Part 3: Three Structural Shifts Reshaping the Not-for-Profit Sector in 2026

Intelligence. Investment. Integrity.

Three Structural Shifts Reshaping the Not-for-Profit Sector in 2026.

Sustained performance in the not-for-profit sector is contingent on how organisations respond to the structural shifts reshaping their operating environment. This three-part series on the “three I’s” shaping the sector examines the catalysts for change, emerging risks and opportunities, and the strategic responses organisations should consider. The final “I” is Integrity, exploring the tension between the larger NFP purpose and the people who carry it.

Integrity: People, Culture and Supporting the NFP Workforce

Australia’s charity and not-for-profit sector is an essential economic contributor employing over 11% of the national workforce. Over 1.6 million people are employed in this sector with a further 3.9 million volunteers (an average of 2.5 volunteers for every paid employee). The not-for-profit and charity sector generate over $239 billion in annual revenue while meeting the needs of our communities.

Yet for such a significant sector, the rates of burnout are critical. Recent statistics indicate that 29% of employees quit their not-for-profit roles due to burnout as the primary reason, while up to 62% of the sector workers feel burned out on a weekly basis. Additionally, two-thirds of not-for-profit board members are considering resignation due to this strain.

For a sector with an overwhelmingly positive impact, these statistics are staggering. This leads us to consider what is causing its workforce to burn out, and how can we solve this issue?

The Risk of the Larger Goal

The Australian not-for-profit sector relies on purpose-driven people who care deeply about the work they do and communities they serve. However, donor expectations, resource constraints, and the emotional toll of purpose-driven work can expose not-for-profit workers to unhealthy stressors. The larger goal is often prioritised over employee wellbeing due to the lack of competency and resources to handle complex internal issues.

According to the Center for Effective Philanthropy, burnout remains a top concern for 95 percent of nonprofit leaders, and 76% believe burnout actively hampers purpose delivery. The purpose often takes precedence over employees. Passionate workers commonly overextend themselves to meet goals and feel profound guilt when setting boundaries. This can be attributed to deep altruism and a genuine will for change, often exploited due to cycles of overwork, and severe underfunding.

This leads to ‘compassion fatigue,’ a term depicting the physical, emotional, and psychological exhaustion from caring for others. Many not-for-profit workers are highly susceptible to this form of fatigue due to the high levels of empathy and care required to drive their work. Most often, psychological injuries cost more than physical ones according to Safe Work Australia leading to the observed high levels of burnout.

Integrity in the NFP Workforce

Replacing an experienced team member costs organisations up to 200 per cent of that person’s annual salary, accounting for the loss of specialized knowledge, relationships, and other expertise. In the not-for-profit sector, employees are not interchangeable, and unfortunately their solutions aren’t either.

So, is there a way to sustain a stable not-for-profit workforce amidst persistent burnout?

Acknowledging the Issue

Due to the high demand nature of not-for-profit work, burnout often remains unacknowledged. Preventing burnout begins with identifying its presence within the workforce. One practical resource to implement within the workplace is a psychosocial survey to actively identify potential signs and risks of burnout amongst employees. This structured process aims to identify and control psychosocial hazards such as job stress, fatigue, low support, and unfair treatment, all of which are primary causes of burnout. Early identification can prevent detrimental future consequences.

Leveraging Recent Reforms  

Mitigating burnout requires the leveraging of recent reforms. One major reform is the Safe Work Australia’s Model Code of Practice: Managing Psychosocial Hazards at Work (2022) which enforces the proactive identification and management of psychosocial hazards. For not-for-profit employees, this means risk assessments, control measures, and review processes are actively implemented to prevent burnout.

The Fair Work Legislation Amendment Act 2024 introduced the right to disconnect for employees from August 2024. This enables workers to reasonably refuse contact outside of working hours. Over 68% of workers feel their organisation heavily relies on them completing unpaid overtime to maintain services and more than a third of Australian report being contacted by employers or clients after scheduled work hours, therefore this change has been pivotal.

The Social, Community, Home Care and Disability Services (SCHADS) Award wage increases represent a substantial pay equity correction to recognise the chronic undervaluing of workers in social and community services. The increase of approximately 15% to 25% above base (depending on classification level) is necessary to recognise and reward employees in the sector.

Reframing the Purpose

The wider not-for-profit purpose should never take precedence over its workforce. The urgency of community need, funding pressures, and culture of care at the expense of wellbeing has long been reinforced meaning employees have been neglected.

Reframing the purpose means recognising that an exhausted, undervalued, and resigning workforce cannot meaningfully deliver the purpose. Workforce wellbeing and community impact are not competing priories but inextricably linked. Organisations must build a culture of genuine care and appreciation for their workforce to deliver better outcomes for the communities they serve.

How We Can Assist

At The Breakthrough Office, we help not-for-profit organisations strengthen governance, manage risk, and improve operational controls. If your organisation needs support in terms of the burnout and its impact, we can assist. Whether it’s by implementing SCHADS Award wage increases, developing an effective psychosocial hazards survey, or providing practical guidance on workforce wellbeing, we would love to partner with you.