Cultural Intelligence, the New Frontier in Nonprofit Financial Management

First there was intelligence quotient (IQ) then emotional intelligence. Now, there’s cultural intelligence. Nonprofit financial management success must include all three in today’s connected world to be successful.

Different Types of Intelligence

The original IQ tests or intelligence quotient was derived as a test for army soldiers in the early 20th century. The same pioneers who brought you IQ tests developed things like the SAT test and other aptitude tests. These early data scientists believed that nearly every personal characteristic could be measured and quantified.

Peter Salovey and John D. Mayer coined the term ‘emotional intelligence’ in 1990 to describe an individual’s ability to  “monitor one’s own and others’ feelings and emotions, to discriminate among them, and to use this information to guide one’s thinking and action”.  David Goleman, a writer for The New York Times, popularized their work in a book released in the 1990s, and the term became common parlance or shorthand for the ability to read and utilize emotional information in conversation.

Today, add to that a new term: cultural intelligence. Cultural intelligence refers to an individual’s ability to recognize, interact with, and respond appropriately to people of other cultures.

In the world of nonprofit financial management, cultural intelligence is rapidly becoming as important as emotional intelligence. While intellectual giftedness and intelligence is widely recognized as a desirable attribute, without emotional and cultural intelligence, those with high IQs tend to be like Sheldon Cooper on the television show “The Big Bang Theory” – smart, able to do their work easily, but difficult to live, work, and interact with on a daily basis without wanting to tear your hair out.

Examples and Benefits of Cultural Intelligence

Every one of us hails from a unique culture. That culture may be white, suburban, and middle class, Jewish and upper class, or Chinese immigrant. Each culture brings with it a series of cultural norms in dress, behavior and attitude that when understood and respected, can serve as an icebreaker in the business world.

Take the example of two job candidates for a position in nonprofit financial management. Both candidates are white women who hail from middle class backgrounds. But Candidate A has traveled widely during and after her college years, spending time working on volunteer projects in Haiti, the Dominican Republic, and Thailand. Candidate B does not have that richness of cultural exposure or interaction. Which candidate is better for nonprofit financial management in an organization that interacts on a global basis?

If your staff consists primarily of people from a homogenous culture and interacts only with people of the same culture,  Candidate B may be perfectly suitable. Candidate B, to be fair, may have a deep and abiding respect and admiration for other cultures, too. But Candidate A has actually lived, worked, and spent time in other cultures, immersing herself in their traditions and norms. She may more easily fit in a meeting with people from Caribbean, Central American and Asian cultures.

All people can learn to be aware of other cultures and respect their norms. Most people know, for example, that in Jewish culture, men wear yarmulkes inside the synagogue and that Amish people prefer not to have their pictures taken. Respect for each culture means wearing appropriate clothing when entering a house of worship and adhering to the ‘no picture’ rule if you happen to drive by an Amish barn raising on your next trip through Pennsylvania, Indiana, New York or Virginia Amish country.

Practical Application of Cultural Intelligence

Respect is fine and a welcome attribute. But what is the practical application of cultural intelligence?

In some instances, it creates bonds of respect between individuals. Those who demonstrate respect for other cultures, such as dressing conservatively when visiting Middle Eastern countries or not making eye contact in an Asian business meeting, may bridge the gap more easily between colleagues. This creates common ground, shared understanding, and the basis of trust for future business dealings.

Inside your nonprofit organization, you are likely to encounter people from many, diverse cultures. We live in a world where cultural identity and embracement is the norm rather than the exception; we live and work in the United States in an immigrant culture, one that is more likely to find a place for those who dress, look, or behave differently than the standard culture.

Those who possess cultural intelligence will be far better equipped to make business connections and handle themselves gracefully across all cultures. Combine that with high IQ and strong EQ, and you’ve got a winning combination for success.

Beck & Company

Since 1987, we have helped many nonprofits in the Washington D.C. area and along the Eastern seaboard with their accounting and financial management needs. We provide audit, tax, accounting, and consulting service that addresses all aspects of a small to mid-sized nonprofit organization’s business. Contact us or call 703-834-0776 x8001.

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