Diversity advocates turn their attention to nonprofit boards

A new campaign is urging the IRS to require large nonprofits to make public the racial and gender composition of their governing boards

Pioneers in tracking board diversity at Massachusetts companies: Toni Wolfman (right) and Patricia Flynn.Susan R. Symonds

Toni Wolfman knows that tracking diversity can lead to . . . more diversity.

After retiring as a partner at Boston law firm Foley Hoag, she spent two decades helping The Boston Club produce an annual report on women directors and executive officers at the biggest publicly traded companies in Massachusetts.

As my colleague Shirley Leung has reported, when Wolfman and Patricia Flynn, a Bentley University professor, put out their first results in 2003, they found that women held 9 percent of board seats at the state’s 100 largest public companies. By the time they released the 2022 edition, women held 30 percent of directors’ positions and 21.5 percent of executive officer jobs.

Flynn, who has retired from Bentley, and Wolfman are handing over responsibility for The Boston Club report to others. But Wolfman is still volunteering for efforts to push diversity — this time in the nonprofit world.

On Thursday, she was coordinating local communications for the Coalition for Nonprofit Board Diversity Disclosure, which released an open letter urging the IRS to require large nonprofits to make public the racial and gender composition of their governing boards.

“This is in some sense similar to what we’ve been doing on the corporate side,” Wolfman said. “Diversity has the same benefits for nonprofits as for corporations.”

The coalition is asking the agency to add a section to its Form 990 for nonprofits to provide aggregate information on how directors self-identify by race/ethnicity and gender.

The group said it also supports including LGBTQ+ and disability disclosure on the IRS form, which is filed annually by tax-exempt organizations and contains information on their finances, operations, and leadership. Its proposal wouldn’t apply to the smallest nonprofits, which submit their information on the shorter Form 990-EZ.

“We believe that making such data available . . . will help advance diversity, equity, and inclusion, encourage transparency, and — most importantly — enhance the governance of all affected organizations,” the letter said.

Other Boston-connected supporters who signed the open letter include Drew Faust, a Harvard University professor and its former president; Nannerl O. Keohane, president emerita of Wellesley College and Duke University; Eneida Roman, executive director of Amplify Latinx; and executives from The Boston Club, The Boston Foundation, Eastern Bank, Eos Foundation, and YW Boston.

The effort evolved out of work done by the Women’s Nonprofit Leadership Initiative, a Philadelphia-area nonprofit that has been working to advance gender diversity on the boards of educational and medical organizations.

As a model, the new coalition cited the Securities and Exchange Commission’s approval last year of an initiative by the Nasdaq stock exchange to require its member companies to report board composition data.

“After years of scrutiny or pressure, leaders in the for-profit community have finally recognized that board diversity makes for better decisions and reduces risk,” Jane Scaccetti, a certified public accountant and member of several for-profit and nonprofit boards, said in a statement. “It is time for the boards of nonprofits that serve and employ diverse populations to do likewise.”

Corporate diversity has expanded as research shows that companies with diverse leadership and workforces often outperform rivals with less diversity. The coalition said board diversity in the nonprofit sector has not generated the same degree of interest and advocacy.

An IRS disclosure requirement would make nonprofits pay attention to diversity, Wolfman said.

“The burdens aren’t great. It’s all self-identification [of demographics]. It’s only aggregate disclosure,” she said. “If it survived with the SEC, it should survive with the IRS.”

Correction: An earlier version of this story incorrectly identified an organization that signed the open letter to the IRS. It was YW Boston.