NFP Employee Investment Failure - Report

A lack of investment in professional development opportunities for employees means the Not for Profit sector is not having as great an impact as it could, according to a new major report.

Researchers from The University of Western Australia Business School’s Centre for Social Impact (UWA CSI) investigated the role of training and development in enhancing the capacity of NFP organisations to create social change.

According to the research, despite an acknowledged value of around $58 billion and the involvement of 4.6 million volunteers contributing $15 billion worth of wage equivalent value, the sector is constrained by limited resources.

The researchers said that because those working in the Not for Profit sector often put the immediate needs of those they serve first, investment in professional development and training, which is a given in the for-profit sector, “is seen as an overhead not an investment”.

Findings from the research indicate targeted training of those working in the Australian Not for Profit sector results in organisations becoming more effective as a result of enhanced staff capacity. Despite this, it is estimated only 58 per cent of Not for Profit sector employees undertook professional development this year.

Led by Professor Paul Flatau, The Learning for Purpose: Social Return of Education and Training study on the role of professional development in the NFP sector is funded by the Origin Foundation with the active support of the Australian Scholarships Foundation.

“The Australian Not for Profit sector is an important part of the Australian economy and has a long history of supporting society’s most vulnerable and disadvantaged as well as sustaining local communities, the arts, the environment and Australian sport,” Lead Researcher Ramon Wenzel said.

“It’s important to understand that the ability of Not for Profit organisations to respond to environmental challenges and to realise their mission – to create social change – depends to a substantial extent on the knowledge, skills, and abilities of their people.”

Based on the report the research team also argued that many working in the sector simply cannot afford training, or would need support, which they often cannot access. They said 33 per cent of senior NFP executives surveyed had no designated budget for their professional development, while those in small NFP organisations have been found to fund professional development through personal financial investment.

Wenzel said the study supports the recent Productivity Commission report on the Australian NFP sector which identified a lack of key competencies as a major limitation for the long-term viability.

He said other early findings suggested that NFP organisations could adapt to significant challenges through more engagement with both formal and informal work learning.

“Over the next several years our research will continue to investigate and value how training and development can improve the sector’s ability to enable social change. Ultimately, we seek to improve the means through which individuals and organisations gain and sustain the key competencies needed,” he said.

Sean Barrett, Head of the Origin Foundation, said it was important that all organisations, including NFPs, have the tools and empirical evidence to adapt and address societal needs.

“Gone are the days when the Not for Profit sector could explain itself by saying:  ‘We are good people doing good work’. Today, more is expected of the sector.  More in terms of performance.  More in terms of social impact,” Barrett said.

“But while more is expected, this is not necessarily accompanied by more resources, financial and other.  This poses management challenges for the sector on how to increase performance.

“This research has the potential to be a game changer by encouraging Not for Profits to increase their investment in training and development.  But, perhaps more importantly, it will challenge funders who are traditionally reluctant to support so-called capacity building.”