Abstract

Latinos, California's largest minority population, are the most underrepresented group of color in the state's nonprofit sector, according to the first systematic study of racial and ethnic diversity in California's nonprofits.

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WASHINGTON, D.C., —Latinos, California's largest minority population, are the most underrepresented group of color in the state's nonprofit sector, according to the first systematic study of racial and ethnic diversity in California's nonprofits.

Whether measured by the race and ethnicity of executive directors, board members, or employees, Latinos hold proportionately fewer slots than their share of the state's population, Urban Institute researchers found. Latinos account for 36 percent of California's population, but hold only 6 percent of executive director positions, 9 percent of board seats, and 28 percent of staff posts.

Asian Americans are underrepresented in executive director and board positions, but the discrepancy is less dramatic. African Americans and other groups of color hold about the same proportions of leadership positions as their shares of California's population.

"Measuring Racial-Ethnic Diversity in California's Nonprofit Sector," by Carol De Vita and Katie Roeger, presents statewide findings and results by geographic region, nonprofit type, and organization size. The California Endowment, William and Flora Hewlett Foundation, James Irvine Foundation, and David and Lucile Packard Foundation commissioned the study.

Nonprofits and the California Mosaic
Minorities account for the majority of Californians. Non-Hispanic whites are the most common racial-ethnic group, at 43 percent of the population, but 36 percent of Californians are Latino, 12 percent are Asian American, and 6 percent are African American.

While people of color make up 57 percent of the population, they hold 25 percent of the nonprofit executive director or CEO positions, the study found.

California's nonprofit boards are more racially and ethnically diverse than the national average, though most board positions are held by non-Hispanic whites. Seventy-two percent of California's trustees are white, compared with 86 percent for the nation (according to a 2007 national Urban Institute study). Thirty-one percent of the state's nonprofit governing boards have only non-Hispanic whites on them, compared with 51 percent nationwide. Nine percent of boards in California have only people of color.

Seventy percent of paid staff positions are held by women and 55 percent by people of color. The typical employee is a woman of color — 38 percent of all nonprofit employees. Non-Hispanic white women are the second-largest group (32 percent), followed by men of color (17 percent) and non-Hispanic white men (13 percent). Twenty-nine percent of the organizations with paid staff have only white employees and 16 percent employ only people of color.

Nonprofit Pain: Present and Future
Sixty-five percent of California's nonprofits reported a revenue drop and 44 percent saw demand for their services increase in the current economic downturn. Thirty percent experienced the proverbial double whammy — falling revenue and rising demand.

Seventy percent of nonprofits led by a person of color reported decreases in funding; 50 percent reported increases in demand. The corresponding shares for organizations led by a non-Hispanic white director are 63 and 42 percent, respectively.

Sixty-two percent of nonprofit leaders expect more funding cuts in 2009?10 and 56 percent foresee hikes in demand. About one in three anticipate both.

What Is a Diverse or Minority-Led Nonprofit?
Three models of racial-ethnic diversity — based on definitions created by Urban Institute researchers, the Race and Equity in Philanthropy Group, and the Greenlining Institute — were analyzed in the study. If leadership diversity is the criterion, 16 percent of nonprofits would be considered diverse. If the model is based on leadership diversity and more than half the clients or customers are people of color, then 14 percent would be deemed diverse. If the definition requires most board members, paid staff, and service beneficiaries to be people of color, and the organization's mission statement indicates a desire to serve people of color, then 4 percent of California's nonprofits meet these criteria.

"Little is known about how service quality, cultural competency, and effectiveness are linked," said Carol De Vita, the study's lead author and a senior researcher in the Urban Institute's Center on Nonprofits and Philanthropy. "Do nonprofits led by a person of color and serving people of color produce better results than other organizations? Finding answers to this tough question is vital to strengthening the nonprofit sector and the communities it serves."

The Urban Institute's study partners were the Daylight Consulting Group and the Social and Economic Sciences Research Center at Washington State University. The survey, conducted between February and April, received 1,736 responses, yielding a 31 percent response rate.

According to the Urban Institute's National Center for Charitable Statistics, the most comprehensive database on nonprofits, California has about 34,250 nonprofit 501(c)3 organizations, excluding hospitals, colleges, religious groups, and small entities.

The Urban Institute is a nonprofit, nonpartisan policy research and educational organization that examines the social, economic, and governance challenges facing the nation. It provides information, analyses, and perspectives to public and private decisionmakers to help them address these problems and strives to deepen citizens' understanding of the issues and tradeoffs that policymakers face.

The nonpartisan Urban Institute publishes studies, reports, and books on timely topics worthy of public consideration. The views expressed are those of the authors and should not be attributed to the Urban Institute, its trustees, or its funders.