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Large nonprofits should disclose the race and gender of their board members, coalition urges

In an open letter sent to the IRS and the U.S. Department of the Treasury, advocates for the change said there’s a lack of transparency surrounding the members of nonprofit boards.

None of the 46 major “meds and eds” nonprofits in the Philadelphia area — namely, the region’s major nonprofit health systems and universities — disclosed the demographics of their boards for the public to see online.

The lack of transparency, documented in a 2022 regional report, is now prompting calls for federal regulators to impose new requirements on some of the country’s largest and most influential nonprofits.

A coalition of leaders from dozens of those organizations has asked the Internal Revenue Service to require nonprofits to disclose the racial, ethnic and gender demographics of their boards.

In an open letter sent to the IRS and the U.S. Department of the Treasury, the group, called the Coalition for Nonprofit Board Diversity Disclosure, said there’s a need for more scrutiny and disclosure about the board members of many large nonprofits.

That’s true in Philadelphia as well as nationally, said Jane Scaccetti, a former chair of the board of Temple University’s health system and the chair of the strategy committee of the Women’s Nonprofit Leadership Initiative, a Philadelphia-based group that spearheaded the open letter.

In its 2022 report, WLNI found that nearly 55% of all “meds” trustees and 48% of all “eds” trustees in the area were white men. Men and women of color made up only 19% of meds trustees, and 24% of eds trustees.

» READ MORE: More women and people of color on university and hospital boards, report says, but few chair them

Researchers discovered it was difficult to get accurate information, she noted. Some institutions provided photos and biographic information on their websites, but none of the local organizations studied shared data on the overall demographics of their boards. It took follow-up phone calls to get the information, and 13 out of the 46 local institutions didn’t provide responses.

Institutions’ boards should strive to reflect the communities they serve, Scaccetti said.

“They impact our health, the education of people,” she said. “We would hope that they represent the communities that they’re servicing.”

Signatories of the letter sent to the IRS include the presidents and CEOs of nonprofits from around the country and many from the Philadelphia region, including Drexel, La Salle, and Temple Universities.

The letter asks the IRS to add a question on its Form 990, the tax filing for nonprofits who draw in more than $200,000 a year, asking organizations to disclose data on how its board members “self-identify by race/ethnicity and gender.” The letter asks for boards to disclose this “in aggregate” — not by outlining the individual identities of board members.

The coalition also said it would support “including LGBTQ+ and disability disclosure as well.” It’s not asking the IRS to require that boards appoint a certain number of women or people of color, but Scaccetti hopes that more transparency will encourage more boards to diversify their membership.

Currently, nonprofits must disclose the names of their board members, whether they are paid, and how many hours they work.

“It would not only provide the public with information it needs and ought to be able to access, but it also would signal that board diversity is a good governance issue,” the letter reads.

Scaccetti noted that the federal Securities and Exchange Commission already requires publicly-traded Nasdaq companies to disclose demographic data on its board members.

An IRS spokesperson did not return a call for comment.