GoFundMe agrees to acquire Classy, unlocking new opportunities for nonprofits. Learn more.

How a Balanced Board Protects Your Bottom Line


By Will Schmidt

Rocks Balanced

Request a Demo

Learn how top nonprofits use Classy to power their fundraising.

Schedule a Demo
Reading Time: 5 minutes

Join me in a thought experiment for a second. You’re a hiring manager, and you have to make a final hiring choice between two identically qualified candidates. One is a man, the other, a woman.

Whom do you hire? Is there a right or a wrong choice? Truthfully, it all hinges on the current diversity makeup of your nonprofit organization and your agreed upon diversity standard.

An all-female or male dominant organization isn’t optimal—the key to success is balance. That’s because men and women bring different skills to the table that complement each other.

A nonprofit with a mix of male and female leaders, with their differing attitudes regarding risk, collaboration, and ambiguity, will outperform a competitor that relies on the leadership of a single sex. Here’s how you can start thinking about gender equality in your nonprofit.

Current Diversity in Nonprofit Leadership

For the most part, women run small scale nonprofit organizations. Opposite that, men generally run the highest grossing nonprofits and nonprofits with the largest budgets.

Women tend to make up 43 percent of nonprofit boards. However, that number sinks to 33 percent when you look at the board of a nonprofit with an income of $25 million or more.

This is problematic because a lack of gender diversity at the leadership level can limit their collective perspectives. Without different viewpoints, it can be more difficult to assess the best, next move.

Further, nonprofits without diverse workforces face higher employee dissatisfaction, which leads to high turnover. You feel the repercussions from a lack of diversity throughout the organization.

If your nonprofit builds gender diversity into the organization at a top level, it can have positive effects as it trickles down to the rest of your organization. So, set the tone for your organization at the top: the board.

Diversify Your Board

Researchers at Wake Forest University examined more than 2,000 publicly traded companies over a 13-year period to investigate how gender diversity affects the board. They found that gender diversified boards, as opposed to homogenous boards, were more risk averse and more likely to provide an ROI for stockholders.

Gender diversity at the board level opens the doors to better relate to, emphasize with, and understand two main groups. First, a more diverse board will be better suited to ascertain your beneficiaries’ needs and wants. Second, the more diverse your board and overall staff, the more likely you are to be in tune with your diverse supporter base.

In the corporate world, gender equality at the board level is associated with more customers, increased sales revenue, greater profits, and greater market share. There’s no reason to believe that the same benefits wouldn’t apply to the nonprofit sector as well.

In addition to these benefits, a diverse board can directly impact additional areas of your organization. Specifically, it touches finances, talent attraction, and employee retention.

The Financial Benefit

Despite the fact that nonprofit organizations with the largest budgets tend to be run by men, the financial benefit of having women on your nonprofit board is, honestly, staggering. At the top level, having women on your board:

  • Reduces your risk of bankruptcy by 20 percent
  • Outperforms share prices of comparable, non-female led companies by 26 percent
  • Increases return on equity by 53 percent
  • Increases company adherence to board strategy by 42 percent

This financial success at the board, then, flows down to the rest of your organization. Higher revenue leads to better work environments, more employee pride, and more opportunities for growth.

Attract and Keep Talent

Nonprofits that balance their gender diversity tend to have an easier time accessing the widest possible talent pool, as they don’t close themselves off from any one type of person. Set the example at the board level for gender diversity. Much like financial success, it will flow down to the rest of your organization in the form of hiring decisions.

Diversifying your workforce means your employees feel valued for their individuality and the unique contributions they bring to the table based on their specific perspective on life. The end result is a nonprofit that inspires loyalty and pride, which encourages employees to stay on for longer.

Additionally, female leaders can help to attract more talent at your organization because they may be better suited to anticipate employee needs. According to Lindsey Lathrop-Ryan, Advisor for Community Engagement at Change the Story VT, female leaders advocate for things others might not consider, like paid family leave, flexible workplaces, and opportunities to ensure women have ample opportunity to be heard.

When it comes to attracting and retaining top talent, diversity is important because it incorporates these multiple, different perspectives. If nonprofit organizations make this a priority, it will shape the future of diversity of the nonprofit sector and ensure it’s even easier to maintain.

The Future of Diversity

A current trend in the professional world is publishing data and statistics around organizational diversity as a way to indicate their core values. Take Buffer, for example. They have a diversity dashboard that presents data in real time by age, race, gender, ethnicity, and department.

gender equality Buffer diversity dashboard
Buffer’s diversity dashboard

According to Lathrop-Ryan, there’s an incredible amount of value behind data like this. It’s most useful in the hands of those in power positions, so they can make informed hiring decisions. This push for gender diversity, as she says, has to come from the top-down.

There has to be diversity metrics tied to your hiring needs. The CEO or leader needs to articulate that it’s a priority.

Lindsey Lathrop-Ryan

For example, if you’re a hiring manager, and you have an opening, a tool like Buffer’s diversity dashboard is a great way to keep your diversity needs top of mind. It guides management, recruiting, hiring, and promotions.

Lathrop-Ryan has seen this approach succeed beyond theory, in the real world. This access to diversity data was crucial for the Vermont Energy Investment Corporation.

They saw that the women working for their organization were more dissatisfied than the men in some areas. Therefore, it prompted an investigation into their employee experience, which they are improving for the women working with them.

The Vermont Energy Investment Corporation is a shining example of how the gender equality process starts at the top and impacts the entire organization as it flows down. The leaders identified a diversity issue, adapted a solutions to fix it, and continue to be engaged in increasing job satisfaction for women.

At the end of the day, diversity isn’t a trend or a fad. It’s a topic that’s here to stay and it’s the way the new workforce of the world thinks.

What’s important to remember is that a successful gender equality effort depends on balance. It’s about hiring the right person for the job and keeping the balance in mind. Make sure your new team members bring something new to the table that the opposing sex might not be aware of. It’s a complementary process, not a competition.

Gender equality is difficult to talk about sometimes, and this article is a very brief glance into a complex world. Thus, there’s always more to explore and research. The more you can do now to learn about gender equality and keep it top of mind for your organization can only help in the long run.

A Leader’s Guide to Motivating Employees

Subscribe to the Classy Blog

Get the latest fundraising tips, trends, and ideas in your inbox.

Thank you for subscribing

You signed up for emails from Classy

Request a Demo

Learn how top nonprofits use Classy to power their fundraising.

Schedule a Demo

Pin It on Pinterest