WNLI is based in the Philadelphia area and has particularly focused on increasing diversity on the boards of this area’s nonprofit higher education and healthcare institutions. These institutions are major forces in this community with a huge impact on the people who live, go to school and receive healthcare here as well as on the regional economy. However, WNLI has also published a national study on what is not just a regional but also a national challenge, and WNLI played a leading role in a national initiative that garnered support from all over the United States and significantly increased awareness of the challenge of lack of diversity on the boards of meds and eds. 

A major obstacle to closing the gender and racial gaps on the boards of these largest nonprofits is that stakeholders of these organizations—those with an interest in how they function including employees, students and patients, donors and the members of the surrounding communities – are generally not aware of the makeup of these governing boards.  Even researchers struggle to obtain such information since most boards do not disclose it, even when asked.  In order to make such information public, WNLI formed the Coalition for Nonprofit Board Disclosure, a national initiative developed to appeal to the IRS seeking board composition transparency through an Open Letter to the IRS requesting that it add to its 990 tax form a question requiring large public charities to disclose the demographic composition of their boards. A simple additional question as there is currently a section that already requests a list of board members and responses to questions about governance.

The IRS letter has been signed by more than 400 individuals and organizations from every area of the country, including current and former college presidents, leaders in healthcare, foundation leaders, lawyers and law professors, major organizations related to education, healthcare, business and philanthropy, organizations supporting good governance, organizations of lawyers, women’s organizations and organizations representing different racial and ethnic groups.

Unfortunately, although relevant people at the IRS did meet and discuss the request with our representatives, the timing of our letter going into the presidential election and the outcome of the election itself make it clear that, for the near future, the IRS is not the answer to the need for disclosure and transparency about board diversity.

We also recognize the need to distinguish our request from the Nasdaq initiative in the for-profit sector. In view of a circuit court’s decision invalidating the SEC’s decision to support Nasdaq’s requirement that listed for-profit companies not only disclose demographic data on board composition but also set and meet numerical goals for diversity, it is important to emphasize that our request is not about imposed goals, it is only about disclosure of information. However, Nasdaq’s effort to require board demographic information disclosure shows that the need for such information in the for-profit corporate world is widely understood. In the nonprofit world, we believe such disclosure will play an important role in influencing boards of large and highly visible nonprofits to diversify; but it will not require that they do so. 

Going forward, WNLI is exploring alternative approaches, possibly at the state level, to achieving the goal of making board demographic information public.