Beyond a Cost: Why Training is THE Strategic Lever in Your Nonprofit
Nonprofits often view training as a cost. I've heard it, and I'm sure you've heard it as well. However, it's actually an investment in the very thing that moves your mission forward: your people.
That's why, in this episode, I'm sitting down with Nancy Bacon to debunk the idea that training is a cost and highlight all the value it brings when done right. She is a teacher, instructional designer, and learning strategist who has worked in the nonprofit sector for over 25 years.
This episode is a game-changer for nonprofit leaders who are struggling with the decision to invest in training, and for nonprofit L&D pros who are struggling to frame up the value of what they do to secure the partners and funding they need.
▶️ Key Points:
00:00 How Nancy became a nonprofit learning strategist
06:05 Cost vs. investment: the ROI of training
11:02 Hidden costs of not investing in L&D
16:48 Effectively communicate the real value of training
21:31 The need to shift our mindset from scarcity to abundance
Is Learning & Development a Cost Center?
Nonprofit organizations are relentlessly mission-driven, constantly balancing ambitious goals with finite resources. In this environment, every expenditure is scrutinized. A recurring challenge that confronts mission-driven leaders, especially those tasked with developing staff, is the perception of training. Is professional development simply a necessary cost—a line item to be minimized in the budget—or is it a critical investment that actively fuels mission impact and financial sustainability? That’s what we explore on episode 161 of Learning for Good.
The common framing often places L&D teams as a cost center that consumes resources. While training certainly involves an outlay of money, it also delivers real value, including financial savings, by making teams more efficient, productive, and aligned.
To debunk this pervasive misconception, we must shift the conversation. Drawing on the insights from my conversation with Nancy Bacon, CEO of Nancy Bacon Consulting—a nonprofit education production company—this post explores why training is, in fact, the single most important strategic lever available to nonprofit leaders, offering a profound return on investment (ROI) that extends far beyond skills acquisition.
Shifting the Narrative: From Training as Cost to Training as Investment
When leaders describe training strictly as a cost, they are missing the inherent opportunity for investment. In essence, every cost has the potential to be an investment.
We understand this concept clearly in our personal lives:
A vacation is a cost, but it is an investment in our well-being and long-term ability to care for ourselves.
Buying an appliance, such as a new oven, is a cost, but it is an investment in our ability to cook and gather.
Paying for college, despite the initial expense, anchors future careers.
Nonprofit finance teaches us that an organization’s expenses show its values; there is a story and a purpose behind the numbers listed on a profit and loss statement (P&L). It would be profoundly powerful for the sector if professional development were consistently viewed not as a cost, but as an investment in our people and ourselves.
Ultimately, the ROI of this investment should be improved organizational results—a better ability to achieve the mission, engage the community, and ensure the sustainability of the nonprofit.
What is the Value of Training?
While improved organizational results are the destination, the immediate return on investment is found in the people who execute the mission. Nancy shares a few areas training can help:
Improved Competence: Do people know how to do their job? Do they have the necessary skills? Training can build these skills so staff are well-prepared to deliver on the mission.
Increased Confidence: Do people feel capable and good about performing their duties? Staff can act with confidence when they have the skills and support they need to do their work.
More Joy: Staff who possess competence and confidence often feel joy in their work. This joy is the element that brings people back to their mission every day and drives them to share the organization's story across their communities.
When training focuses on behavior change, L&D teams help people perform their duties better and more confidently.
The Financial Case Against Cutting Training
When organizations view training purely as a cost, it often falls lower on the list of priorities when budgets are tight. Leaders lament they don't have the time, money, or resources for it. However, this decision to cut training is, in fact, a path toward losing money and organizational viability.
Training investments actively mitigate three major categories of loss and risk:
The Cost of Mediocrity and Turnover
In board governance, Nancy Bacon referenced the quote, "Mediocrity is survivable." While an organization might survive with a mediocre board, it will never thrive. Mediocrity takes a serious hit on several fronts, including staff turnover, the organization’s ability to advocate for its mission, and its capacity to raise money and build community.
A small investment in board training—even just providing basic tools and tips—can help board members transition from the awkward stage of not knowing their exact role to a place where they can fully support the organization. A lack of understanding of roles and expectations (governance versus operations, for example) is a huge factor in performance, meaning even basic training can make a huge difference.
The same is true for staff.
The Cost of Risk and Compliance Failures
Training is a powerful tool for lowering organizational risk, which translates directly into cost savings.
Safety and Health: Organizations experiencing frequent accidents will see their workers' compensation payments increase. A little bit of training on safety and health can dramatically lower workers' comp costs.
De-escalation and Claims: Risk management extends to internal and external interactions. For example, a low-income housing nonprofit facing high claims might become uninsurable. Training supervisors and managers on critical skills like de-escalation and conversation engagement is an investment that lowers liability.
The Ultimate Cost: Organizational Failure
Nancy Bacon highlighted work with a network of nonprofits that was experiencing a high level of organizational failure—underperforming or even going out of business. This represents a monumental loss of mission impact and investment. Training is an incremental yet vital investment that can go far in preventing underperformance or organizational closure, ensuring the nonprofit is sustainable and can thrive.
The Strategic Imperative of Training for Nonprofits
To explain the strategic value of training to a Chief Financial Officer (CFO) or other executive, we must move past viewing it as a strategic lever and recognize it as THE strategic lever for impact.
In the nonprofit world, the only real engine of change is people. Unlike corporate entities that might rely on factories, product lines, or robotics, nonprofits rely entirely on human beings to turn the mission into motion every single day.
Every plan, every dollar, and every partnership in a nonprofit runs through human hands. When something goes wrong, the easy temptation is to seek external solutions—a new consultant, a different technology, or a new program. However, the truth is that the quality of results always traces back to the people making thousands of small micro-decisions every single day.
Consider the daily decisions related to compliance and safety. Training does one essential thing: it sharpens those decisions. It increases staff awareness of the choices they are making and empowers them to make those choices with competence and confidence.
Therefore, training is not merely a cost, but a core expenditure necessary for the effective execution of the mission.
L&D as a Strategic Partner
This strategic recognition has massive implications for nonprofit L&D and HR professionals. We must frame up the value of our work so that the internal partnership strengthens and our ability to help the organization meet its strategic goals improves.
L&D teams are not “some add-on department in the back end of the building.” L&D professionals are experts in how people think, learn, and change their behavior. This knowledge makes the L&D function fundamental to organizational strategy.
It is common for leaders to overlook the behavioral component of their strategic goals. Nancy Bacon shared that upon reviewing one client’s strategic plan, she found that three-quarters of the plan had to do with excellence in learning and changing people’s behavior—the very expertise of the L&D team.
L&D must be at the table when organizational strategy is being discussed. For L&D professionals struggling to gain that access, having the language to articulate this value is crucial.
If you are in a nonprofit L&D role and you want to operate more strategically, join the Nonprofit L&D Collective and get access to a supportive network and opportunities for professional learning and growth.
Nonprofit Executives: Does Your Nonprofit’s Financial Statement Represent Your Values?
The struggle over whether training is a cost or an investment is symptomatic of a larger, systemic issue within the nonprofit sector: the scarcity mindset.
The conversation about training expenses is part of a larger, necessary reckoning concerning core expenses. We must move from a place of scarcity to one of abundance. The nonprofit sector often operates within a starvation cycle. This is evidenced by organizations proudly boasting that “all funds go to programs,” implying that spending any money on infrastructure, salaries, or professional development is somehow “morally wrong.” This problem is not isolated to training; it plagues salaries and a host of other core functions.
It is high time for nonprofit leaders to confront and challenge this starvation cycle, which is actively harming the sector.
Leaders must realize that their financial statements represent their values. Since nonprofits are fundamentally in the people business, they must invest in their people to ensure staff stay, make good decisions, and serve their communities with joy and confidence.
When financial times are difficult, the temptation is to isolate, work harder, pull back, and stop spending money on “extras.” However, pulling back is often the exact opposite of what is needed. While we should not spend extravagantly, we must be strategic in the investments that enable the organization to navigate the present and succeed in the future. Developing people is mission essential.
By shifting the mindset from scarcity to abundance and recognizing the undeniable ROI in competence, confidence, and joy, nonprofit leaders can reposition training as the powerful strategic lever it is—the engine driving capacity and fueling mission impact.
If you are ready to take this step and invest in your people, we’d love to work with you; complete our form and we’ll be in touch with next steps.
To learn more about presenting L&D as an investment rather than a cost, tune into episode 161 of the Learning for Good podcast.
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