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Philanthropy Australia Conference Philanthropy Australia delegates consider how much investment is really being made in NFP leadership.

Why investing in your NFP workforce is critical to your culture

Knowing that an organisation needs a good culture to thrive is one thing, but how do you get there?

Building a good culture isn't something that happens by accident. It must be designed, developed, nurtured, and - if necessary - changed.

For many not-for-profits, part of the difficulty of working on culture is justifying the cost.

Not-for-profits are regularly criticised for spending money on "administration" and "overheads".

Let's bust that myth (again) right now. As we've said in Our Community Matters (February 2017), "Money going to 'chosen causes' and money going to 'red tape, expenses and staff salaries' are exactly the same thing".

The recent Philanthropy Australia Conference in Melbourne, which attracted more than 700 delegates from philanthropic, charity, social enterprises and impact investment groups, heard a panel discussion on this very issue.

In a session dubbed "If every cent in the dollar goes to the beneficiaries", panel MC Carmel Molloy of the Non-profit Alliance cited several sources showing the need to invest in training and development in the not-for-profit sector, describing the sector as "woefully underprepared for the challenges" in an era of unprecedented reform and change.

"We need to invest in people in order to have robust organisations to then empower our sector and have the social impact we're after."

She said it was shocking that studies had shown that a third of NFP leaders and executives have no access to a training and development budget, and less than a quarter (22%) have regular access to one.

Her own experience included hearing from the CEO of a $96 million organisation that his board had said, "We can't justify the expense," when he sought training with NPA's peer network.

"We're doing beneficiaries a disservice by not spending on this," Ms Molloy said.

The reports Ms Molloy referred to included The Foundations of a Well-Run Not-for-Profit by Good Foundations (2017), which drew on the views of 360 not-for-profit leaders.

That report found the top three issues for a well-run organisation were:

  • Having strong leadership, and the rising importance of board and governance
  • Being clear on the purpose, vision and direction of the organisation
  • Attracting and retaining quality people

And what was the most significant requirement for "strong leadership"? Commitment to a strong organisational culture.

As the report puts it: "Culture is a difficult aspect to measure, but clearly critical. The CEO is primarily responsible for setting the tone of the organisation. The CEO and the board needs to monitor the signals of a good culture, which at a basic level can include staff satisfaction and regretted staff turnover, but in reality, it is something relatively intangible so needs extensive personal interaction with staff to establish."

Ms Molloy also set the debate in the context of the landmark 2015 study Learning for Purpose: Researching the Social Return on Education and Training in the Australian Not-for-Profit Sector, by Dr Ramon Wenzel of the Centre for Social Impact at the University of Western Australia - who also happened to be in the room.

Dr Wenzel was able to detail some of the findings, including the finding that every dollar spent on NFP governance training creates an average six dollars of value, based on interviews with 300 directors.

The report also found that training had changed people's boardroom experience, improved their planning and resource development, changed their agendas, shortened their meetings, reduced costs, increased funding, and improved spending efficiency.

Dr Wenzel said not-for-profits' training needs were different from those of other sectors, yet there was still no undergraduate course in the field in Australia.

While there were "universal" skills that could be transferred from business and government to the not-for-profit arena, many skills were specific to NFPs, such as motivation, advocacy and fundraising, to name a few.

"You expect that pilots and doctors are going to be in a regulated profession, but we often put people into positions and ask them to 'wing it'. There's a lot of shoddy training experiences out there, but we want professionalism, and we need that to be ingrained in people," Dr Wenzel said.

He said the Learning for Purpose study would continue to extend its research into the state of work in the not-for-profit sector.



RESEARCH: Read the full Learning for Purpose report at learningforpurpose.org

The Foundations of a Well-Run Not-for-Profit (Good Foundations report, 2017, *.pdf)

SSIR: Nonprofit leadership special section

From our Organisational Culture special report

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