July 23, 2015

Media Release: New research shows investment in training and Development can bring economic benefits and long-term viability to the Australian Not-for-Profit sector

The Not-for-Profit (NFP) sector touches every Australian by addressing social disadvantage, civic awareness, community cohesion, education, employment, emergency relief, cultural heritage, biodiversity, artistic creation, sports and well-being. Through 600,000 organisations, it contributes $55 billion towards Australia’s GDP, employs 1 million people – about 9 per cent of the overall workforce – and engages over 5 million volunteers contributing an additional $15 billion in unpaid work.

Yet, the Australian NFP sector is not having as great an impact as it could due to the unrealised potential of professional development. Due to funding constraints, investment in training and developing employees is well below what the NFP sector requires, according to researchers at The University of Western Australia Centre for Social Impact (UWA CSI) and their partners the Origin Foundation and Australian Scholarships Foundation.

The three year UWA CSI study, Learning for Purpose: Researching the Social Return on Education and Training in the Australian Not-for-Profit Sectordemonstrates that the success and sustainability of the Australian NFP sector hinges substantially on its people. To go from ‘good’ to ‘great’, it calls upon funders, the public government and even NFP leaders and organisations themselves to see professional development as an important investment rather than an overhead. 

The seven key findings show that developing NFP employees and volunteers has multiple positive effects for the individuals, the organisations, and the purposes they serve. It reveals training can improve an employee’s role clarity, job knowledge, and self-confidence, and as such lead to better decisions and leadership behaviours, reduced costs, more funding, better services and beneficiary well-being.

Lead researcher, Dr Ramon Wenzel from The University of Western Australia said: “For the first time we can demonstrate on the basis of research that workforce development really works for the Australian Not-for-Profit sector. Small Not-for-Profit organisations appear most challenged to get their people to the next level. It’s not about making them work harder, but smarter.”

“Australian Not-for-Profits are under enormous pressure to deliver key services that for-profits and governments do not. It is now time for a conversation on how each organisation will continue delivering services in the face of change if they do not improve the knowledge, skills and abilities of their people.”

Sean Barrett, Head of the Origin Foundation which funded the study, said it is important funders and 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,’ Mr Barrett said.

“Today, more is expected of the sector: more in terms of performance, more in terms of social impact. We have to change the public perception about the actual costs and benefits of workforce training development. This will challenge funders who are traditionally reluctant to support so-called capacity building in favour of front-line service delivery.”

Learning for Purpose was produced in partnership with the Origin Foundation and the Australian Scholarships Foundation. The report is available to download here.

 

KEY FINDINGS

 

#1 Training intensity is highly variable across organisational size, job role and sub-sector.

About 48 per cent of all NFP employees and volunteers receive at least one formal professional development experience per calendar year, though this is highly variable across the Australian NFP sector. Members of governance boards, volunteers, and small NFP organisations in general receive less training than others in the Australian NFP sector.

 

#2 NFP organisations that systematically develop their people do better.

Data from 697 Australian NFP organisations shows that organisational human resource development practices and policies positively affect organisational competence and capability. This in turn engenders organisational performance, which significantly facilitates the creation of social impact.

 

#3 Training for NFP key competencies works.

New evidence presented in this report shows that a set of professional development activities addressing NFP governance, strategic leadership, and impact evaluation has systematic, positive effects on those trained. When compared to a control group, those receiving training in these fields gain greater role clarity, competence knowledge and self-confidence that facilitate better decisions and behaviours at work.

 

#4 Training NFP key competencies leads to multiple positive outcomes.

Powerful impact narratives support and illustrate the central ‘theory of change’ that lies behind the findings, namely, professional development experiences lead to new knowledge, skills and abilities. The rich data collected shows that training NFP workers facilitates better leadership, saves funds, leads to superior performance, and achieves greater well-being, which, in turn, enhances organisational viability and social change.

 

#5 Training can deliver positive economic returns.

Exemplary cost-benefit estimation for a NFP governance training scheme suggests an economic impact factor of +6. For each dollar spent on the capacity building, there appears to be an average positive return of about six dollars that can be attributed to the training undertaken and the resulting behaviours, decisions and flow on effects.

 

#6 The lack of money and time prevent needed professional development opportunities.

Insufficient financial and structural support prevent the Australian NFP sector and its people from engaging with more professional development. Smaller NFP organisations appear particularly prone to financial challenges, while larger NFPs are challenged by the time and support required to offer training. Thirty three per cent of NFP executives have no access to a designated training budget.

 

#7 The needs for developing NFP key competencies vary considerably.

There is a need for increased leadership development and strategic competence across the Australian NFP sector to ensure mission success. Certain sub-sectors and organisational features demand specific attention. A future national study must generate large and more granular data to inform policy makers, training providers, funders and other NFP stakeholders.

 

For more information contact:

Nicola Hannigan, Centre for Social Impact, n.hannigan@unsw.edu.au, 02 8936 0915 / 0407 075 307

Scott Gillespie, Origin Foundation, scott.gillespie@originfoundation.com.au,  02 9375 5884 / 0417 233 670

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