Why Should Nonprofits Invest in Diversity & Inclusion Work? Arguments for the Budget

pencilsI’ve been worried about the diversity problem in my nonprofit organization for a while.  I’m the #2 person, my Executive Director is a little aloof about these issues – he’s ultimately worried that our white, wealthier donors and board members will see this work as “fringe work” and may think we’ve strayed from our mission.  And he’s right, to a certain extent.  How can we justify spending time and resources on internal diversity and inclusion when we have so little resources to work toward our primary mission?
Add to that the fact that I’m also the go-to person for all human resource complaints.  I’ve been trying to keep a lid on things, but I know unless we do some serious work, we’re going to lose people.  We’ve already lost good people and there’s some in-fighting among staff, although the ED is quite insulated from that.  We have some staff well-versed in diversity and inclusion who are all but calling others out on the carpet for their lack of awareness.  Others are really well-intentioned, but get beat over the head by other staff when they make mistakes out of ignorance.  I’m just not sure what to do, but it’s becoming more and more difficult to manage and if I don’t move the organization on this, I will feel like a hypocrite.
 I know we need to make changes, but how do I make the case to invest in this?
If this sounds familiar, that’s because it’s not unusual.  Many people in what I call historically white organizations have a primarily white leadership tier with more diverse hires at lower levels within the organization.  Well-meaning and well-intentioned leaders struggle with how to proactively improve diversity and inclusion within their nonprofit organizations.  They struggle with how to communicate urgency about this work, how to make a case for investing time and resources in it when both are already coming from overdrawn accounts.
Let’s cut to the chase.  Even though nonprofits are mission-driven, change-making, people-focused organizations, they are still in it for the money.  Not to make a profit, but to fund the work toward their mission.  It’s the reality.  And yes, there’s a much more compelling, human reason for diversity and inclusion at your organization, but that may not be the argument your stakeholders need to hear right now.
If you’re looking at it from a purely dollars-and-cents perspective, consider these facts:
1. The cost of replacing a staff person can cost an organization anywhere from 50% to 200% of that person’s annual salary according to the Society for Human Resource Management.
And diverse staff are much more likely leave organizations they find unfair.   The 2007 Corporate Leavers Report found that people of color are three times as likely to cite workplace unfairness as the only reason for leaving their employer.  Gay and lesbian professionals said workplace unfairness was the only reason they left their employer.  Where does that 50% to 200% come from?  Consider these factors:
  • HR Staff time (exit interview, payroll administration, benefits)
  • Manager’s time (retention attempts, exit interview)
  • Accrued paid time off
  • Temporary coverage – paid and “unpaid” where another staff full-time member assumes responsibilities.
  • Reduction in program delivery
  • Disruptions to team
  • Hiring activities (job posting, resume reviewing, interviewing, HR hiring functions, orientation & training)
It’s even more expensive to replace those who have been on the job less than a year because in many jobs, an employee is not fully productive for many months. This Compensation Today article highlights the costs of employee turnover.  A high turnover rate in the first year can be extra costly for the organization.
2. Failed diversity & inclusion initiatives are expensive.
Many organizations start their efforts with diversity training.  In recent years, research has shown that some of the traditional models of diversity training actually have an adverse effect on an organization.  In the 2012 Harvard Business Review article Diversity Training Doesn’t Work, Peter Bregman shows how rather than improving appreciation for difference, many trainings have the effect of heightening and polarizing difference, leaving people feeling defensive and cynical about training efforts.  The cost of these failed efforts equals not just the cost of the training itself but also the cost of fixing the mess – which includes bringing in better, more effective training, managing the increase in the staff retention costs (itemized above) and possibly lawsuit expenses.
Organizations should start with assessing what their training needs are.  One way to go about that is to use the Intercultural Development Inventory.  It’s a research-based assessment grounded in a developmental model that is non-judgmental and offers specific training objectives based on an individual and group’s intercultural awareness levels.  Most recently, the diversity and inclusion field has been abuzz about the effects of unconscious or implicit bias – prejudices that go unnoticed by the holder.  There are new trainings specifically designed to get at these unconscious choices we make – a critical consideration in the hiring process.
3. In ten years, if you’re not diverse, you will likely find that your grant-funding options will decrease. This is already true of major urban cores and is expanding out to more rural parts of the country as well.
The D5 Coalition is a national group of philanthropic organizations that have come together across the country to advance diversity, equity and inclusion in philanthropy.  They have four main priorities for big sector changes for 2015, one of which is to increase funding for diverse communities and ensure that foundations offer all constituencies equal opportunity to access the resources they need to thrive.  Another priority involves better data collection – including greater transparency of diversity demographics of organizations funded.
In October of 2014, GuideStar, the nation’s leading nonprofit reporting group, announced that it will begin collecting and publishing demographic information about nonprofit board, staff and volunteer diversity.  This will be an incredible tool for philanthropists to access when considering their giving choices.
So let’s tally up our expenses.  While the following exercise won’t be a perfect fit for your organization, you can certainly plug in your own numbers to estimate the cost for your particular organization.
  1. Lost retention of two professional nonprofit staff members: $60,000 (based on annual salary of $45K, plus benefits = $60K x 50% = $30,000 x two people)
  2. Failed Diversity Training = $10,000 (or much more, depending on how much you spend…)
  3. Fewer grant prospects = $50,000 (5% fewer grant prospects= 5% of $1mill budget = $50,000)

$125,000 – TOTAL SAVINGS
By engaging in strong internal diversity and inclusion work, the average one-million-dollar nonprofit has the potential to reinvest a considerable amount of its resources into its mission, build a strong and diverse staff team, reduce turnover, improve service and strengthen its organization.
It’s a new year and time for a new way of thinking.  Let 2015 be the year you decide to do something different.


Kathleen LaTosch at NCRC Annual Conference 2012
Kathleen LaTosch is a consultant specializing in diversity and inclusion planning for nonprofit organizations.  For more information about Kathleen’s work and availability, email her at klatosch at gmail.com

4 Action Steps for Nonprofit Diversity & Inclusion

first things firstMany nonprofit organizations feel challenged at the task of recruiting a racially diverse staff.   They may have tried a number of things unsuccessfully or feel unsure of how to start the work.  Organizations such as these often have a majority white staff – especially at the top.

I call these historically white organizations – nonprofits founded and run by well-intentioned and passionate white individuals who want to make a difference in the world, but are struggling with how to make that happen in an inclusive way.

In starting from these roots, there is often a strong values-based sense of “doing the right thing,” but board and top leadership haven’t been able to successfully build a racially diverse staff throughout the organization.  As is often the case, nonprofit organizations may have a relatively diverse staff at the lower-paying end of the hierarchy, with dominant white culture staff holding most of the top leadership positions.  Alternatively, sometimes the program area of a nonprofit will have a diverse staff, while administration and development departments remain homogenous.

The good news is, if you’re already building a diverse staff, even at the lower-paying end of the spectrum, you’re on the right track.  Having a diverse staff, even if imbalanced, is a common step toward building a more diverse and inclusive staff – you just need to keep going and deepen the work.

Resources exist to help nonprofit organizations build staff diversity and inclusion.  “Building Inclusive Nonprofit Organizations,”  published by the Denver Foundation, is an excellent resource I’ve used.   It includes a step-by-step guide and detailed manual for helping you to lead your organization through a successful diversity and inclusion process.  It helps you identify your goals and set a framework for how to reach those goals.

Strategies for Diverse Talent,” published by the Independent Sector, is another resource I’ve been exploring.  This report was created by the 2013-2014 Class of Fellows.  They reviewed the literature on effective practices for building diverse nonprofit organizations, interviewed organizational development experts around the country, then compiled a set of best practices and tested them on the National Audubon Society.  The result was a framework for nonprofit diversity and inclusion practices which includes four “Quick Wins” – strategies that are low cost, easy to implement, and have quick results.   I used this framework for a recent talk on nonprofit staff diversity and inclusion, adapting it to a human service model, and found it really useful.

Let’s explore the four “Quick Wins” and some concrete strategies that can help you and your nonprofit organization move ahead with staff diversity and inclusion.

Quick Win #1: Leverage broader recruitment sources.  Post on diverse job boards, attend diverse community festivals and job fairs, etc.  

Many organizations continue to post to the same places they’ve always posted jobs and fail to achieve different results.  They also use their own interpersonal networks, which for a historically white organization, usually means a white network.  Organizations must re-think the ways in which they are posting positions and cast a wider and more strategic net.  Are you tapping into historically black colleges and universities or, if you don’t have any locally, to those colleges and universities with a diverse student body in your region?  What diverse community fairs and festivals are in your region?  Are you connected with your local Urban League?  What diverse community cultural centers can your organization be involved with?

Secondly, many nonprofit organizations source staff from interns and volunteers.  Where do your interns and volunteers come from?  Are you turning to a largely white network for referrals?  In order to create a more diverse pool, identify organizations serving and connecting with people of color and offer opportunities.  It’s important to diversify the pipeline feeding your intern and volunteer streams.

Quick Win #2: Articulate diversity and inclusion to your organization.  Send messaging from leadership about why diversity and inclusion is important and make sure every staff member is knowledgeable about the organization’s vision on this.

This is an important step but it requires that the nonprofit organization already have a clear diversity and inclusion statement.  If you don’t already have it, you need to establish one.  Without a clear statement, it will be impossible to articulate the organization’s vision on diversity and inclusion.  And unless organizational leadership is fully on board, it simply won’t stick.  The process for establishing your diversity and inclusion values should be collaborative – it should include a group of cross-organizational people as co-authors who create a draft, reflect it back in staff and board meetings for input, make necessary revisions, then request formal adoption by the board of directors.  A well-crafted and promoted values statement provides clear direction for the organization’s actions and gives staff and other stakeholders a language and foundation for making complex decisions related to diversity and inclusion.  Board adoption institutionalizes the values, maintaining consistency through future leadership changes.

Quick Win #3: Replicate best practices across the organization.  Identify two areas where diversity and inclusion are working well within the organization and replicate them.

This suggestion helps organizations frame the work from a solution-focused perspective; it energizes your staff and highlights the “bright spots” that are working well.  It can be a wonderful way to engage more staff in the process.  Some key questions to ask: what is your organization doing well on diversity and inclusion?  Are there programmatic elements that can be adapted for staff development?  Is your youth work cutting edge when it comes to diversity and inclusion?  Can the youth present to staff – an idea that supports both youth leadership development and broader staff awareness.  Do you offer diverse and inclusive programs and events to the community?  How can that be adapted for staff?  Can staff be encouraged to attend?

Quick Win #4: Cultivate partnerships.  Convene a small group of thought leaders, across the field, for roundtable discussion.

This is a wonderful way to build connection across nonprofit organizations, strengthen and foster relationships, and, in the process, infuse diverse ideas, practices and programs into your organization.  Some concrete items that can come from these relationships:

  • Cross-cultural training opportunities for staff
  • Job posting and volunteer exchanges
  • Deeper issue education and awareness
  • Programming partnerships and collaborations

A word on cost.  You don’t have to spend a lot of money on developing diverse and inclusive practices, but you will have to devote time and people energy.

Nonprofit staff typically wear many hats, work many hours and have to be highly resourceful to make ends meet.  Identifying a single staff member to coordinate diversity and inclusion activities when they already have a full-time job description, is a recipe for disaster.  Balls will get dropped; other priorities will press and the one tasked with the work will be unduly burdened and unfairly blamed for ineffectiveness.  There’s just not enough time in the day.

For maximum effectiveness, diversity and inclusion work needs to be spread out among a broad range of organizational stakeholders, who each do some of the work and be ideally coordinated by an outside third party.  This maximizes focus on the plan, reduces internal conflicts of interest and power struggles, and considerably shortens the work time frame by focusing energy on the most effective strategies.

Having a simple, actionable plan ahead of you can make the work much easier and there are many free tools and resources to help you with the work.  Here’s a quick checklist from this blog for moving your work forward: Checklist – 4 Wins in 5 Steps.

Read Part 10: Nonprofit Diversity Recruiting: Who’s in Your Pool?


This is one post in a multi-part story documenting one historically white organization’s journey toward becoming racially inclusive.  The series seeks to document the challenges and successes faced along the way in an effort to provide a learning tool for other nonprofit organizations who wish to do the same.  For a complete copy of Affirmations’ “Blueprint for Change” visit www.GoAffirmations.org and click on About Us.Kathleen LaTosch at NCRC Annual Conference 2012 
Kathleen LaTosch is a consultant specializing in diversity and inclusion planning for nonprofit organizations.  She worked at Affirmations, Michigan’s largest LGBT organization, from 2002-2011 and served as Chief Administrative Officer from 2007-2011.  While there, she was responsible for facilitating a broad-based racial diversity and inclusion initiative.  For more information about Kathleen’s work and availability, email her at klatosch at gmail.com

Diversity Recruiting Strategy – First Steps

who-what-where-when-why-howMany diversity conversations start with the question, “how do we recruit more people of color (or more women or more ________ people)?” and while recruitment is certainly a worthy area to address, it’s helpful to take a step back and look at the inside map of your current staffing patterns first.

Getting a good handle on what’s happening right now will help you pinpoint specific areas for improvement and it’ll help you avoid common pitfalls and missteps.  For a working example of looking at existing staffing patterns, let’s use racial diversity.  Some key questions to be asking include the following:

  1. What racial demographics are you targeting? For nonprofits, this is sometimes answered, “representative of our region” or “representing those we serve.”  If this is your case, you need to gather baseline data on the racial demographics of your region or your constituency.  For the former, this is easily found through Census Data; for the latter, you’ll need to collect your own data on your constituents.  Keep in mind that even if you have a sense of where your target should be, laws govern the setting of written targets – you’ll need to consult an attorney on this one.
  2. What are the current racial demographics on your staff? A simple breakdown will suffice only if you have a very small organization.  Otherwise, for medium- to large-sized organizations, you need to break down the racial demographics by hierarchy.  If your staff is 50% people of color, but white people make up 90% of your leadership positions, that’s an area for concern and you’ll only be able to look at this if you gather the correct information.  A couple of other considerations:
    • You may want to look at payrate and race together, to get a sense of how equitably your pay structure is playing out. Are people in the same levels getting paid equitably?  If not, this could be affecting both your retention rates and your recruitment efforts.
    • Look at your staff racial demographics by department. Are some departments noticeably more or less diverse?  Why might this be?  What are the causes and what are potential solutions?
  3. How did your current staff come into their jobs? This is an especially important question for strategic recruiting.   Were they “warm” leads from friends or colleagues?  Were they promoted from within?  Were they former volunteers or interns?  Were they purposefully sought out?   Did they come in cold from a job posting?  Where did they find out about the job?  Look for trends and patterns broken down by race.  This will provide valuable information to direct your future recruiting efforts.
  4. How long have people worked at your organization? Look at this question in terms of racial demographics and also check for promotion/demotion history.  If there are race-based patterns, this provides for further areas of exploration.

This blog is based in part on a four-year racial diversity and inclusion initiative at Affirmations, Metro Detroit’s community center for lesbian, gay, bisexual and transgender people.  In 2009, we took a close look at all of these questions and uncovered key areas requiring specific attention:

  • While the staff was relatively diverse (64% white; 36% people of color), leadership positions were held mainly by white people at the time (80%-20%). People of color were primarily employed in positions with less authority and were more likely to hold part-time or hourly positions, as opposed to full-time salaried positions.
  • Retention data was alarming. The average white person stayed on staff more than 5 years.  The average person of color stayed on staff less than one.  We were recruiting and hiring, but people weren’t staying.
  • Even though a small organization, programs were nearly always more heavily populated by staff of color, as compared to development or administrative positions.

Gathering this information was crucial to forming a solid recruitment strategy and for informing our retention efforts.  On recruitment, we needed to do two things: 1) target efforts to non-program areas of the organization – development and administration, and 2) target efforts on leadership positions.

On retention, it pointed out deeper problems and a need to gather additional information about why staff of color left the organization, on average, after less than a year.  Great recruitment strategy only works if people want to stay once they get on the job.  Otherwise, you’re just spinning your wheels.  For more on this, check out a previous blog entitled “The Cost of Diversity Without Inclusion,” on the risks associated with diversifying your staff before making inclusive culture shifts from within.

Part 9: 5 Action Steps for Nonprofit Diversity & Inclusion


This is one post in a multi-part story documenting one historically white organization’s journey toward becoming racially inclusive.  The series seeks to document the challenges and successes faced along the way in an effort to provide a learning tool for other nonprofit organizations who wish to do the same.  For a complete copy of Affirmations’ “Blueprint for Change” visit www.GoAffirmations.org and click on About Us.Kathleen LaTosch at NCRC Annual Conference 2012 
Kathleen LaTosch is a consultant specializing in diversity and inclusion planning for nonprofit organizations.  She worked at Affirmations, Michigan’s largest LGBT organization, from 2002-2011 and served as Chief Administrative Officer from 2007-2011.  While there, she was responsible for facilitating a broad-based racial diversity and inclusion initiative.  For more information about Kathleen’s work and availability, email her at klatosch at gmail.com