the nonprofit sector’s chance to tackle challenges related to leadership turnover and
intergenerational concerns. Lack of development and growth opportunities rank as the second reason for
retention challenges at nonprofits and implementing shared leadership practices gives staff something to
look forward to (SSIR).
In 2011, a capacity-building initiative called Strengthening Organizations to Mobilize
Californians instructed a Leadership Learning Community that included peer exchanges for executive
directors and senior staff, regional trainings and comprehensive meetings meant to put shared leadership
into practice. The Leadership Learning Community was comprised of twenty-seven organizations and
after two years of experimentation evaluations concluded that “78% of participants had increased their
awareness, knowledge, and ability to develop staff as leaders at all levels of the organization” (Nonprofit
Quarterly). It is obvious that shared leadership works, and by ensuring the ability to develop staff as
leaders shared leadership successfully tackles the generational leadership gap and the development deficit
simultaneously. Facilitators of the Leadership Learning Community explain the success of shared
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leadership further by stating, “Many of the organizations discovered that they were able to do more
effective work with less or the same amount of funds, and reported that shared leadership eased the
stresses on executive directors” (Nonprofit Quarterly).
Shared leadership can be understood as a spectrum ranging from traditional top-down leadership
models to more inclusive models utilizing all of the talent an organization has to offer. The figure below
illustrates the spectrum of shared leadership while highlighting three key characteristics every
organization should keep in mind.
Figure 16: Spectrum of Shared Leadership ranging from one leader to many leaders at an organization.
(Source: Nonprofit Quarterly).

The three characteristics include adaptability, orientation and trust. Adaptability means being able to
occupy the right place in the spectrum for each situation (Nonprofit Quarterly). Adaptability within the
shared leadership model means being able to identify when authority should be shared and when it should
be granted to one leader. When there are programs and initiatives being planned then having many leaders
is ideal, but when there is a crisis appointing one leader to represent the organization with appropriate
talking points is more efficient. Adaptability is necessary to achieve the best results; there have to be
multiple plans and the ability for employees to know when to use which one (Nonprofit Quarterly). The
figure shows “adaptability” being represented by an arrow that freely moves from one end of the
46
spectrum to the other. It is important to note that leadership can show up in a variety of ways within the
shared leadership model. Leadership can be authoritative or all-encompassing but can also be
compartmentalized. Organizations can split leadership into teams with multiple groups tackling various
responsibilities at the same time.
Having an orientation toward shared leadership is crucial for a nonprofit to put this model into
practice productively. An orientation toward shared leadership “requires that staff be willing to see the big
picture and take ownership for the whole organization. It is more of an invitation for all staff to assume
greater responsibility and influence” (Nonprofit Quarterly). The figure shows the arrow fixed closer to the
end of the spectrum that represents “many leaders” and assigns this position as the norm for shared
leadership. Organizations that choose to adopt the shared leadership model must work to find a healthy
balance that moves away from the hierarchal structure but still incorporates a decent amount of
opportunity for potential leaders. Smaller organizations are at an advantage when it comes to
implementing shared leadership practices; they can stretch opportunities abound where a large number of
responsibilities are divided among a small number of people. This can feel like staff members are being
thrown in the deep end. But with support and coaching, the deep end can offer exciting challenges that
grow skills (SSIR). Growing the skills of potential leaders is the ultimate goal to ensure adequate
succession planning and decrease leadership turnover.
To get everyone at the organization on the same page Leadership Learning Community describes
shared leadership as an “effective way to expand the problem-solving capacity of an organization without
giving up the option of top-down approaches when necessary” (Nonprofit Quarterly). And an
organization that fails to develop its people will find it more difficult to effectively achieve its mission
(SSIR).
Trust is the final characteristic of shared leadership that organizations must embrace to be
successful utilizing the model. The figure shows trust rooted in the center of the spectrum. Trust allows an
organization to develop the relationships needed to move from one end of the spectrum to the other
without any negative impact to the nonprofit (Nonprofit Quarterly). Shared leadership allows
47
organizations to build trust since responsibilities are being spread throughout but also requires a certain
degree of confidence in order to implement this model in the first place. Without a stable foundation of
reliance and dependence of one another, shared leadership is impossible.
Because of the disconnect between generations and the development deficit, the nonprofit sector
has fallen into an even greater disparity that is characterized by the racial leadership gap. Tackling all of
these issues at once is the answer to establishing diversity while fixing the challenges that caused a
homogenous leadership structure.

48
Building Capacity Toward an Equitable Future
The nonprofit sector’s struggle with dismantling essential gaps in leadership has proven to be a
systematic issue perpetuated by implicit bias and maintained by the generational divide amongst leaders
and their potential successors. However, there are steps that organizations can take to relieve themselves
from these disparities. Capacity building has become a solution to these problems and when done
effectively it strengthens a nonprofits ability to fulfill its mission over time, thereby enhancing the
nonprofits power to have a positive impact on lives and communities (National Council of Nonprofits). In
order to sustain its position in society and achieve moral responsibility, the nonprofit sector must actively
work to enhance the current state while simultaneously fulfilling individual missions. This endeavor is not
a minute obligation especially when considering the array of challenges an organization regularly
encounters. Robert Montgomery, a contributor to Points of Light explains:
Nonprofits and government agencies’ abilities to solve societal issues are often constrained by
organizational capacity. When your roof is leaking, you focus on the immediate issue of repairs
and may put off a much-needed basement remodel. The same can often be said for capacity
building initiatives; they take time, resources and staff capacity that many nonprofit organizations
don’t feel they have, even if it would pay off in the long run (Points of Light).
Avoiding important issues has placed the nonprofit sector into a compromising position, and
organizations are being forced to develop and reinforce many tasks at once. Fortunately, there have been
prominent people and organizations offering advice for the nonprofit sector to use as leverage in their
journey toward fastening loose ends.

The Case for Collaboration
The 2017 Conference on Volunteering and Service hosted by nonprofit consulting organization
Points of Light, featured a capacity building track in which three significant trends showed up as viable
recommendations for nonprofits to focus on. One trend the conference encouraged attendees to focus on
49
was collaboration. Bea Boccalandro, president of Vera Works promoted the concept of expanding impact
by focusing on cultivating integrative partnerships. These partnerships would ultimately be characterized
by the success of both the nonprofit and the corporate organization simultaneously (Points of Light). This
idea is discussed in tandem with the suggestion that nonprofits should collaborate with other nonprofits as
well and doing so while eliminating the need to rival with one another. “Too often, nonprofits feel that
they are competing against one another and therefore cannot truly collaborate,” Montgomery explains
(Points of Light). Because the sector is oversaturated with many repeating missions, individual
organizations often feel the need to focus their efforts on being better than a direct opponent. Reaching
full capacity denotes that there is strength in numbers and organizations are better suited when they are
willing to share the possibilities. Collaboration is at the forefront of communal success and the operations
at certain nonprofit organizations proves this notion to be true.
The Africa Yoga Project is a nonprofit organization that focuses on teaching and training
successful yoga practitioners in Kenya. Their vision is to create opportunities for the youth to step into
their greatness and become self-sustaining leaders in their communities (Africa Yoga Project). The Africa
Yoga Project perfectly embodies the way that collaboration offers a positive contribution toward building
capacity at an organization. Each one of the nonprofit’s initiatives and programs involve the entire scope
of the organization and promote a supportive and healthy environment in which every voice is heard and
included. The Africa Yoga Project Mentor Program was developed to create a bridge between aspiring
Kenyan teachers and individuals all over the world. Mentors from the United States, Canada, Australia,
and Europe are paired with an Africa Yoga Project yoga teacher to offer expertise and advice on
leadership and business skills. The program has grown significantly since its inception which has allowed
the Africa Yoga Project to consistently build capacity within their staff (Africa Yoga Project).
Furthermore, the Africa Yoga Project has partnered with a variety of other nonprofit organizations such as
UNICEF, a humanitarian aid organization and Australian Aid, an Australian government agency.
It is important to realize how diverse these efforts are and how the collaboration element goes
beyond the continent of Africa. Shareholders of the African Yoga Project experience the wealth of
50
resources that the organization has to offer but are also challenged by the complexity of those resources in
a positive way. A 2006 study conducted by Samuel Sommers, a social psychologist from Tufts University
concluded that homogenous groups of people were less likely to consider factual data, perfectly recall
information, and openly discuss the role of race when it comes to decision-making (Sommers). Thus, a
diverse workplace encourages more thought-provoking discourse and meticulous analysis that is
necessary to maintain the support of stakeholders and the trust of the community.
When the people that shape the values and activities of an organization such as the board of
directors and the employees, come from a wide array of backgrounds, they each bring unique perspectives
that shape, blend, and influence how to advance the mission and solve problems in potentially more
inclusive and innovative ways (National Council of Nonprofits). A variety of key players enhances the
possibility of complex partnerships and makes space for inventive thinking. In this model, partnerships
and collaboration can go further than corporate social responsibility. The labor of capacity building
requires a group effort and collaboration is key on an internal level to ensure that each member of the
organization receives the support they need to fulfill their contribution in advancing the nonprofit’s
mission. While it is time-consuming, capacity building should be considered an investment in the
effectiveness and future sustainability of a nonprofit and thus, embedded in the operations of leadership
and staff (National Council of Nonprofits).

Becoming Data-Driven
The Conference on Volunteering and Service presented quantitative data as a capacity building
trend meant to reinforce organizational success. The conference focused on the importance of leveraging
data in strategic and creative ways as a means to seeing real community impact, not just a shift in
numbers (Points of Light). Quantitative data is also important for members to understand where to
provide more oversight in the organization; data is also the driving force behind a lot of major donors and
grant opportunities. Offering qualitative data is useful internally but applying it to actionable tactics is
51
difficult; real strategy lies in setting numeric goals.
Founder and Executive Director of the Africa Yoga Project, Paige Elenson saw that 70% of the
youth in Kenya were unemployed and decided to turn this statistic into a business plan by establishing the
Africa Yoga Project (Africa Yoga Project). Elenson’s personal background in yoga gave her the idea to
provide people in the Kenyan community with the means to work and participate in wellness activities.
Elenson successfully developed her business idea by focusing on the data.
The global wellness industry is a $3.7 trillion market and the World Health Organization
estimates that by 2030, the death toll from chronic diseases will equal that of malnutrition, infectious
diseases, and maternal and newborn deaths in Kenya (Africa Yoga Project). Promoting these numbers
have allowed the Africa Yoga Project to sustain their narrative and grow their organization tremendously.
The data is straight-forward and can easily transform into an array of initiatives and programs that
efficiently fulfill the organization’s mission. Having the literature that conveys an organization’s care
toward a cause is meaningful but a direct and measurable assertion is usually received better by the
public.
Since Elenson began the Africa Yoga Project in 2007, over 6,000 people participate in more than
360 community yoga classes weekly in 80 locations. Over 400 Kenyan youth are earning a living wage by
teaching yoga (Africa Yoga Project). These numbers essentially portray the benefit of focusing on
quantitative data that enhances the strategic focus and furthermore, creates a productive future for a
nonprofit. The National Council of Nonprofits claims that capacity building is “important because it
enables organizations and their leaders to develop competencies and skills that can make them more
effective and sustainable, thus increasing the potential for charitable nonprofits to enrich lives and solve
society’s most intractable problems” (National Council of Nonprofits). Being numbers driven allowed the
Africa Yoga Project to have a plan and cultivate that plan for annual, exponential growth.
Applying this trend to the dismantling of the racial leadership gap is appropriate for two reasons:
nonprofits will be forced to take an honest look at their own contribution to the disparity and will also be
able to plan out how to fix it for the future. The Africa Yoga Project is considerably diverse with people
52
of color occupying management, director, and fundraising positions. Approximately 92% of the team
members are people of color which is an overwhelming majority. If that number was lower and the
organization’s performance was not functioning at full capacity, they could set a goal to increase the
number of diverse employees on their team. The National Council of Nonprofits explains, “that
embracing diversity, equity, and inclusion as organizational values is a way to intentionally make space
for positive outcomes to flourish. Starting with honest internal dialogue that encourages staff and board
members to reflect, listen to each other, and learn from one another’s experiences” (National Council of
Nonprofits). Charting quantitative data makes it easier to see the bigger picture and reflect on what needs
to change in order to move forward. Honest internal dialogue is direct, permitting the task of making
positive outcomes to flourish more intentional than coloring the issue with inclinations that do not create
actual results. The difference between quantitative data and qualitative data is that qualitative data is not
as objective. Qualitative data is the observation of phenomena and people come up with their own
thoughts, attitudes, experiences, and beliefs about things; therefore, making it less purposeful (Very Well
Mind). Within the process of building capacity and filling essential gaps the nonprofit sector has no room
for biased opinions, thus perpetuating real outcomes requires impartial thinking rooted in quantitative
data.

Volunteers Are Valuable Assets
The third trend for building capacity at nonprofit organizations presented by the Points of Light
conference encouraged the use of free resources. The nonprofit sector is obviously at the mercy of the
public’s approval when it comes to accepting volunteers, but the conference suggested taking full
advantage of volunteer potential. Volunteers can provide up to 500% greater value to nonprofits than the
value of traditional volunteering, by supporting needs such as general operations, technology and
professional services (Points of Light). There is a lot of opportunity in putting time and attention toward
skill-based volunteer services, it is a risk that many nonprofits do not have the aptitude or resources to
53
pursue, but there are ways to include volunteers productively.
Africa Yoga Project’s trainees complete teacher training and are immediately employed to
instruct over 300 free classes a week (Africa Yoga Project). In this way the Africa Yoga Project has
established a volunteer program into their organization which gives their immediate beneficiaries the
opportunity to contribute to the overall mission. Kimberly Dulin, contributor for Catch a Fire nonprofit
resources blog describes skills-based volunteering as the “intersection of passion and purpose”. Skills-
based volunteering allows professionals to contribute to a cause they are passionate about while honoring
their skills, building their resumes, and expanding their resumes (Catch A Fire Blog). Recruiting skill-
based volunteerism can be perceived in a similar manner as establishing a group of individuals to carry
out specific job functions such as independent contractors, in order to gain viable experience. The cost of
working with skill-based volunteers is lower than bringing in a consultant or a new employer and
organizations still get an incredible project from a professional. Skill-based volunteering also allows the
organization to develop professionally because hours of the day are being saved since projects are getting
outsourced (Catch A Fire Blog).
This trend underscores the collaboration element that is essential to building capacity at a
nonprofit organization. Creating an “all hands on deck” experience forces more key players to get
involved and contributes to the task of closing essential gaps. This is where inclusion manifests and racial
bias falls by the wayside. Capacity building allows organizations to reinforce their mission and vision
statements while growing from within and laying the foundation for a promising future.

Equity Is the Next Step
After understanding what has led up to the racial leadership gap and identifying the key players’
attempts at dismantling systematic racial bias within the nonprofit sector, a diverse future can realistically
be actualized. Actionable strategy leads to measurable results and there is enough data presented by the
Race to Lead study proving the need for innovation. For some organizations the moral imperative of
54
equity may be enough to spur action. (National Council of Nonprofits). Equity is a separate concept that
relates to diversity and inclusion but evokes a distinct nuance. Ellen Gutoskey defines equity by stating, “
to be equitable means to divide resources proportionally to achieve a fair outcome for those involved”
(Mental Floss). It is different from being equal because equality does not consider the specific needs of
certain groups of people. A key takeaway from examining implicit bias within the nonprofit sector is that
the future will require heightened awareness to these issues. The National Council of Nonprofits exclaims
that it is important to remember the complexities of diversity. Race is not just one dimension of diversity;
it can show up in gender, sexual identity, nationality, socioeconomic status, education attainment, veteran
status, age, physical ability, and many more expressions of identity (National Council of Nonprofits). The
racial leadership gap exposed a variety of deficits within nonprofit organizations and it is important to
consider each and every possibility moving forward.
Tackling the racial leadership gap and making organizations more diverse is only worthwhile
when prioritizing equity. Therefore, the nonprofit sector has an added responsibility that requires an
intense sense of compassion and the courage to accept that good leadership will look different for each
individual organization. Many people may view the scrutiny toward the nonprofit sector as contempt
toward a homogenous white majority, but inclusion is the focus. It is possible for white leaders to remain,
but the existence of an effort toward diversity is necessary. Mary Rollins does not believe that having the
same experiences as an organization’s constituents creates good leadership. She also does not believe that
good leadership is based on sympathy:
Organizations should learn and understand the needs of the population they serve and constantly
explore, with the people they serve, the best way to meet those needs. There should be constant
evolution of the self and by an outside professional body. It is always essential to look at does
your organization mirror the community and is leadership listening to hands-on staff realizing the
responsibility of seeing the big picture.”
The racial leadership gap is defined as a structural problem and seen as a systematic failure by industry
professionals simply because nothing is being done to fix it. By implementing the ideas presented by
55
Robert Bellah as he defines community, the nonprofit sector will guarantee the success of its
organizations and be looked upon as an honorable establishment fulfilling their moral and social
responsibility.
56
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Abstract (if available)

Abstract The nonprofit sector is often seen as the prototype for establishing ethics in society. Individuals and corporations seek nonprofit partnerships and resources in order to thrive in ways they normally would not be able to do, but when the nonprofit sector is lacking in essential functions these offerings are not beneficial and the nonprofit sector fails to serve as an entity providing checks and balances to the overall flow of this capitalist civilization. ❧ An essential function that has been highlighted in recent years is the racial leadership gap and constituents of the social sector believe that people of color are barred from leadership positions on purpose. By exploring what has led to the racial leadership gap at nonprofit organizations it will be revealed that this disparity is not, in fact, systematic

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Asset Metadata

Creator Ector, Schyler (author)

Core Title Exploring what has led to the racial leadership gap within the nonprofit sector

School Annenberg School for Communication

Degree Master of Arts

Degree Program Strategic Public Relations

Publication Date 07/21/2020

Defense Date 07/20/2020

Publisher University of Southern California (original), University of Southern California. Libraries (digital)

Tag Board Members,capacity building,development deficit,generational leadership gap,leadership positions,nonprofit,nonprofit boards,nonprofit sector,OAI-PMH Harvest,racial leadership gap

Language English

Contributor Electronically uploaded by the author (provenance)

Advisor Yang, Aimei (committee chair), de la Fuente, Jennifer (committee member), Floto, Jennifer (committee member)

Creator Email ectorschyler@gmail.com,sector@usc.edu

Permanent Link (DOI) https://doi.org/10.25549/usctheses-c89-335451

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