Measuring Racial-Ethnic Diversity in California's Nonprofit Sector

Abstract

Decisionmakers in California and across the country are facing critical challenges related to diversity. But until now, there has not been a comprehensive picture of how California's nonprofit sector has responded to this demographic transition. This report, based on a representative sample of California's 501(c)(3) organizations, documents the extent to which California's nonprofit boards, staff, and executive leadership are racially and ethnically diverse. It analyzes diversity by an organization's size, type, funding patterns, and geographic location within the state, and examines how California nonprofits with diverse leadership have been affected by the current economic downturn. The report also presents three models for measuring diversity using different definitions of organizational diversity.

This report is also available as a summary policy brief.

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Executive Summary

Racial and ethnic minorities are fast becoming a larger share of the U.S. population, and California is on the forefront of this change. Already, "minorities" account for the majority of California's population. Non-Hispanic whites are the largest racial-ethnic group in the state, but one in three Californians is Latino, one in eight is Asian American, and one in sixteen is African American. About 1 percent is Native American or Pacific Islander. And while California as a whole is diverse, there is enormous variation in the patterns of racial-ethnic diversity among the state's regions. Some regions, such as the North Coast and Sacramento, have a majority non-Hispanic white population, while in the Los Angeles area, nearly two-thirds of the residents are people of color.

To learn whether California's nonprofit organizations reflect this demographic picture, researchers in the Urban Institute's Center on Nonprofits and Philanthropy conducted a statewide, representative survey to assess the diversity of nonprofit boards, executive directors, and staff in California's nonprofit sector. The survey addressed five questions:

• What proportion of California's nonprofits can be categorized as racially and ethnically diverse?
• What percentage of board members, executive directors, and staff in the sector are people of color, and what percentage are members of specific racial-ethnic communities?
• How does the number and proportion of racially-ethnically diverse organizations vary by the size of the organization, field of activity, or location in the state?
• Is there a gender difference in the leadership of organizations led by people of color?
• What effects, if any, is the current economy having on nonprofit organizations in terms of demand for services and funding, and are the effects correlated with the racial or ethnic diversity of organizational leadership?

The study provides valuable baseline information on how racially and ethnically diverse California's nonprofit sector is in terms of leadership and staffing. However, it does not address questions pertaining to such issues as the relationship between diversity and quality of service, why some organizations are more diverse than others, or how diversity can be promoted in the sector.

Finally, we discuss several major implementation challenges, specifically, participation of and possible untoward impact on other payers and the new roles, responsibilities, and capabilities for providers and government. We also summarize some of the pointed skepticism that some have leveled at the ACO concept and consider whether this is another example of a concept advanced more by wishful thinking than by empirically based policy analysis.

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