“Nonprofits have the largest power to change the world,” affirms Rick Cohen of the National Council of Nonprofits. These organizations serve the common good, seeking to improve society and create a more equitable world. Dr. Jeffery M. Berry agrees that nonprofits “represent what is best about our country: generosity, compassion, vision, and the eternal optimism that we can resolve our most serious problems.”
Yet for all their noble, humanitarian missions, nonprofits exhibit some grave inequities: women, in particular, continue to struggle for equal opportunity in leading and shaping the world. Despite composing a whopping seventy-five percent of the nonprofit workforce, women only occupy twenty-one percent of leadership roles in large nonprofits (those with budgets in excess of $25 million). Indeed, the bigger the nonprofit, the bigger the gap: female representation and compensation in CEO positions declines as nonprofit budget size increases. While women leaders earn roughly eight percent less than their male equivalents at groups with a budget of $250,000 or less, the pay differential widens to twenty-five percent for large nonprofits ($25 million+ budget).
Accordingly, a study by NYU’s George H. Heyman, Jr. Center for Philanthropy and Fundraising found that female nonprofit workers directly perceive these discrepancies: sixty-six percent described a female-dominated staff; however of those employed at large nonprofits, seventy-one percent worked for a male CEO, and sixty-nine percent found the organization’s board to be predominantly male. Furthermore, forty-four percent of respondents recognized that men were conspicuously favored over equally qualified women for top positions. Interestingly, these female employees also identified a disparity in the benefactions of large nonprofits: forty percent were cognizant of their employers’ minimal effort in soliciting affluent female donors compared to male contributors, and thirty-six percent discovered that female sponsors received less respect than their male counterparts.
This discrimination seems odd not only because these enterprises define themselves by the ideals of equality, justice, and progressivism but also due to the clear economic benefits of gender inclusion.
Mckinsey & Co.’s Women Matter research finds that such inclusion, specifically more women in top leadership positions, not only helps drive organizational and financial performance today but also organizations’ success and relevance in the future. In its 2020 memo, Mckinsey asserts: “Organizations that continue to build on the critical foundation that represents gender diversity and that also ensure to build a truly diverse culture will be the winning organizations of the future.” As evinced by this chart, companies in the top quartile for gender diversity prove fifteen percent more likely to have financial returns above the average in their national industry. Moreover, if women’s participation in the workplace were identical to that of men, an additional $28 trillion, roughly the combined size of the U.S. and Chinese economies, could be achieved in 2025. This persistent discrimination represents significant untapped potential.
Specifically for nonprofit groups, the business case for inclusion is undeniable: nonprofits with women in leadership positions demonstrate more success in realizing their mission and reaching their companies’ goals, and, additionally, their employees report higher satisfaction with the organization’s overall performance. Likewise, in the 2018 peer-reviewed study “Women’s Empowerment and Nonprofit Sector Development,” researchers confidently found a causal relationship between women’s empowerment and nonprofit development. The study suggests a strong correlation between women’s economic empowerment, as measured by the percentage of firms owned by women, and both the total number of nonprofits and the average revenue to nonprofits. Women’s political empowerment, as defined by the percentage of women state legislators, caused not only an increased total number of nonprofits but also, when development was defined by average revenue per nonprofit, the study found statistically significant evidence for a circular relationship with women’s political empowerment causing development and development, in turn, causing political empowerment. In both analyses, women’s political empowerment resulted in a more developed nonprofit sector. Given this causality, the researchers concluded “that when studying the development of the nonprofit sector, women’s empowerment level must be understood as a key factor…Imagine then the impact that women could have…”
If nonprofits do, in fact, seek to change the world for the better, their missions remain curbed until these organizations pass the threshold of closing the gender gap.