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Jun 05, 2013

Human Capital Renewal in the Nonprofit Sector

June 5, 2013

Framing the Strategy

This report identifies and explores three key human capital priorities for the not-for-profit sector: closing the leadership gap, finding and keeping talent, and developing human capital.

The ability of the sector to attract and retain the right talent, develop effective leadership, provide relevant training and skills development, and offer competitive benefits and compensation will be critical in determining the future vibrancy and sustainability of the nonprofit sector in Ontario.

As Canada faces a slowdown in labour force growth, the nonprofit sector will need a deliberate human capital renewal strategy to strengthen its capacity to innovate and compete with the private and public sectors for skilled workers. A human capital renewal strategy will enable the sector to prepare for impending demographic change, technological advancements, and other emerging trends including increasingly networked behavior, rising interest in civic engagement and volunteerism, and the blurring of sector boundaries (Gowdy et al., 2009). A human capital strategy should address the particular needs of the sector and contribute to the resilience of communities across the province.


Defining “human capital strategy” is an important first step. For the purposes of this paper, human capital refers to the collection of skills, knowledge, competencies and personal attributes that create value in the workforce. A human capital strategy is understood as a forward looking approach to understanding the social and economic context in which the sector operates, the internal and external drivers that are shaping the sector, how these drivers impact human capital challenges, and the resulting opportunities and potential solutions.

Human capital planning is distinct from human resource planning, which is the process that links the human resource needs of an organization to its strategic plan to ensure that staffing is sufficient, qualified, and competent with the right skills to achieve the organization’s objectives.The key to a human capital strategy is that it is forward looking. Nonprofit leaders must think about the future of the sector in terms of whether it will grow or contract, how it will compete, and how prepared it is to navigate the changes that lie ahead.

The Ontario Nonprofit Network (ONN) has embarked on the development of a human capital renewal strategy for the nonprofit sector in Ontario. The purpose of the strategy is to develop a position of strength for the sector through effective human capital renewal. The Mowat research team was retained to work with the Partners’ Advisory Council (PAC) and the ONN to collect the necessary data that will inform the development of a human capital renewal strategy for the nonprofit sector in Ontario.

As the first step in the research process, the research team set out to identify potential research questions by reviewing relevant literature and conducting key informant interviews[ref]Interviews were held with 15 key informants that represented organizations from various sub-sectors and size, umbrella groups, and other subject matter experts. They were asked to comment on key trends shaping the sector, impact of these trends on human capital, and implications for the development of a human capital renewal strategy for the sector.[/ref]. This report provides a synthesis of the reviewed literature and an analysis of the interviews, formulates a framework for understanding human capital in the nonprofit sector, and identifies priorities for strategy development.

The report begins with an overview of the context in which this strategy is being developed, looking both at external and internal drivers acting on the sector, and how these drivers are shaping human capital concerns. From the interviews and the literature three key human capital priorities are identified and explored: closing the leadership gap, finding and keeping talent, and developing human capital.

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Elizabeth McIsaac
Stella Park
Lynne Toupin

Release Date

June 5, 2013



Mowat Publication

No. 65


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