The not-for-profit (NFP) sector touches virtually everyone in Australia. Many Australians, donate to charities or are members of or volunteer with a community organization. Yet few comprehend the scale or significance of what the sector does collectively.
NFPs control significant assets have a large workforce and are growing in size and importance.
8% of the Australian workforce is employed in the sector and an additional $15 billion of wage equivalent work is contributed by volunteers each year.
There are around 600,000 NFPs in Australia -
almost 60,000 are economically significant. All contribute to the
creation of vital social capital. The sector spends 5% of the Australian
GDP, contributing $43 billion annually. It is growing at almost 8% each
year. For more information about the Australian NFP sector see ProBono Australia; Factsheet: The Not For Profit Sector in Australia, 2010.
A small improvement in the sector’s effectiveness in delivering its services therefore means big gains for the Australian community.
Improved leadership and management capacity is the critical difference in creating efficient and effective NFPs.
Yet the sector struggles to invest the money and time to attract, develop and retain its people. NFPs typically do not have access to sufficient funding for staff training. Only a small percentage of donors’ funding is dedicated to general operating support or administrative overhead, while the larger part is directed to specific programs.
In considering where to donate, donors often focus on input measures (e.g. administrative overhead) as a proxy for indicators of impact. The general donor view, changing ever so slowly, is that administrative overhead is bad and the less the better. This approach reinforces the belief that money and resources devoted to leadership and management capacity building in NFPs generally should be kept to a minimum.
This is self-defeating – no successful for-profit organisation would intentionally under-invest in the very people accountable for delivering results! Leadership capacity at all levels is what counts most in the long run effectiveness of any organisation. NFPs are no different.
There are many ways to improve the effectiveness and capability of Australian NFPs - research and benchmarking, learning through networking, mentor and advisory programs and formal and informal learning and development training. A number of different organisations currently provide a range of these services.
ASF is the only Australian organisation solely focused on facilitating access to and scholarships for Australian NFP boards and managers to undertake education, training and development programs that improve their ability to lead and manage.
As Australian NFPs are called on to do more, it is important they operate more effectively and maximize their impact. The big opportunity to increase the sector’s social benefits is by investing in building the capacity of its people.
This is the challenge ASF has set out to tackle.