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March 27, 2013; Source: The Guardian

Grant Thornton UK LLP released its first annual review of charitable governance practices among UK charities based on a “desktop review of the latest financial statements of the top 100 charities” as of the Summer of 2012. The head of Grant Thornton’s not-for-profit practice, Carol Rudge, writes that the top 100 charities (ranked by income) compare favorably against the FTSE 100 corporations regarding the gender diversity of their boards. For the charities, 31 percent of board slots were held by women, compared to 21 percent for the FTSE corporations. The gender balance of board chairs is less positive—only 14 board chairs out of 89 were women.

Relying on only a desktop review of the 100 charities’ financial reports, the Grant Thornton research team doesn’t dig into other dimensions of diversity, such as race, ethnicity, or age. That is truly disappointing, especially given the UK’s membership in the European Union. The EU allows for relatively free migration of people across EU member state boundaries for work and education, with a strong element of opposition to racial or ethnic bias. However, as the UK’s recent special election in Eastleigh, England, showed, where the upstart anti-immigrant UK Independence Party nearly won a seat in Parliament, all three British parties are making anti-immigrant noises in response to the UKIP’s call for EU withdrawal. Racial and ethnic issues are no less important in the U.K. than they are in the U.S. and need to be addressed straightforwardly in British society and in the nation’s nonprofit sector.

Even if 31 percent women board members is a good showing against the retrograde FTSE 100 corporations, the fact that only 16 percent of the boards were headed by women suggests that the U.K. has as much of a gender-diversity problem as the U.S. does. If we assume that racial and ethnic minorities are probably no more numerous on charity boards than women—and probably less—the report’s finding that 14 percent of the charities pay their board members for their time, at rates ranging from less than £10,000 to more than £50,000, amounting to a total remuneration of £1.9 million, does not sound good. Smaller, community-based charities, which are more likely to reflect the demographics of the populations they serve, are typically less likely to pay board members and in many cases wouldn’t even do it if they could, preferring to put their scarce resources into programs and services.

In fact, Rudge writes, “Over 55% [of the charities] identified a cut in funding, whether in the form of donations, grants or government contracts, as a key risk, yet few charities gave insight in their annual reports as to how they plan to address this risk.” That doesn’t seem to have included thoughts that they might want to cut back on their £1.9 million’s worth of generosity to their predominantly male board members. Diversity – gender and racial/ethnic – is important to promote, and payment of trustees for their otherwise volunteer labor should be avoided, especially when in the U.K. under the Cameron government’s Big Society program, charities are struggling to find vital resources. –Rick Cohen