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Best Practices to Get Budget for Your Diversity Departments

How to Get Budget for Your Diversity DepartmentLuke Visconti’s Ask the White Guy column is a top draw on DiversityInc.com. Visconti, the founder and CEO of DiversityInc, is a nationally recognized leader in diversity management. In his popular column, readers who ask Visconti tough questions about race/culture, religion, gender, sexual orientation, disability and age can expect smart, direct and disarmingly frank answers.

Every business exists to make money. Profits are a return on equity. You see this in your own life as dividends at your bank. You put your money (equity) in the bank and they pay you a percentage of the profit they make (interest) when they reinvest your money in mortgages and car loans. Even not-for-profits must make money; without it, the work can’t be done.

Diversity management, properly implemented, drives profit. For most companies this shows up as decreased costs: Human-capital diversity efforts raise productivity, lower regrettable loss and increase recruiting efficiency. We call this Stage Two benefits. Human-capital gains are tangible, measurable and significant, but market-driven gains can quickly drive share price. There’s a reason why all of the Big Four accounting firms switched from having human-resources-based people to having revenue-driving partners be responsible for their diversity efforts over the past five years. There’s a reason why their CEOs have spoken at our events. It’s not about singing “Kumbaya,” it’s about profits.

Here are some “best practices” for diversity executives to successfully get budget:

  1. You must stay close to the revenue stream. If your presentations aren’t full of facts and figures—if they don’t speak the language of business—you’re going to fail.
  2. Don’t hang out with losers. Look closely at the people in your “consortium” or “council.” Do any of them have budget? You’re going nowhere if you share “best practices” with other people who can’t develop enough of a business argument to get budget from their respective companies.
  3. Demand to be measured. Get concurrence on setting goals and the accountability to achieve them.
  4. Being repetitively asked to prove “the business case for diversity” is a cue to find another job. Spending your life answering asinine questions from the obstinately oblivious isn’t going to ever be rewarding.

Let’s get back to “Kumbaya.” Success in diversity management is contingent on aligning values with actions. Diversity management is about building the ability to have strong, trusting relationships with people as they are—organizationally and personally. It’s about getting your organization to strip away the unproductive behaviors that block its ability to build meaningful relationships with internal and external stakeholders.

You can’t do that without an honest connection to the people around you both in your community and communities around the world. Now we’re talking about philanthropy and corporate citizenship. The most successful entrepreneurs I personally know are extremely philanthropic (see our article on Steve Colson, one of the biggest donors to the Rutgers Future Scholars).

DiversityInc Top 50 participants donate an average of 2 percent of their gross revenue, and nearly half of their donations go to multicultural groups. DiversityInc also donates 2 percent of its gross revenue.

Getting budget for your diversity program is directly relative to how your company values connect with the community. Philanthropy is an excellent leading indicator of corporate (and personal) intent. Diversity and profitability are about relationships. Making that connection is your key to getting budget for your diversity programs.

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10 Comments

  • Anonymous

    What do you mean by “get budget” in item 2 of the article?
    Its mentioned again as “getting budget” in the last paragraph.
    Are you talking about corporations designating dollars or creating a budget for a “Diversity Program”?
    I may be one of those you consider obstenately oblivious.

  • This is the first time that I have seen an article that both clearly articulates and elaborates on what is often identified as “The Business Case for Diversity”. It also concretely identifies “who’s in control” of Fortune 500 companies (or large business entities), and why it is such a challenge to have CEOs and their management teams to either entertain the concept of diversity as “value added” to product, service and profit, or to challenge them in the risk of “thinking outside of the box”, meaning thinking in non-traditional and potentially stereotypical ways to not just be inclusive, but to genuinely raise profile and profit to their product or service. I enjoyed this article immensely.

  • Please define what diversity management efforts should look like for an academic health science center- considering both students and employees.

  • Anuar Miah

    What do you say to companies who says they do not have the budget to spend. I have come across HR department who give you or direct you to their website about diversity/equality policy. But that statement is standard for all the companies – they do not show any evidence what they have done or doing to become an equal opportunities employer.

  • Anonymous

    Thank you for the informative article. What are best practice companies spending annually on diversity programs?

  • Anonymous

    Great article..but question…what role does HR play when human-resources-based people are replaced by revenue-driving partners when it comes to handling a company’s diversity program?

    Also how can I be sure I get to see the response to my question..will it be emailed to me or…what do you suggest to make sure i don’t miss it? Thanks, Dr. K.

  • A useful and thought-provoking article; but an article that is directed toward for-profit organizations. It would be helpful if you could write an article that is directed toward non-profit service organizations, like a department in the federal government. Instead of focusing on the profit margin, you could discuss the importance of diversity for recruitment, accomplishment of your organization’s mission, and the ability to reach those who use your services.

  • When I facilitated diversity classes they were geared to corporate diversity. I always added the personal element, hoping everyone would take it home to rethink their attitudes towards neighbors and people they did not know. So often, one dislikes someone because they just don’t have the right look.

  • Wonderful article and the timing couldn’t be more right. Although my field of work primarily focuses on the development and implementation of learning tools to raise awareness ot diversity related topic and develop our diverse populations, I catch myself asking, “what is ROI on these efforts”? Aside from this I am wondering, when you write of Stage 2 which includes increasing engagement and productivity, decreasing regrettable loss, increasing quality of labor pool, reducing exposure to potential liabilities (law suits) and ease of recruiting top talent, is there data to support this? How much of an increase in engagement and productivity would one expect? What impact does this have on attrition and recrutitment? Is there research that supports this? Many thanks!

  • Anonymous

    That’s all very interesting … but I missed something:

    How do you measure (demonstrate) the return on investment?

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