Six Governance Steps Nonprofits Can Take to Advance DEI Goals

Nilan Johnson Lewis PA
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A recent study found that nonprofit boards are 78.6 percent white. That means nonprofit boards do not reflect the make-up of the American population or the constituents these nonprofits and foundations serve. The National Council of Nonprofits has acknowledged the critical importance of diversity in nonprofit governance, saying:

With a diversity of experience, expertise, and perspectives, a nonprofit is in a stronger position to plan for the future, manage risk, make prudent decisions, and take full advantage of opportunities. A diverse board that is also sensitive to cultural differences is usually one that has a stronger capacity to attract and retain talented board members – as well as to be in touch with community needs.

Though diversity, equity and inclusion (DEI) discourse has recently been present in programming, foundation gifting, and other industry lenses, community foundations are looking for new ways to take active steps towards deepening their DEI commitment, including an examination of board memberships.

One novel step that a community foundation can take towards signaling a deeper commitment to DEI is to tackle equity head-on through its governance documents. Nonprofit boards follow a set of rules that govern how their board members are elected and the manner in which they serve. These rules are called Bylaws. Bylaws and policies serve as the basis of an organization’s operations and should promote (or at least not hinder) the organization’s fundamental ideals, including DEI. A review of Bylaws and policies may reveal that they speak to audiences who do not represent the organization’s diverse constituents in the community. They may even be exclusionary.

Here is a roadmap for a community foundation (or any nonprofit) when thinking about updating governing documents with an eye toward promoting the organization’s DEI goals.

1) Build a Common Understanding

A good place to start is to facilitate a collective understanding of the purpose of the organization’s Articles and Bylaws, so that they can be reoriented to serve the audience. Articles are written to comply with state and federal requirements for corporate status and federal tax exemption. Discussion of the Articles should therefore be limited to understanding their purpose and ensuring that Articles succinctly state the organization’s mission and don’t prevent DEI advancements in the Bylaws. More importantly, Bylaws are the rules by which a nonprofit’s Board of Directors and key leaders have agreed to run the governance of the organization. Board members should consider their common expectations about how they want to govern together and how their role in governing relates to the overall organizational mission. In particular, this is where the board should consider how the requirements in the Bylaws, policies, committee structure, and more impact equal access and diversity in the governance of the organization.

2) Reorient Documents

Bylaws (especially long-established nonprofit/community foundation bylaws) are often unnecessarily oriented toward donors rather than the community. Boards should consider ways to remove or reduce emphasis of language focused on donors and donor relationships. Reorienting Bylaws to focus on the community served rather than donors can shift everyone’s perspective towards diverse constituents and inclusive governance. For example, restrictive policy language about donor gifts can be deemphasized, while simultaneously highlighting the organization’s commitment to being present in the community and listening to diverse voices. Changing the order of provisions within the Bylaws may also have the effect of shifting the focus.

3) Eliminate Barrier Language

Work with a diverse team to identify and eliminate language that feels like “legalese” and processes that are unnecessary. Attorney writing may be full of implicit bias and should be analyzed from that perspective. In addition, by its unnecessarily wordy and unreadable nature (unintentionally) it excludes people from governing. If Bylaws and policies are to represent an organization’s collective expectations, they need to be welcoming to all people. For example, it’s important to examine language around legal powers, process requirements and eligibility requirements around committees or board membership and how that language may be exclusive.

4) Require a Process

Requiring a deliberate process around recruiting for board and committee structures can help build equity into the organization and disrupt the pattern of doing things how they have always been done, by people who have always done them. For example, as part of the committee process, consider a requirement to include non-board members who can help an organization identify talent outside the organization’s current circles that is reflective of the communities served. Require a report with action items exploring other ideas to increase board diversity. Consider adding a provision allowing periodic non-Chairperson leadership of the board to build internal leadership muscles.

Our organization conducts a survey of board members, so we understand the demographics, skills, and experience of our board. Our governance committee uses this information to recruit more thoughtfully and to fill our board with multidimensional individuals who enrich the organization. – Veena Iyer, Executive Director, Immigrant Law Center of Minnesota.

5) Eliminate Barriers to Service

When considering economic diversity, consider barriers to board service that are often baked into Bylaws and board policy. Think about meeting times, prohibition on board compensation, and length of board terms. For example, hourly workers may be less able to shift work hours to accommodate board meeting times, and parents of young children may lack childcare during key hours. Consider whether potential board members have access to proper internet resources and private space for remote meetings. Prohibiting compensation for board service can be a significant barrier to those with lower compensation and hourly workers who can’t recover wages lost for board work. Seek feedback from an outside group of non-exempt and low-wage workers to further examine barriers to board service. Consider term limits for board service to increase opportunities.

Establishing term-limits is not just good governance practice; it’s a great DEI practice. Since our organization established term limits, our board has become more racially and financially diverse. – Veena Iyer, Executive Director, Immigrant Law Center of Minnesota.

6) Neutralize Gender Specific References

There’s clearly a growing trend, particularly among future leaders, that rejects traditional concepts of gender as an either/or identity and embraces non-binary expressions. To demonstrate a commitment to inclusiveness, consider neutralizing pronoun usage in governance documents – for example, using “they” or descriptive nouns for he/she.

Community foundations continue to struggle to remain relevant and vital. Incorporating DEI language into a foundation’s organizational governing documents is hard but undertaking the work will signal a community commitment. It will also make the organization more effective at achieving its mission of servicing the community and meeting the needs of future generations.

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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