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Hetal Sheth 3/30/22 2:42 AM 4 min read

Can Impact Work Without Diversity Be Racist?

Social enterprises, nonprofits, and impact investors all share one mission: driving positive impact. Can impact organizations reinforce racial inequalities in the communities they serve, doing more damage than good? The short answer is yes. This article talks about the challenge of diversity and inclusion within the social impact field and what organizations must do about it.

  • Diversity, Inclusion, and Impact
  • Connect to Communities You Serve
  • Lead by Example
  • Dig Deeper with Data

Diversity, Inclusion, and Impact

Let’s start with a simplified definition of impact. The impact is the positive or negative mid-to-long term effects of a program or intervention. All impact organizations seek to make a positive impact. Yes, there can be unintended negative effects as well. Unintentionally exacerbating racial and gender inequalities is one example of a negative effect.

Read More: Case study: Transforming Families with Affordable Housing

The Problem

In terms of diversity and inclusion, impact investing and international NGOs have a long history of inequality. Impact investing diversity in the US remains low. Only 1.3% of funds are controlled by women or Black, Indigenous, and people of color (BIPOC). 

In international development, a study from 2013 found that just 10% of board members of international NGOs are from Africa despite African countries being the recipient of the most international aid on earth. In the United States, the average board of directors for nonprofits is 86% white. Global monitoring organization of diversity and inclusion Fair Share found that out of 45 women-led organizations, just 4 were led by Black, Indigenous, and women of color (BIWOC).

The risk then, without the right representation, is that impact investing organizations perpetuate the diversity inequalities they are experiencing rather than improve them.

Read More: 4 Ways Corporations Can Fight for Social Justice

The Benefits of Diversity

Beyond social benefits, the business case for diversity and inclusion is clear. Studies from multiple sources confirm that companies that are more diverse perform better financially. That’s a bottom line that is easy to comprehend.

Lead by Example

The first thing an impact organization can do to improve equity and inclusion is start from within. Recognize gaps in your own diversity and do something about it. Being open and transparent with your organization’s demographics leads to greater accountability.

Look beyond staffing. Diversity in board leadership and executive management is critical. Organizations that serve a certain community need to represent that community at the highest levels, not just at the program management level. Hire members of the community as staff in decision-making positions. Re-tool job descriptions so they don’t exclude BIPOC by default. Reassess your status quo expectations (likely based on colonialism-informed and racist ideas of professionalism). 

Remember your impact focus. If your mission is serving an unhoused population, what is more important: a bachelor’s degree or lived experience?

Read More: 5 Ways Economic Development Organizations Should Enrich Impact Data

Connect to Communities You Serve

The formula for diversity isn’t just ‘add a woman and a person of color and stir’. Organizations need to build strong, lasting relationships with the stakeholders they work with. Community engagement is critical.

At the program level, a top-down approach blindly leaves stakeholders as mere beneficiaries of services rather than engaged in the process. Stakeholders need to be part of the planning, decision-making, and implementation of programs and services in their communities. Organizations can do this both internally (via hiring) and externally (seeking stakeholder feedback). 

Read More: Learning stakeholder impact through impact data analytics

Dig Deeper with Data

Data is key to improving diversity and inclusion. It can also be a manifestation of the problem. Insensitive data visualizations perpetuate misconceptions and can do further damage. Make sure the color choices, icons, and language in your data are appropriate.

When it comes to impact measurement and management (IMM), data must go beyond surface-level measurements such as the number of women, BIPOC, etc. Disaggregated, multidimensional data gives a clearer picture. Remember, data collection must be done with sensitivity by trained frontline staff. Proper wording and respect for the self-identification of the stakeholders must be observed.

As we already know, IMM done right must also include the stakeholder’s voice. Feedback from the stakeholders answers the “why” and “where” of racial injustices that occur in their community. Amplify stakeholder voices to speak honestly about the benefits and drawbacks of an organization’s programs and services. Given the blind spots of privilege, an organization will never know if there is racial bias in their program if they don’t ask stakeholders.

Read More: Purposeful Social Impact Analytics 

Diversity is an Asset

Whether it’s for a company’s bottom line or for social justice, diversity and inclusion improve your work. For impact organizations, it’s critically important to mirror the communities you serve in leadership and the workforce. Strong community connections and the impact measurement done right reduce negative and augments positive impact. Sopact is committed to revealing the stakeholder voice in IMM.


Photo: Unsplash 


Hetal Sheth

The founder of Ektta, and co-founder of SoPact, Hetal holds a deep passion for establishing enduring impact management practices in the social sector to have built-in learning and accountability.