Thanks for bringing up this important subject, which I’ve written and spoken about frequently. I agree that if collecting gender information is actually necessary, having a fill-in-the-blank option is best. But I don’t mind having an “Other” option alongside “Male” and “Female”, as that signifies to me that the form designers acknowledge the existence of non-binary genders. I tell people that best practice is to make gender fill-in-the-blank, second best is to have the options “Female”, “Male”, “Other”, and “Decline to state.”
It’s also important to note that “transgender” is not itself a gender. Though I know of a handful of people who do identify simply as “trans”, most identify as trans women, trans men, agender, bigender, genderqueer, etc. Having a multiple checkbox option is a good idea; that way trans people who are comfortable labeling themselves as such can choose that option along with “male” or “female” if that fits them, and more accurate data can be gathered.
A note on Facebook also: Although they have now allowed custom genders and a “singular they” pronoun option for some time now, when you sign up for a new account you are still required to choose Female or Male:
So while there is a nod to gender diversity on the surface, Facebook still wants to know (what they think of as) our “real” sex, which erases non-binary people like myself.