The Women's Sector? Not Quite...

Cigar smoke, scotch on the rocks, “boy’s club” antics.  Fortunate for those of us in the nonprofit and philanthropic world, such stereotypical images of the corporate elite and gender homogeny do not find themselves within the walls of our altruistic endeavors.  We fight for social justice, equality, and unbiased access to opportunity.  We benefit from the diversity and equality that is the object of so much of our work – or do we?

The common perception of the nonprofit and philanthropic workplace, both within the sector and among the general public, is that it is less gender-biased and more “warm-and-fuzzy” than its for-profit counterpart.  The reality, however, is that the nonprofit sector has its own set of gender disparities – both in staffing and wages – that can be detrimental to nonprofit organizations.

In this article, we aim to draw attention to some of the major gender-related issues affecting nonprofits as well as demonstrate the benefits of incorporating greater gender diversity into all aspects of these organizations.

Staffing

At first glance, nonprofits appear to be predominantly female-run; even though they make up just under half of the U.S. total work force, women fill 68% of nonprofit staff positions.  Moreover, when looking at nonprofits as a whole, 40% and 60% of executive directors are male and female, respectively (Halpern, Patrick R. “Workforce Issues in the Nonprofit Sector,” American Humanics Initiative for Nonprofit Sector Careers, (May 2006): pg. 7).

Yet, the story does not stop here.  When we take a deeper look at the gender composition of senior management, nonprofit size makes a significant difference.  Although women do comprise the majority of all nonprofit executive directors, they are over-represented in nonprofits with an annual budget of less than $500,000 and under-represented in nonprofits with an annual budget of $5 million or more. 

Among the largest nonprofits, those with a budget of $50 million or greater, men account for nearly 85% of CEO positions (http://www.guidestar.org/news/features/2004_comp_findings.jsp). This finding may correspond with the fact that larger nonprofits tend to more closely resemble a corporate structure and environment (where gender disparity in upper management positions is even more pervasive) whereas smaller nonprofits tend to be more flexible and open to a diversity of leadership.

Results may also vary by the type of nonprofit, though a study of the human services sub-sectors drew similar conclusions as did the sector as a whole; men are under-represented at the staff level and a glass ceiling exists for women at the management level, particularly in larger organizations (Halpern, Patrick R. “Workforce Issues in the Nonprofit Sector,” American Humanics Initiative for Nonprofit Sector Careers, (May 2006): pg. 7). These imbalances, at both staff and management level, can present challenges for men and women as well as limit a nonprofit’s effectiveness in developing innovative and vibrant solutions to social problems.

A leader of any nonprofit needs to not only have a broad vision of the sector and the role of his or her organization within the sector, but should also have spent time “in the trenches,” running programs and interacting with the organization’s constituency, in order to learn about the operations from the bottom up.  While female leaders often work their way through organizations to top positions, male leaders more often arrive in these positions from the for-profit sector with very little true understanding of “on the ground” programming and operations.  Yet, men looking to enter the nonprofit world from a lower level may find themselves dissuaded by the fact that they are in a largely female environment or the sense that their career choice is perhaps not as valued by male or female peers in other sectors.  Particularly for men with the pressure to be the primary breadwinner in a family, the fact that nonprofit pay is typically lower than in other fields can be a strong deterrent to entering the field from the bottom-up.

Female leaders of nonprofits can also face unique challenges due to the fact that their leadership role is not necessarily recognized externally.  For instance, a Harvard senior involved with an international development nonprofit describes the experiences of the organization’s young female founder and leader:

Often when [she] is with her family overseas visiting the projects sponsored by her organization, community and government leaders approach her dad as the leader of the group, since he’s the oldest male present.  This is frustrating for her not because she wants special recognition, but just because her dad doesn’t actually know what’s going on, and yet he ends up being the spokesperson.

Though varying levels of recognition (or lack thereof) of female leadership in different settings is not limited to experiences within the nonprofit sector, efforts to achieve inter-agency cooperation can face particular challenges when NGOs, especially those with female leaders, are taken less seriously than those with male leaders.

Wages

Unlike the mixed gender disparities in staffing, disparities in nonprofit compensation are much more defined.  Overall, men in all positions of nonprofit organizations have a median compensation that is 28% higher than women (http://www.guidestar.org/news/features/2004_comp_findings.jsp). Even when comparing male and female CEOs of nonprofits, including smaller organizations that are primarily led by women, men earn more than women. On average, men earn 15% more than women in nonprofits with a budget below $500,000, and over 50% more in nonprofits with budgets greater than $50 million.

There is, however, some evidence that the gender wage gap in the nonprofit sector is narrowing.  A 2003 salary survey found that the discrepancy in salary between male and females decreased by 34% between 2002 and 2003 (Jones, J. 2003 Salary Survey: Women Gaining on Men, As Nonprofit Salaries Steadily Increase.  “The Nonprofit Times”, Feb. 1. 2005). Despite this drop, however, male salaries remain, on average, $16,000 higher than female salaries in the nonprofit sector (http://www.guidestar.org/news/features/2004_comp_findings.jsp). 

Benefits of Greater Gender Diversity

A recent study examining 353 Fortune 500 companies found that companies with the highest number of women in senior management positions had a 34% higher return to shareholders than companies with the lowest number of women in senior management positions (http://www.catalyst.org/files/full/financialperformancereport.pdf). Additional research has shown that gender diversity leads to lower costs from absenteeism, better employee retention, and improved recruitment, culture, and public image (“Creating an Inclusive Workplace”, Nonprofit World, Vol. 24, No. 4 (from www.snpo.org)).

The reasons for improved performance resulting from increased gender as well as ethnic diversity are explained by the impact diversity has on group performance.  One of the most interesting findings is that initially, diversity in race, gender, and age actually has a negative effect on groups as the presence of visible diversity seems to concern team members that there will likely be differences of opinion within the group.  If effectively managed, however, this initial uncertainty can lead teams to handle conflict and devise solutions to problems in more creative ways.  In contrast, groups that are socially similar tend to perform worse on problem solving tasks than groups that are diverse (Manniz, E. Neale, MA. What differences make a difference? Psychological Science in the Public Interest. 2005; 6(2)).

Though this research is mostly based on the for-profit sector, its conclusions are a useful guide for nonprofits as well.  It is clear that from a staffing level, nonprofits need to diversify their pool of male workers. While at the management level, at least in larger nonprofits, they need to increase their pool of female workers. In addition, it is likely that greater gender diversity (as well as all other forms of diversity) in nonprofits has the potential to lead to greater fundraising success in that a greater diversity of leaders and staff members can likely attract a greater diversity of donors.

Attracting a greater percentage of female donors is particularly important as trends suggest that women are controlling a greater percentage (60%) of the nation’s wealth than ever before.  Women control 80% of spending decisions, and the number of women who earned $100,000 or more tripled in the last decade (Maloy, DD. Women and the Wealth Transfer. In Mapping the New World of American Philanthropy: Causes and Consequences of the Transfer of Wealth (S Raymond and MM Martin, eds). Wiley and Sons, forthcoming April 2007). Furthermore, women are traditionally the nation’s volunteers, and research has shown that those who volunteer are more likely to give monetary donations.

Louise Davis, the female Executive Director of Peer Health Exchange, a New York City based nonprofit, spoke to this point stating, “In my brief time in this industry, I have seen an increase the in the number of women philanthropists.” While having a female-led organization does not seem to hurt one’s funding opportunities, as the number of women involved in philanthropy increases, it may actually serve as an advantage. For instance, Ms. Davis noted that her gender proves beneficial in fundraising when she is “fundraising from women-focused foundations or female philanthropists who wish to support women-led causes.”

Another benefit of greater gender diversity is that it is self-perpetuating.  Women in leadership positions can serve as valuable mentors and role models to women in staff positions, providing them a greater incentive to advance in the field.  Similarly, more men in staff positions can help draw other males to nonprofit, fundraising, and grantmaking positions.  Particularly effective in this regard are young professionals who can reach out to male peers still in school or peers looking to change jobs.

Signs of Change

There are multiple reasons why gender disparities within the nonprofit sector persist in the 21st century.  Perhaps part of the reason that there are more women in nonprofit positions is that many married women feel less pressure to be the primary breadwinner, allowing them to prioritize the “feel-good” aspects of their careers over the pay level.  Also, nonprofits are typically seen as having a less “cut-throat” atmosphere than many companies, giving women a more flexible balance between work and home responsibilities.  In terms of wages, women who grow within organizations can find themselves on the bottom of the pay scale at each promotion, whereas men who come to organizations from the outside more often demand to be hired on their previous pay scales.  This is exacerbated by the fact that women typically ask for less money in pay negotiations than do men.

Yet signs of change are evident, not only in the nonprofit sector but in the corporate sector as well.  A recent Financial Times article reports that Wall Street trading firms— traditional domains of men—are making a particular effort to retain female specialists by arranging more flexible working arrangements for women with children and designing new programs to attract – and retain – top female applicants (“Wall Street’s gender agenda,” Financial Times, pg. 10, February 28 2007). Corporate America is beginning, however slowly, to see the benefits of a diverse workforce and is taking steps to ensure diversity.  So what if nonprofits, the leading advocates for social justice, become less diverse than their corporate counterparts?  Not only would this affect the credibility of the sector, but over time it could have detrimental effects for funding opportunities as well.  Yet as there is an ever-growing need and appreciation for the professional skills and talents of those in the nonprofit sector – whether fundraisers, grantmakers, nonprofit staff or executives – one can hope that the sector will do all that it can to attract and retain the best candidates for the jobs, no matter their gender.