Nine trillion dollars is a hard number to put into context. It is roughly the combined gross national product of Britain, France, and Germany. It is also the amount the next generation will inherit in the United States within 10 years.
The philanthropic community is poised to reap some of this wealth, and we need to have honest conversations about the windfall if we want to maximize its potential to do good. An important part of that conversation should concern how nonprofits will adhere to their missions amid the infusion of cash — particularly as they select trustees.
These days larger nonprofits often give into the temptation to pack their boards with high-net-worth individuals. As a pragmatist and a donor, I get it. This strategy secures a steady stream of income at a time when big organizations have complex and expensive programs to maintain. It is also easier for the staff to pull in large gifts than to chase handfuls of smaller donations. Putting financial stars on a board also guarantees easy access to the world’s most powerful networks, not to mention the collective pool of intelligence that successful entrepreneurs wield.
However, an overreliance on the Midas touch can contribute to entropy and a sense of entitlement. Some prominent boards reserve a spot or two for experts, creative types, and accomplished professionals attached to the mission. However, this approach brings a risk of token representation, overlooked emerging voices, and little variety of expertise. In the worst-case scenario, such a strategy creates a monoculture of elites.
Anne Wallestad, president of Board Source, says, “Boards should be a place where diversity thrives. Their structure enables them to tap into a wide range of experience, expertise, and networks. When organizations populate themselves in a way that is homogeneous, they are narrowing their boards’ worldview in a way that can be deeply problematic.”
Overlooked Talent
Before writing this article, I researched board compositions of dozens of prominent nonprofits whose missions dovetail with the interests of our family foundation. The effort confirmed what I suspected: I would not be eligible for many boards because of the steep price tag attached to such an exchange — a six-figure minimum, most likely seven figures for arts and conservation — including two groups our foundation supports. The fact is that I would not want to limit the scope of my giving for the sake of capturing prestigious board memberships, and I am not famous enough to bypass this kind of tithe.
It is sobering to think how much amazing talent (not mine, to be sure) gets overlooked due to the tendency to select only a certain kind of resume. It does not bode well for philanthropy or a more vibrant society.
The stereotype of the idle rich is just that. In truth, the top tier of the “1 percent” lead intensely byzantine lives — with schedules that preclude playing a traditional role of dedicated volunteer, doing tasks like getting to know other board members, embracing the mission, and becoming familiar with details of the organization.
When megawealthy trustees are selected, the hope is that money can make up for the loss of service. But every board needs muscle, the roll-up-your-shirtsleeves variety, to maintain the organization’s health. This kind of board member is an increasingly rare commodity even though a successful nonprofit relies on the checks and balances of active governors and benefits from a variety of perspectives that foster collaboration and creativity.
Auden Schendler, vice president for sustainability at Aspen Ski Company, who sits on many boards, warns that loading your board with high-profile personalities can also play to the modern narcissism trap of “look at me!” which, he stressed, ought to have nothing to do with nonprofit work. “So as a result, NGOs become trendy things to be part of, very financially successful but not so good at their mission,” he says.
Powerful people change the orbit of others, usually without intending to, and this dynamic has a psychological impact on a nonprofit. Extreme wealth buys the ability to craft a personal universe, and it takes discipline for a high-net-worth individual to stay grounded in reality. It is very tempting to rearrange our behavior and expectations when plutocrats are in our midst.
I’ve heard board members at a wide range of organizations complain that their voices are often marginalized by the megadonors, which eliminates the roundtable dynamic. One trustee who helped start a nonprofit felt alienated because her board chair hung on the words of the wealthier donors, assuming that their counsel was wiser. It takes a seasoned board leader to maintain equilibrium with so much power at play, and true dedication to diversity can help mitigate this dynamic.
A Mix of Voices
There are ways to make room for economic diversity in the nonprofit boardroom. Here are a few.
Donors and nonprofit leaders must talk about the lack of economic diversity on their boards.
Donors should open up conversations with the leaders of the institutions they support and investigate whether a charity’s board makeup is in line with its mission. Donors should insist on a mix of voices and diversity at every level.
When I talk to other donors about these issues, I often meet resistance and hear a great deal of “buts": “But you are being naïve.” “But true diversity is impossible to accomplish.” “But this is the way it’s done, and you need groomed and sophisticated people to sit on a board.”
I disagree. As donors, we need to examine our own privilege and try to push ourselves out of our comfort zones. I know how challenging it is to look at one’s own inadvertent complicity. Let’s move beyond the knee-jerk “but” and be more innovative.
Prospective trustees should consider the real time commitment before accepting a board seat.
It’s true that sitting on a board has many perks — an immediate relationship with people who are as passionate as you about a particular cause, easy access to an intense climate of learning and advocacy, and a broader network. However, if you are willing to forgo a crisp title, involvement at an ad hoc level may be a better fit. If you decide you don’t have the time to volunteer as a trustee, consider expanding your financial support to enable the organization to fill your spot with someone who brings a different viewpoint to the table.
Board chairs and nonprofit leaders must have difficult conversations about the charge of money.
Nonprofit executives and board members should consider whether subtle notions of entitlement are overpowering the psychological health of the organization. For example, if everyone is flying to a conservation board meeting on individual private planes, this clouds the ethical welfare of that organization — even with the purchase of CO2 offsets to justify this kind of extravagance.
Nonprofit decision makers must vet high-net-worth donors with care.
Does a prospective trustee’s substantial inheritance come with intelligence, compassion, and humility? Is this person bringing the skills your organization most needs? Could you clinch that donation without dangling a board seat?
Philanthropic leaders on all sides of the aisle need to confront these contradictions in the nonprofit world (naturally with diplomacy and grace) to ensure a group’s mission remains the priority, not just when it is convenient, and never on a sliding scale.
As a nation, we are making halting progress toward radical institutional change related to ethnic and gender diversity. Unless we candidly acknowledge the challenges surrounding wealth disparity, those significant strides will be hobbled.
Isa Catto welcomes suggestions for future topics. She is an artist and executive director of the Catto Shaw Foundation and is working on a memoir.
