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The Value of Community and Diversity in the Nonprofit Sector

The National Council of Nonprofits identifies 29 types of organizations that the government considers nonprofits for tax purposes. While each of those types of organizations likely has a different mission statement, they all have one very important thing in common: they all work to improve the world.

That focus on community and diversity means it is important for nonprofit staff to reflect the demographics of the population they work for. Racial diversity, in particular, is something that nonprofits struggle to achieve, according to a 2014 study by Community Wealth Partners at the request of the Annie E. Casey Foundation.

The study found that people of color represent 30 percent of the total American workforce but only 18 percent of nonprofit staff and 22 percent of foundation staff. That number gets even smaller when evaluating the racial makeup of nonprofit leadership and governing boards.

Why Diversity Matters

The researchers involved in the Community Wealth Partners study write that the “gap in (racial) diversity across staff and leadership in the sector reflects a lack of diversity in perspectives and backgrounds that could help organizations better understand the market and adapt and innovate strategies.” A report from Third Sector New England cites studies that reveal the following benefits of diversity among nonprofit staff:

  • Enhanced creativity.
  • Better communication.
  • Faster problem-solving.
  • Enhanced programs and services.

These findings indicate that not only do community and diversity matter when it comes to relating to, empathizing with and understanding communities’ needs and wants but also that a nonprofit can see benefits simply by reflecting the diversity of their communities in their staff.

Diversity and Community Matter to the Bottom Line

A 2013 Catalyst report cites a study of for-profit businesses that found “a racially diverse workforce was positively associated with more customers, increased sales revenue, greater relative profits, and greater market share. The study also examined gender diversity and found it to be positively associated with increased sales revenue, more customers, and greater relative profits.” There is no reason to believe that the same benefits would not apply to the nonprofit sector. After all, a nonprofit that serves a community and relies on community support for donations would benefit from representing the community they serve.

However, the repercussions of limited diversity go beyond the obvious. A 2013 article in the Stanford Social Innovation Review discusses a study that found nonprofits without diverse workforces faced higher employee dissatisfaction, which leads to more frequent turnover. That, in turn, means organizations have to hire and train new employees, which is a costly undertaking.

How Can You Increase Diversity in Your Nonprofit Workplace?

More than 500 nonprofits surveyed by Nonprofit HR Solutions for the 2013 “Nonprofit Employment Trends Survey” found that while a strong majority believed diversity in race, gender and age was important to their organization, only 37 percent had a formal workforce diversity strategy in place. It might not be easy to talk about and address the need to diversify your staff and board of directors, but students in a Master of Science in Nonprofit Administration online program can graduate with the real-world knowledge and management tools needed to lead these discussions.

Understanding the community and its diversity are important in every facet of the nonprofit sector, but achieving diversity can be a struggle, as evidenced by the percentage of people of color in the nonprofit workforce and on boards of directors. By learning how to communicate with staff, leaders and boards about the importance of the issue, you and your nonprofit can both succeed.

Learn more about the LSUS online MS in Nonprofit Administration program.


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