Last week, lawmakers in South Carolina heard a bill encouraging nonprofits to report sensitive demographic information about their leadership to the state. The state’s Senate subcommittee on Regulatory and Local Government considered S.B. 203, which would give nonprofits in South Carolina the option to include demographic data about their organizational leadership in certain official filings.
This applies when nonprofits file official documents like incorporation papers or registration forms to raise funds in the state. The reportable information includes details like age, education, gender, race, salary, military service, disability status and leadership experience.
While technically optional, this disclosure bill is merely a step away from mandated demographic collection by the government, which should not be involved in a nonprofit’s operations.
When nonprofits are forced to release board or leadership demographics, serious concerns for donors and the philanthropic community are raised as such disclosures infringe unnecessarily on leadership’s personal information and privacy. This breach of privacy could discourage qualified individuals from joining boards or applying for certain jobs, reducing the diverse perspectives crucial for strong governance. Additionally, encouraging demographic reporting shifts nonprofits’ focus away from their core missions, focusing on arbitrary box checking instead of community impact.
Instead of focusing solely on the demographic makeup of their organizational leadership, nonprofits should have the freedom to focus on True Diversity, an equality-based and holistic approach that values each person as a unique individual. Excellent results are best achieved by bringing together people with diverse skill sets, backgrounds, perspectives and personal experiences to further a common mission. Each organization is in the best position to know what types of diversity in leadership and staffing will best support its mission—and thus strengthen the communities it serves.
Philanthropy Roundtable continues to monitor similar bills across the country in states like Hawaii, New Jersey and New York. Last year, the Illinois legislature passed a comparable law, which is now involved in litigation. If South Carolina passes S.B. 203, it might not be long before demographic disclosure would be mandated for nonprofits and expanded to include collection of board information.
The Roundtable submitted testimony to the subcommittee encouraging its members to table the legislation.
