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Perceptions of Diversity in the Nonprofit Workplace

This article is a summary of The Voice of Nonprofit Talent: Perceptions of Diversity in the Nonprofit Workplace (17 pages PDF), a report co-authored by Robert Schwartz, executive director of the Level Playing Field Institute; James Weinberg, founder and CEO of Commongood Careers; and Alison Scott and Dana Hagenbuch, also of Commongood. The report draws on a survey of 1,638 current and former nonprofit employees to gauge perceptions of diversity in the nonprofit sector.

Organizational Diversity: A Time for Action

Across the nonprofit sector, most employers share the belief that racial diversity is a key component of organizational health, performance, and outcomes. Yet, according to today's nonprofit workers, few organizations are doing enough to attract and retain professionals of color.

Numerous studies have demonstrated the underrepresentation of people of color in nonprofit leadership roles. Today's nonprofit employees are approximately 82 percent white, 10 percent African-American, five percent Hispanic/Latino, three percent other, and one percent Asian or Pacific Islander. In the general U.S. population, however, 30 percent are people of color — a figure that is expected to grow to 50 percent by 2042. The Hispanic/Latino population is one of the fastest-growing minority groups in the country, currently representing 15 percent of the overall population. These demographic trends are already contributing to changes in the labor pool. Within the next five years, for example, more than 43 percent of new entrants to the workforce will be people of color.

When examining organizational leadership, the gap persists. According to a 2006 report by the Nonprofit Leadership Alliance, up to 84 percent of nonprofits are led by whites, while 95 percent of philanthropic organizations are led by whites. There also appears to be a barrier to advancement within senior management: people of color hold 15 percent of deputy director positions but only 10 percent serve as executive directors. According to two national surveys of nonprofit leadership, people of color are significantly more likely to be an organization's primary clientele than they are to be its executive directors or deputy directors.

The key questions our survey addressed were: How committed are nonprofit organizations to creating racially diverse and inclusive work environments? What does it take to effectively recruit and retain employees of color? How do workplace demographics play into perceptions of staff inclusiveness and impact career decisions, especially among people of color? And why do many people of color choose to leave organizations and, in some cases, the sector altogether?

Obstacles to Creating Staff Diversity

A 2008 report by the Johns Hopkins Institute for Policy Studies found that organizations report that it is nearly two to three times as difficult to recruit people of color in fundraising, program, and other functional areas. Among the most common recruitment challenges are poor access to diverse networks, interview methods that fail to demonstrate an organization's commitment to diversity, and rushed hiring processes that do not allow for adequate time to develop diverse candidate pools.

Retention obstacles. As described in LPFI's 2007 Corporate Leavers Survey, many employees of color experience the presence of bias and unfair treatment in the workplace, which leads to employee turnover and the related financial costs for companies and organizations. The costs associated with recruiting and filling a vacancy, including lost productivity and the cost of training a new employee, can range from 30 percent to 150 percent of an employee's salary.

Prioritization obstacles. Numerous studies and articles have suggested that the commitment to diversity must come from the top. More often than not, when staff diversity is not regarded as an urgent priority, leadership does not take ownership over the issue and resources are not allocated to properly support diversity efforts.

The Negative Cycle of Inaction

Data from the survey indicate that diversity is an influential component of recruitment and retention within the nonprofit sector. The significant disconnect between the value placed on diversity and the actions taken to diversify nonprofit organizations perpetuate a cycle with several negative outcomes:

Inability to attract employees of color. In an attempt to create more diverse staffs and boards, many prospective employers seek to recruit diverse employees. As the survey highlights, the top indicator of an organization's commitment to diversity is the presence of diverse staff at all levels of the organization. If an organization is unable to show diversity on its team, prospective candidates of color may be less likely to join that organization. This is manifested by candidates withdrawing during the interview process, or even choosing not to apply at all.

Increased employee dissatisfaction. If diversity is not represented on staff, employees of color may experience a sense of tokenism or alienation in the workplace. Even within organizations that have multicultural staff, many employees of color have reported perceiving bias in the form of lack of professional development or upward mobility opportunities. Employees who perceive even subtle forms of bias — such as feelings like they are treated differently than their colleagues — are more likely to feel demoralized, which can have negative repercussions on employee productivity, output, and retention.

Inability to retain top talent. As the economy begins to improve, the sector will inevitably experience shifts in employee retention, as well as more competition between organizations for talent. For professionals of color who place a premium on the importance of diversity and inclusiveness in their career choices, this could mean higher attrition rates amongst previously dissatisfied employees who have been "sitting tight." As employees leave, organizations experience the financial costs of attrition — up to 150 percent of an employee's salary — as well as collateral damage to remaining employees' morale and productivity.

Without a clear and comprehensive commitment to racial diversity reflected throughout the organization that is being acted upon with results, nonprofits will have difficulty recruiting and retaining diverse employees. Maintaining a diverse staff, particularly at the management level, is the clearest indicator for employees and potential employees of color an organization's commitment to diversity and inclusion. The impending loss of the few people of color on a nonprofit's staff will only exacerbate the challenge in recruiting and retaining other diverse employees. If nonprofits don't address the frustrations of professionals of color, they may find themselves losing — as well as being unable to compete for — talented employees who contribute to organizational diversity.

Strategies for Making Change

The findings of this report, as well as insights gained from interviews with nonprofit employees and leaders, indicate a few key strategies for organizations with a genuine and fundamental commitment to enhancing diversity.

Have open conversations that lead to clarity, consensus, and commitment. Open conversations about race can be difficult. A thoughtful process can help get past initial discomfort and result in an exchange of ideas that allow for issues related to race, bias, diversity, and inclusion to enter the conversation. The Race Matters toolkit created by the Annie E. Casey Foundation provides a number of resources to help start these conversations.

One strategy for promoting results-oriented communication is to form a committee that is charged with conducting organizational assessments, structuring staff conversations, organizing trainings, and ensuring that recommendations are implemented. Some organizations may also consider external expertise from professional consultants. An objective third party can often help teams flag existing forms of racial bias and barriers, mitigate conflict, and come up with a shared language for talking about race.

Although every element and constituent group within an organization should be fully engaged in such conversations, none may be as important to include as executive leadership. There is no substitute for a vocal and passionate CEO or executive director within any organizational change process. A nonprofit whose employee base is passionate about diversity but whose leadership is passive on the subject is likely to encounter internal tension and fail to achieve its potential for inclusiveness. On the other hand, an organization whose values flow clearly and directly from the top, and whose executive commitment to diversity matches or exceeds the expectations of its employee base, is likely to continue to improve in its diversity efforts.

Communicate effectively about diversity commitments. Many nonprofits that claim to "value diversity" have not actually defined what diversity means for their organizations and why they consider it to be important for their ultimate success.

One outcome of open conversations among staff members should be an organizational diversity statement and plan. It is essential for nonprofits to be able to communicate their beliefs and practices in this area to current and future employees, as well as to constituents, volunteers, funders, and other stakeholders. In the diversity statement, the greatest clarity possible should be used to explain how the organization defines diversity, why and to what extent it values diversity, what its goals are related to diversity, and what strategies it uses to pursue those goals. Language from the diversity statement should be used externally wherever possible. Such communication platforms may include dedicated treatment on a Web site, mention in brochures and collateral materials, statements within all job postings, even notations within e-mail signatures and voicemail greetings, when appropriate.

The essence of this strategy is to define diversity as one of the key elements within an organization's overall brand as well as its specific position as a desirable employer within the sector. When people think about the organization, diversity should be one of the top things that comes to mind and there should never be any reason for someone to doubt the sincerity of their commitment.

Peter Drucker once famously remarked that "what gets measured, gets done." It speaks volumes if an organization can show what it is actually doing and what the results of those efforts to date have been, regardless of how far it still has to go to achieve its goals.

Develop partnerships and networks that facilitate effective recruiting. Building talent pipelines requires dedicated time, resources, and effort regardless of what population is being targeting for recruitment — be it people with certain educational or experiential backgrounds or people of a certain age, gender, race, or religion. Although it is against federal and state law in many areas to base hiring decisions on anything other than what the job requires in order to be performed, these laws generally do not prevent employers from conducting targeted recruitment efforts in order to ensure that diverse candidate pools are considered for every hire.

The most effective and targeted recruitment strategies involve partners. Consider who already represents the community that you are targeting. In order to recruit a diverse candidate pool, reach out to specific professional associations, educational institutions, alumni networks, religious groups, cultural societies, clubs, websites, listserves, and publications.

Examine what relationship structures might allow for the mutual benefit for all involved, especially those that involve an exchange of information, ideas, and valuable perspectives. This may involve efforts such as a nonprofit coming onto a college campus to offer workshops or writing regular articles for an online magazine — strategies to get the word out about its work and its employment opportunities to a given population.

In some instances resources may need to be expended to pay for advertising or attend recruiting events. Set a budget for these activities and justify the expenses in terms of the organizational benefits that having a diverse team will produce. Experiment over time with opportunities as resources permit and track the effectiveness of these investments in terms of the quality and volume of candidates that they generate.

Many organizations also build and leverage advisory committees comprised of staff, volunteers, and/or community members to help them evaluate and execute various recruiting strategies. Engaging such champions will not only help inform the creation of a plan, but can also lend significant credibility to the effort.

Ensure hiring processes that are equitable and inclusive. It is critical for any organization that strives to create true diversity to take thoughtful steps to ensure that unintentional bias doesn't affect hiring processes. Specifically, it is important to audit hiring-related policies and practices for subtle cues that could be interpreted as biased, unfair, insensitive, or offensive.

In our survey, a number of candidates reported sensing subtle forms of bias during interviews. Biases enter at each step of the hiring process, starting with the job description. If your organization serves a diverse or underrepresented community, it is important that the job description list experience successfully managing diverse teams or working with your target population as a requirement. This is the quickest way to reshuffle the applicants, replacing experiences that often reflect bias (e.g., graduation from Ivy League schools, unpaid summer internships) with those that are directly related to accomplishing the job for which you are hiring.

To mitigate the potential of bias in the application review and interview processes, hiring managers should focus on a candidate's core competencies — the skills, knowledge, technical qualifications, and personality attributes required to do a job. Core competencies remove subjectivity by assessing a candidate's potential based on demonstrated past experience, as opposed to a hiring manager's interpretation of a candidate's potential.

During the interview process, organizations should ask questions that revolve around what the law regards as "bona fide occupational qualifications." When asking potentially sensitive questions that might involve issues of diversity and inclusiveness, try to be as specific as possible. Instead of asking, "Do you come from a low-income background like the students we serve do?" you may want to ask: "It is important for us to hire a candidate for this role who can develop a strong relationship with the students we serve. Please describe how you have done this in the past." This latter question should be asked of all candidates, not just candidates of color.

Also during the interview process, make sure that you are clear on your messaging about diversity. Our survey results indicate that issues of diversity are important to people of color as well as white candidates, so be prepared to answer detailed questions about how you define diversity, how diversity is linked to your mission, and the initiatives you have in place to achieve your goals. Use some of the work that you did as suggested in the second recommendation above to help you develop strong messages about your commitment to diversity.

Finally, it can be helpful to debrief with candidates who removed themselves from the process or turned down a job offer. This step may be best taken by a third party who can guarantee anonymity to the candidate and release trend data to your organization. Understanding why promising candidates took jobs at another organization instead of your own will be instructive. Does the other organization's leadership look different than yours? Answering this and similar questions can inform adjustments to consider in your organization's hiring policies and practices.

Embrace, develop, advance, and retain employees. Utilizing recruitment and hiring processes that yield a diverse staff will generate the precursors for inclusive organizations and leadership diversity, but nonprofits cannot stop there or they'll risk nullifying all their efforts up until this point.

Preventing or reversing employee disengagement and turnover requires a nonprofit to practice its values and actively work to retain and promote its employees. This process can begin with efforts such as those described in the first recommendation above: open conversations, staff committees, professional facilitators, and employee trainings. Examining turnover rates by various characteristics and conducting regular quality-of-worklife surveys that include diversity-related questions (and the ability to analyze all data by various demographic characteristics) are some additional ways to monitor retention and satisfaction among employees.

Making time and resources available for mentoring or coaching also can help employees feel valued and supported, and will help them develop professionally and improve their capabilities and performance. External coaches can be particularly effective at opening up small organizations, where statistical probability might prevent a professional of color from having many colleagues or superiors who share their backgrounds and perspectives. Ultimately, when it comes to ensuring diversity and inclusiveness, organizations must demonstrate a commitment to diversity throughout the ranks. It is essential that organizations institute practices to retain, develop, and advance all employees, with a specific focus on ensuring diverse employees have opportunities to advance to senior leadership positions. Many organizations struggle, however, with balancing concerns about the prioritization of certain promotions. As every state has different regulations with regard to this matter, it is best to consult a human resources professional or employment practices attorney in order to institutionalize policies that are legally compliant and protect the organization while helping to achieve its diversity goals.

Conclusion

Nonprofit employees believe that their organizations do value diversity and inclusiveness but do not follow through on those values with actions to achieve results, and that the proof of true dedication can be found in the actual diversity of the organization. In order to address these challenges, nonprofits need to start by having open conversations that lead to clear definitions, goals, strategies, and actions around efforts to diversify their organizations. They must communicate effectively and leverage partnerships in order to recruit diverse candidate pools, and they need to ensure that their interviewing and hiring processes are free from both real and perceived bias. Finally, they need to work to ensure that their organizations are not only diverse but also that policies and practices are in place to advance qualified employees of color to positions of senior leadership within the organization. These strategies will require time and resources, and as such, they must be prioritized by leadership in order to be successful. Such efforts will likely result in higher employee satisfaction, performance, and retention — all of which can lead to increased efficiency, effectiveness, sustainability, and improved organizational impact.