Radical transparency: Confronting nonprofit governance to truly eliminate discrimination and harassment

In Canada, the pre-pandemic nonprofit sector is a multi-billion-dollar-per-year sector that employs 2 million Canadians. However, the pandemic has laid bare the number of structural and systemic inequities within our sector. Knowing this, can we confidently expect the nonprofit sector to lead on issues of racism and other deeply rooted forms of systemic discrimination?

The Ontario Nonprofit Network (ONN) reports 80% of employees in the sector are women. Women often experience inequality in compensation and unsafe systems for reporting discrimination and harassment, especially women who are immigrants, racialized, and women with disabilities. Women also have limited opportunities for advancement into the management or executive levels of their organizations.

This sector claims to lead social good. Yet, when it comes to systemic racism and discrimination complaints, there are far too many outdated human resources practices and poor governance models that need to be revisited, reviewed and mostly tossed out the door. As a former CEO and also a former board chair, I’ve been on both sides of the aisle and believe that now is the time to reimagine innovative governance models that will hold the nonprofit and charitable sector accountable when these concerns are raised. This essay discusses how radical transparency can provide some answers to the short-comings in traditional governance when dealing with discrimination.

Governance: more than just a board of directors

In Canada, nonprofits and charities have legal requirements to have boards of directors, ideally to ensure responsible and efficient management oversight. Since boards usually comprise well-meaning volunteers, there may reluctance to unpack the role that they and senior staff play when discrimination complaints are raised. They are just doing their best, after all. But the current status quo of what’s best is failing.

Too many boards of directors and senior management teams fail to achieve proportional diversity representation of the communities they serve. And, where there is a lack of diversity in leadership, there may be high rates of oppression.

All too often, governance in the sector becomes synonymous with the boards of directors. However, this misunderstanding of impactful governance can prove damaging when directors assume, either intentionally or not, too much or too little control over the organization.

Instead, governance can and must be a power-sharing arrangement between directors, the executive, staff, key stakeholders, volunteers, funders, donors, and supporters.

The ONN sums this up well: “Governance is an ecosystem with many players, influences, and factors. … We need to critically examine the very design of governance so that effective governance is not wholly dependent on maintaining an effective board.”

Weak governance structures that cede too much power to the board of directors, or to the executive staff, miss and obstruct the opportunities for staff, volunteers and other stakeholders, including recipients of the charitable work, to bring matters of systemic discrimination forward. All too often, people who speak up are quietly forced out due to exhaustion, marginalization, and reprisal — and in some cases, through terminations.

People who do this vital work carry an additional burden: They care deeply. They deserve to make a fair and decent living in safe and discrimination-free environments. But caring for the cause can make good people feel guilty about calling out poor behaviour, especially if they feel forced to break their silence publicly. Voices of internal dissent may be uncomfortable, but when they speak truth to power about discrimination, we need to champion these experiences and seize the opportunity for change.

Without mechanisms that deincentivize discriminatory behaviour and encourage equitable actions, we arrive at exactly where we are today — the status quo. If the sector is sincerely interested in addressing anti-Black racism, systemic racism, and other forms of discrimination, we need to overhaul some of the current systems that have led us here.

The change required in the nonprofit sector requires radical transparency. Transformation begins by challenging the heart of governance and acknowledging that existing governance models are poorly equipped to proactively, effectively, and fairly deal with critical matters of discrimination and harassment.

The legal requirement to have a board of directors will not change anytime soon, but their role should be balanced along with staff, volunteers, members, and donors when issues of discrimination rears its ugly head. And make no mistake, when people who raise these issues are not treated with dignity, including acknowledging the legitimacy of their experiences, the situation can get very ugly.

The roadmap to radical transparency

The root and rot of discriminatory behaviour in the sector stem from poor governance models that provide more performative lip service than real mechanisms to end biased and discriminatory practices. If governance is where the root problems originate, then it may also be where we find some of the answers.

The sector needs to come clean about the collective millions of dollars spent every year on governance, legal, and other consultants. If spending on legal and governance expertise is transparent for every nonprofit and charity, and the numbers seem disproportionate against overall operating costs, this might be a red flag for stakeholders, especially donors. If these costs are released as an aggregate, and it appears to be bloated, wouldn’t that be an indicator that there may be a problem in the sector?

While the Canada Revenue Agency (CRA) does disclose the operational costs for all registered charities, it is not a detailed disclosure. Expense breakdowns for legal fees, governance and other expert consultants must be publicly accessible. The same must hold true for nonprofits that are not registered charities. This measure of transparency could provide an “early warning system” when persistent issues of racism and discrimination remain unresolved, and can certainly be an indicator for other governance-related concerns.

Lastly, federal laws must be amended so that the CRA can publicly disclose matters of serious non-compliance with a registered charity. Currently, this information is only available after a charity has been audited by the CRA and their charitable status has been revoked or annulled. These audits may take years to complete. In the meantime, donors, supporters, and the public may be blissfully unaware that a serious problem may be brewing and are unable to make informed decisions about donations, volunteering, potential partnerships, and sponsorships.

The by-laws: It’s time to codify

By-laws and articles of incorporation are the primary governing documents for the nonprofit sector. By-laws outline systems of accountability for directors, management, and members and typically include rules about meetings, membership, roles of directors including the removal of directors, and more. They may also contain clauses on grievances. These grievance clauses are all too often reproduced boilerplate text.

Let’s be clear here folks: If the policies and processes to address discrimination grievances are not found within the organization’s governing by-laws, it can be very challenging for employees, volunteers, members, and donors to hold the organization’s board and executive accountable.

It’s time to codify responsibilities and grievance processes in nonprofit and charity by-laws to specifically address protected human rights grounds related to discrimination and harassment, bullying, and whistle-blowing. These protections must also be addressed in employment agreements and human resource policies. And, for greater transparency, by-laws must be published online.

Protecting all stakeholders in nonprofit operations from discrimination and harassment is not merely a human resources matter. These are issues that can upend and corrupt organizations from the inside out and ultimately divert and obstruct the core mission. Though not a nonprofit, the recent damning external review of the Canadian Museum for Human Rights found “pervasive and systemic racism” which led to a toxic culture at the museum and ultimately contradicts the museum’s goals of upholding respect for human rights.

The failure to include these issues, and protocols for redress, within the core governance documents of any organization is ultimately a failure of good governance.

Non-disclosure agreements must be lifted

Free speech is constitutionally-protected in our democracy. The sector must lift non-disclosure agreements (NDAs) on issues related to protected human rights grounds. In 2019, a former staffer who was sexually harassed at a Canadian NGO in 2011 broke an NDA on social media after becoming frustrated and heartbroken that abuses at this organization continued. In recent weeks, other staffers including Amanda Maitland from WE Charity have come forward to share their stories of anti-Black racism and systemic discrimination.

It’s shameful in Canada that organizations with social justice values require whistle-blowing employees to sign these gag orders against free expression. Equally as problematic is the practice that some nonprofits engage in when they threaten current and former staff and volunteers with defamation lawsuits if they choose to speak out publicly. This cold chill runs counter to ending racial injustice and oppression.

We can’t resolve systemic discrimination when people are too afraid to speak out because of the potential negative financial, legal, health, and reputational consequences. These are people who are often already in financially precarious situations because of decades-long societal structural discrimination. If they choose to speak out, their stories must be heard and become part of our collective consciousness to transform the diversity disparity in the sector.

We also need an annual organizational disclosure to the Canada Revenue Agency or another appropriate body, to report on the number of complaints made on protected human-rights grounds, including the number that are resolved and how many are still open. If we can’t measure the scale of discrimination complaints in the sector, it’s going to be awfully hard to pat ourselves on the back for how progressive and fair we are.

We need diversity data and salary disclosures

The sector needs diversity disclosures related to boards, executives, and management. And, we need corresponding cross-sectional salary band information. We cannot assume that having greater diversity on boards, executive, management, and staff will translate into equitable compensation. As a former CEO who was not compensated fairly for several years, I know that ticking a diversity checkbox is insufficient.

Privacy rights can be maintained when these data points are released to the public as an aggregate. Confidence must be built with data and facts.

The sector needs to commit to a new standard that includes salary pay bands with all recruitment postings.

And perhaps it’s time to report salaries for people in the nonprofit sector who are paid $125K or more. These folks work for organizations that receive significant tax benefits. Can we truly be equitable if the salaries of the highest paid people in the sector are not transparent? (While the CRA already reports salary ranges for each registered charity, they do so at approximately $40,000 intervals until $350,000 — and then the range thereafter is “$350,000+.” Hardly transparent for some of the biggest charities in the country.)

Diversity disclosures, cross-sectional salary information, grievances, and salary disclosures must be collected to ensure that the changes we need in the sector are implemented. Without progressive disincentives for discriminatory behaviour, we may continue to see incremental cosmetic adjustments that do not result in meaningful change

A call for greater oversight

Canada needs to establish an external structure to represent and regulate the sector, including investigations that are required by law, when issues of discrimination are raised. It’s a fundamental conflict of interest when the folks who hold the purse strings are often the ones determining the scope and recommendations of the investigation. Believe it or not, in some cases the people in charge of an investigation are the ones being investigated. An independent body is required to ensure fairness and objectivity.

Over the past few months, we have witnessed some remarkable and unprecedented global calls to end anti-Black racism, systemic racism, and discrimination. Many organizations and leaders are making commitments to “change.”

Meaningful change can only come when the burdens of discrimination are shifted and shared so that everyone in the sector has fair and just access to evolving power dynamics when concerns of discrimination and harassment are raised. While there are talented equity, diversity, and inclusion professionals working hard to bridge the diversity disparity in nonprofits across the country, we can’t wait for them to bring everyone else up to speed. We need to help them so outcomes can be fair, objective, and transparent to stakeholders and the public.

Based on my experiences with systemic racism and discrimination at a national charity, I believe that we must focus on the impacts of discriminatory words, actions, and behaviours. (People who raise complaints about systemic discrimination are not required to prove intent. Why, you might ask? Because we don’t live in other people’s heads and cannot prove there was or was not, an intention to discriminate.) Instead, we can look to patterns of sustained behaviours that include microagressions and unconscious bias. The remedies above address how radical transparency can impact these outcomes and create real change. My simple truth is people don’t seem to behave so well when left to our own devices. We need incentives to encourage good behaviour and disincentives to disrupt the status quo.

Radical transparency ensures that we can govern words, actions, and behaviours so that people, their dignity, and our collective human rights are front and centre in Canadian nonprofits and charities.