At Grant-Making Organizations, Diversity Needs to Start at the Top

In the past several years, organized philanthropy has put a lot of energy into improving the diversity of the staffs of America’s foundations.

While these efforts have met with some success, far more needs to be done to diversify the leadership of foundations. According to a 2009 Council on Foundations survey, just 7.6 percent of all chief executive officers and chief giving officers at foundations are members of minority groups.

The lack of diversity is also apparent on boards: Only about 14 percent of board members are minority, according to a forthcoming council survey.

Grant makers often press their grantees to diversify their boards. They should be as committed to holding themselves to the same standards of fairness and inclusion to which they hold their partners.

After all, foundations work to change our society for the better, and they cannot remain isolated from the people they seek to serve and the issues they hope to tackle. Increasingthe diversity of foundation boards will promote a greater variety of perspectives and therefore more options to develop programs.

Boards serve a crucial function in foundations, and they have far more flexibility and power than their counterparts at other types of organizations. Boards can design the structure of their foundations and grant-making programs, can decide whether to employ staff members, and are usually central to decisions about awarding grants.

Foundation trustees are nominated and chosen through an informal process of board members reaching into their personal and professional networks. Trustees pick new board members whom they think will be the best fit, with particular emphasis placed on existing ties, and who will get along with the other board members.

Those are important qualities, but boards should also focus on which new trustees will bring great ideas, skills, and energy to help the foundation define and achieve its mission. Asking those questions at the outset of the selection process elevates the discussions to a more thoughtful level that yields nominees of broader experience and perspective.

Why does this matter? Because it is good governance. Boards have a responsibility to act ethically and should hold themselves to a high standard of conduct and transparency. Further, foundations serve as examples for other nonprofit organizations in their communities, and they should strive to set the highest example for ethical conduct.

The foundation board is generally more involved with staff members than its counterpart in other types of organizations. To do its work properly and to understand whether the foundation is doing its work well, the board generally has a good deal of contact with the organization’s employees.

Good governance requires asking questions about whether the foundation’s programs are working. Is there alignment between the strategy and the processes to execute it? Is the foundation living up to the expectations of the people it serves? Are the foundation’s programs making a difference?

To get robust discussion on those and other questions, the board needs a variety of perspectives around the table. Further, increased diversity at the board table can produce more accountability and better governance.

In his book The Difference: How the Power of Diversity Creates Better Groups, Firms, Schools and Societies, Scott Page, professor of complex systems, political science, and economics at the University of Michigan, makes a compelling case that diversity can lead to better decision making and more effective organizations. He explains that by bringing together people of different backgrounds and experiences, organizations and teams can achieve innovation and produce results that improve our society, which is, after all, the charge of most foundations.

To make diversity work, a foundation’s leader must demonstrate a commitment to that principle and include board and staff alike. If that conviction does not exist or if the chief executive is indifferent or opposed, a foundation cannot call itself inclusive.

The W.K. Kellogg Foundation serves as a notable example of a large foundation whose chief executive and board have demonstrated a real commitment to racial equity.

Its leaders realize that to make a difference, the foundation must achieve diversity throughout the organization. Five of Kellogg’s 11 board members come from racial or ethnic minority groups, and its three most recent board chairs have been people of color.

Moreover, Kellogg’s recent announcement of its America Healing Initiative, a $75-million effort to address racial inequity, shows the foundation’s deep commitment to dealing seriously with race issues.

This is real leadership. Kellogg’s CEO, its board, its senior executives, and staff members at all levels, are not just talking about doing something but are actually providing the dollars to support community organizations in fighting racial inequity.

Our society is rapidly changing. The complexion of neighborhoods throughout this country is different today than it was 10 years ago and will look different 10 years from now. As our country changes and faces issues of greater complexity, foundations must ensure that they are serving the public well and effectively engaging the right people and institutions. Ultimately, that is the only way they can make a real difference.