Diversity and foundations

One of the frequent comments I tend to make on the site is that some of the developments in the US nonprofit sector might be indicative of what the future looks like in the UK. An emerging argument about diversity and foundations is one such example.

The Chronicle of Philanthropy recently reported that the Californian state assembly has passed a proposal (its not yet been agreed by the Senate) to force the largest nonprofit foundations to disclose the composition of their workforce and trustees by ethnicity, gender and sexual orientation. Foundations will also need to identify what grants (and how much) are made to specific minority groups. The story is here and there is an interesting critique of the proposed legislation.

The aforementioned foundations, and their representative bodies, have strongly opposed the move.

This raises a number of interesting strategic issues for the sector. First, are nonprofits and foundations as diverse as the communities they are serving? Moreover, are the funding activities of foundations promoting the sort of diverse sector that we presumably all want to see? We probably don’t know the answer to these, so addressing these questions is a key purpose of the Bill. (By the way, we definitely can't answer these questions in the UK.)

Second, what’s the role of the State in relation to civil society here? Is the State infringing upon the independence of the sector in passing such legislation, not to mention the rights of the individual? Is it another example of the regulatory hurdle getting higher every year, and if so, is this acceptable given the good intentions of lawmakers?

These are potentially rhetorical questions, particularly for a sector that is rightly concerned with its independence. But I wonder if they may in fact highlight whether or not nonprofits are being strategic in terms of thinking about their role in achieving the ‘good society’, and then setting the agenda themselves? Is diversity like some of the other big issues of our time – poverty, climate change – something where the sector at large is always on the back foot (with of course the exception of specialists working in those areas)?

The strategic response to these questions isn’t easy. But a start might be to think about how nonprofits combine to set the civil society agenda beyond their thematic remit. Secondly, we might also want to learn from ideas such as the blended value proposition, an idea of particular relevance to foundations. One of the ideas of blended value is that foundations might make just as much of an impact through where they invest their endowment as through their grantmaking activity. So directly addressing the diversity question through strategic employment practices, and telling stakeholders this, might be an obvious response to head off the urge to regulate that sometimes afflicts our sector.

Last updated at 15:08 Mon 18/May/09.
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Megan 's picture


Third Sector Foresight

Here’s an interesting piece in the Guardian about how Norway has managed to enforce a law that 40% of company directors must be female. What’s particularly interesting is the supportive public and media attitudes to such affirmative action.

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