Not for profit Sector in Australia

Grevillia Flower

The Not for Profit Sector in Australia (Source: Productivity Commission Report  The full report and key findings can be downloaded at

There are approximately 600 000 not-for-profit organisations (NFPs) in Australia.  Most of these are small, non-employing organisations that rely on the voluntary contributions of members and external volunteers.

The sector makes a significant contribution to the Australian economy. In 2006-07, it accounted for 4.1 per cent of GDP (which does not include the contribution of volunteers), employed close to 890 000 people and utilised the services of some 4.6 million volunteers. Three-quarters of volunteers across all NFPs contribute to culture and recreation activities or to social services

Around a quarter of NFP employees were employed by the community services sector in 2006-07.

The number of NFP employees in community services grew strongly from 156 000 in 1999-00 to 221 500 in 2006-07 during a period of strong economic growth.

The community services workforce is often characterised as being female, part-time and middle-aged.

The data confirm these propositions. Women represent 87 per cent of employees, working an average of 31 hours per week, with an average age of 41 years — the average age of employees outside the health and community services workforce is 39 years (AIHW 2009).

Difficulties attracting and retaining staff — a workforce crisis?

In 2008, 64 per cent of community service organisations reported difficulty in attracting appropriately qualified staff (ACOSS 2009). The Department of Education, Employment and Workplace Relations (DEEWR) confirmed these findings, reporting skills shortages in all states and territories for social workers in 2008 and skills shortages for welfare workers in New South Wales and Queensland and recruitment difficulties in other states (DEEWR 2009c). Skill shortages are concentrated within the NFP sector, particularly in rural, regional and remote areas. This is partly due to lower wages NFPs are able to offer, fewer training opportunities and career paths and, in smaller organisations, a lack of human resources knowledge to effectively market the benefits of working in the sector

Around half of the sector’s income is self-generated (including fees for goods and services). A third is received from government (including contracted government services) and around 10 per cent from philanthropic sources.


In 2006-07, the sector generated $41 billion gross value added (GVA) — equivalent to 4.3 per cent of total GVA. This with the national income of the wholesale trade sector ($48 billion), transport and storage ($48 billion) and government administration and defence ($40 billion).3 It is larger than the gross value added of the communications sector ($25 billion), but smaller than that of finance and insurance ($77 billion) (ABS 2009b).  In other words, it is a very significant sector and growing.

NFPs report rising costs of recruiting, managing and training volunteers. Minimum qualifications, occupational health and safety, food safety, security checks, and public liability insurance add to these costs.

While this analysis concentrates on community services, many of these issues are relevant to other parts of the NFP sector, including sports, arts and culture.

The research report was submitted to the Australian Government at the end of January 2010. The full report and key findings can be downloaded at