When setting up Relationships in NPSP and configuring reciprocal relationships based on gender, the custom "Gender" field should be created on the Contact object. Here’s why:

Contact Object:

The Contact object is where individual data, including personal attributes such as gender, is stored.

Relationships in NPSP are primarily based on Contact records, and having the "Gender" field on the Contact object allows the system to use this information to determine the appropriate reciprocal relationship.

Automatic Reciprocal Relationships:

NPSP can be configured to automatically select reciprocal relationships based on specified criteria, such as the gender of the contacts involved.

By storing gender information on the Contact object, the system can easily access this data to apply the correct reciprocal relationship automatically.

Salesforce NPSP Documentation on Relationships

Salesforce Nonprofit Success Pack Custom Fields Guide