HR in the Not-for-Profit Sector: The Case for a Discipline of Its Own
It’s time we said it plainly: Human Resources in the Not-for-Profit (NFP) sector is no longer just a variation of standard HR, it’s becoming a discipline in its own right.
While traditional HR literature and practice offer a solid foundation at the transactional and operational levels, payroll, industrial relations, employment contracts, and workplace safety, they begin to fall short the moment we step into the strategic arena. In areas like organisational culture, leadership development, psychological safety, diversity and inclusion, workforce planning, and executive influence, the NFP context reshapes how we think, act, and lead.
Put simply, the people challenges in NFPs aren’t just “harder”, they’re layered with multiple variables of cascading difference. The constellation of purpose-driven values, complex funding environments, and layered stakeholder demands creates a distinct ecosystem. Add to that the complexity brought by individual subsectors, and the divergence from homogenised HR practice becomes even more pronounced. The standard corporate playbook, peak body leadership, and HR discipline-centric models simply no longer cut it.
This chasm has grown so wide that we believe it’s time to ask a bigger question: Does the NFP sector now warrant its own academic and professional HR specialisation? Because if we’re honest, much of the nuance, tacit knowledge, and lived experience that defines strategic HR in this space isn’t covered in traditional frameworks.
The Crux of the Matter: Four Interconnected Spheres
The case for recognising NFP HR as a distinct field isn't built on one argument, it’s a convergence. Four interconnected spheres consistently shape the lived reality of HR practitioners in the sector: Strategic HR, Governance, Purpose, and Stakeholders.
1. Strategic HR — Same Name, Different Game
On the surface, HR in the NFP sector may share terminology with its corporate cousin — workforce planning, HR strategy, diversity and inclusion. But underneath, the work is fundamentally different. The absence of commercial imperatives shifts the lens through which decisions are made. Influence often relies less on formal authority and more on trust, values alignment, and cultural fluency.
Navigating people strategy in resource-constrained, purpose-driven environments demands a different kind of leadership — intuitive, adaptive, and contextually aware. This is strategic HR, but it speaks a different dialect.
2. Governance — The Blurred Lines of Leadership
Many NFPs are governed by volunteer boards (committee) members who often have deep emotional investment in the mission, sometimes as founders or long-time supporters. This closeness can blur the boundaries between governance and management, especially in HR-related matters. It’s not uncommon for board members to be directly involved in staffing, performance, or culture, often from a place of goodwill, but not always with appropriate understanding.
HR in this space becomes more than a function, it’s a constant negotiation of roles, power, and education. To the uninitiated, it can seem chaotic. And yes, you do have to be a little bit nuts to love it, because it can spiral out of control.
3. Purpose — The Moral Imperative That Changes Everything
In the NFP world, purpose isn’t a marketing line, it’s the operating system. Many HR practices born in profit-driven environments don’t survive the transplant. Performance management, for example, is often viewed with deep suspicion. KPIs and ratings feel misaligned in places where intrinsic motivation is high and financial incentives are limited or non-existent.
In practice, only around half of traditional HR methodologies translate meaningfully into purpose-first contexts. The rest must be radically adapted or abandoned in favour of emotionally intelligent, community-conscious approaches.
4. Stakeholders — Beyond the Employee Contract
NFP HR doesn’t just serve staff, it manages ecosystems. Volunteers, donors, government funders, accreditation bodies, media, and community members all play a role in shaping expectations. And they’re often pulling in different directions.
In some organisations, volunteers vastly outnumber paid staff, shaping the culture more than any policy ever could. Funders may impose rigid constraints on how staff are engaged. Accreditation systems can reduce flexibility and creative workforce solutions. And media scrutiny is intense, precisely because NFPs are held to a higher moral standard.
The weight of these influences is often the undoing of corporate HR professionals who enter the sector expecting the same rules to apply.
At the Nexus
It’s at the intersection of strategic HR, governance, purpose, and stakeholders that the true complexity — and uniqueness — of NFP HR is revealed. Here, decisions aren’t just operational; they are balanced. Influence isn’t just positional; it’s relational. Metrics don’t always measure what matters. And success can’t be captured in a spreadsheet.
This convergence doesn’t just stretch the HR toolkit, it demands a new one. But the academic and professional recognition of this divergence is still a long way off. Real change takes collective will, investment, and time.
So, while the theory catches up, what can we do now?
For CEOs
If you’re a CEO in the NFP space, you’ve likely felt the pain of hiring consultants or professionals with strong resumes who simply don’t “get” the sector. That’s rarely a matter of skill — it’s usually a matter of context mismatch.
To bridge that gap, hire for more than capability.
Look for:
+Skin in the game, people with a strong history in the sector.
+Comfort with ambiguity and complex stakeholder environments.
+Real alignment with purpose, not just corporate speak.
+Adaptability over rigid expertise.
When you find these people, invest in them. Yes, the sector may not always compete on salary, but it can and should compete on meaning, flexibility, and long-term value. The future depends on HR professionals who are not just functional — but transformational.
For HR Professionals
If you're looking to enter or deepen your role in the NFP world, forget the classroom. The real training ground is the sector itself.
Try this:
+Join a board - ideally at a smaller NFP, where you’ll see governance and strategy up close.
+Volunteer - not just for altruism, but for insight.
+Start small - entry-level or mid-tier roles often provide the richest exposure.
+Get comfortable with lower pay - at least at first. The non-financial ROI meaning, growth, and purpose is substantial.
Above all, stay open. The rules are different here. That’s the whole point.
