The Australian non-profit sector controls significant assets and workforce. It spends 5% of the Australian GDP annually. A small improvement in the sector’s effectiveness in delivering its services means big gains for the Australian community.

Improved leadership and management capability is the critical difference in creating effective and efficient non-profit organisations.

Yet the sector struggles to invest the money and time to attract, develop and retain its people. Non-profits typically do not have access to sufficient funding for staff training. Only a small percentage of donor funding is dedicated to general operating support or administrative overhead, and 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 results. 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 non profits 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 strong results! Leadership capacity at all levels is what counts most in the long run effectiveness of any organisation. Non-profit organisations are no different.

As Australian non-profits are called on to do more, it is important they operate more effectively. The big opportunity to increase the sector’s social benefits is by investing in building the capabilities of its people.

This is the challenge ASF has set out to tackle.