It should come as no surprise that the Greater Toronto Area (GTA) is often classified as one of the most ethnically diverse urban centres in the world.

Consisting of the central city of Toronto, along with four surrounding regional municipalities – Durham, Halton, Peel, and York – the GTA boasts more than 6 million residents. With a population that adds up to one-sixth of Canada’s entire population, about 40% of inhabitants are visible minorities, with communities like Markham reaching upwards of 65%.

Diverse, indeed.

But where does diversity stand when it comes to leadership positions of nonprofits in the region?

In a report commissioned by DiverseCity: The Greater Toronto Leadership Project and released today, Dr. Chris Fredette of Carleton University’s Sprott School of Business sought to determine just how diverse leadership is among nonprofits in the GTA.

A research undertaking of significant scale, Fredette analyzed more than 4,200 board positions at 420 nonprofits over a series of months beginning last autumn, and concluding this May, to pull together his DiverseCity Counts Report.

So did the numbers stack up? Are nonprofit boards as diverse as the communities their members hail from?

The short answer: no.

Not even close.

However, there may be more to the research than what lies on the surface.

Looking past many of the yes/no statistics, trends emerge that reveal diversity as being in the inchoate stages of permeating, albeit slowly, into the leadership roles in the sector.

Highlights from the report

• Of the 4,254 nonprofit board positions examined, 15.6% are held by visible minorities
• Sub-groups of visible minorities are also under-represented: those of Korean descent have the lowest levels of representation in our sample (0.33%), while Blacks (3.13%) and South Asians (3.41%) have the highest
• Of the more than 420 organizations that responded to the surveys, 77.9% have at least one visible minority on their board
• Approximately 44% of nonprofits report having a formal working definition of diversity, and of these, 83.6% include ethnicity, race and colour, 49.4% include country of origin, and 36.3% include immigrant and refugee status in their definition
• The research shows that once a nonprofit board reaches critical mass of 30%+ visible minorities, there will be an increase in the benefits of diversity experienced by the organization

Baby steps

“Although there is growth, it would appear as though an increase of leadership diversity among nonprofit boards is still happening too slowly, relative to catching up with the GTA’s population.”

Fredette’s blunt, no-nonsense observation echoes his report’s most revealing statistic – of the 4,254 board members examined for this research, only 15.6% were visible minorities.

“This is a far cry from being anywhere close to proportional,” says Sandra Lopes, the manager of policy and research at Maytree, a private foundation that promotes equity and prosperity through policy insights, grants, and programs – including the DiverseCity Counts Reports.

“When we started this initiative, we knew there was under-representation in leadership, but we didn’t really know to what extent,” says Lopes. “We wanted to get a sense of the under-representation, and if it exists, what can be done about it.”

This year, the DiverseCity Report’s focus is on the nonprofit sector, and, according to Lopes, despite low proportionality, “there is reason for hope.”

“We’ve found that in similar sectors in the GTA, 14.5% of leadership roles were held by visible minorities in 2011. In 2010, it was 14%, and in 2009 in was 13.5%, so we’re seeing a .5% change over time.”

Boxing Ontario was one of the 420 nonprofits to take part in Fredette’s survey, and responded with above-average diversity statistics. The organization is the governing body of amateur boxing in Ontario, and has a board of 12 directors, half of which are visible minorities. The composition of the board means it serves not as an example of the current norm, but what could soon be the norm.

“We have always had, and supported, an open policy,” says Matthew Kennedy, Boxing Ontario’s executive director. “The number of visible minorities sitting on the board has increased in recent years, but not because of any outward reactive measures on our end. Rather, our board is a reflection of our diverse membership.”

Boxing Ontario is made up of more than 80 clubs in five regions serving approximately 13,000 members. Kennedy estimates about half of this membership pool is composed of visible minorities, and realizes the potential of having a board that mirrors the community of people his organization serves.

“There is a certain advantage to capturing the demographic of our membership within our board of directors,” says Kennedy. “It starts with feeling more connected to our community, an edge many other nonprofits may not have yet realized.”

It is this connectedness that gives Fredette a reason to call the results “baby steps in the right direction.”

His research also shows that 77.9% of organizations have at least one person from a visible minority on their board, suggesting the majority of boards are recognizing the need to diversify their leadership.

“Moving forward, we’ve got progress,” says Fredette. “But perhaps not as quickly as some of us would like to see.”

Big strides

Whatever positive momentum may have been lost in the report’s initial results was picked up in some of its other categories, specifically those looking at trends in nonprofit missions and mandates.

The research shows that nonprofits are increasingly recognizing the importance of a diverse board – approximately 44% of organizations reported having a formal working definition of diversity, and of these, 83.6% include ethnicity, race and colour.

“It’s no longer the case that boards are unaware that diversity is an important part of how they need to operate, or that they don’t need to be concerned about including stakeholder groups,” says Fredette, noting a changing of sentiments, at least on paper.

“Many of the boards have taken this on as a kind of strategic imperative, saying ‘We need to be more reflective of the communities we serve, not only to increase the health of our organization, but also to make us more legitimate and more viable in serving constituents.’”

Boxing Ontario is one of the organizations that has a formal working definition of diversity in its mandate – something it did not have a decade ago.

Fredette’s research also shows that most respondents find that an increasingly diverse board brings new perspectives to the bargaining table, contributes to organizational governance by helping shape and guide board mandates, and strengthens the board’s financial management by aiding fundraising measures.

Bold stances

With evidence to support that diversity improves nonprofit governance, Fredette found that a small number of organizations are testing the waters of diversity to a higher degree than others.

His findings suggest that the more diverse an organization’s board, the more likely they are to report benefits of diversity.

Fredette explains that it is a “strength in numbers” case study.

“There’s a critical mass argument to be made that when we see boards reach 30% diversity, we’re getting a qualitatively different set of processes that are much better than boards that are less than 30%.”

The trend among senior executives responding to the survey shows that boards above the 30% level respond with a much higher belief that diversity brings better decision-making to the board, and an improved ability to reach out to new stakeholders, create a more inclusive organizational culture, and attract and recruit more diverse individuals to the board.

“At a 30% and beyond threshold, the outsider voices aren’t outsiders anymore,” explains Fredette. “There is enough recognition in the room that people who are not the majority are able to voice what they feel needs to happen, and the listeners in the room are able to recognize the importance of what they’re hearing.”

Lopes puts the 30% threshold in simple terms for nonprofits:

“If they’re proactive, then this proliferation will happen faster, and if it happens faster, nonprofits will begin to realize all the benefits that come with having more visible minorities on the team.”

The results show that this idea of institutionalizing diversity as a strategic imperative is gaining traction. It appears nonprofits are becoming increasingly aware that a shift to a diverse executive is now a mandatory step to becoming and remaining viable, legitimate, and fiscally healthy.

Putting the results to good use

The full report includes a number of recommendations for organizations looking to diversify their board.

Among them, the report calls for nonprofits to make diversity a priority in the boardroom, and for directors to set goals. When implementing new policies, nonprofits should align diversity efforts to the organization’s mission and mandate to ensure buy-in from the board and senior staff. Once included in the mission, nonprofits are asked to support the full inclusion of new members through the board’s policies and procedures by asking new and diverse board members to sit on or lead special committees.

Lopes says the results of the report will be spread well beyond the borders of the GTA.

“The results are being replicated in different cities across the country, and there’s interest around the world for this project,” says Lopes. “It will be a good resource for organizations that want to diversify.”

Above all, Fredette is calling on nonprofits to “reach the 30% critical mass to reap the full benefits of diverse boards.”

Speaking directly to senior executives, Fredette asks them to ask themselves a series of questions: “Have we become more inclusive as organizations? Are we not only participative, which is including people’s voices in the conversation, but are we more inclusive? Are we putting power in the hands of the people who make decisions that need that power at that time?”

Following his recommendations, Fredette made a quiet comment.

It was subtle enough to have easily been forgotten, though one that very likely reveals why he undertook this project in the first place.

“I think diversity, for a while, has been a sideline, nice-to-do issue, but what we’re now seeing is a shifted mindset. We’re seeing diversity become a strategic issue, where boards are saying ‘we need to evolve, to not only reach out to our communities, but to be more effective as governors of our organizations, and to make sure we’re legitimate in the eyes of people who use us, and more importantly, fund us.’”

Consider it his way of urging nonprofits in urban centres to make sure they aren’t left in the dust.

Download a PDF copy of Ten Tips to Diversify Nonprofit Boards

Brock Smith is a radio reporter/producer and communications specialist based out of Ottawa, with a special interest in the nonprofit sector. Brock can be reached on Twitter at @brocktsmith.

Photo via iStock.com, used with permission.