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This paper aims to examine the use of benchmarking as a management technique in the Australian non‐profit sector. Benchmarking has great potential benefit for the non‐profit sector, particularly given the reliance of non‐profit enterprises on effectively utilizing human capital; thus it might be expected that they would be enthusiastic about techniques such as benchmarking that can assist them in improving their performance. The non‐profit sector is a large and important part of the economy in the developed world.

To determine the use of benchmarking in the Australian non‐profit sector, the following methods were used: a review of published industry surveys and case studies; interviews with 15 non‐profit sector experts; and a review of more than 50 works on non‐profit management.

Research showed that benchmarking has been little used by non‐profit organizations in Australia to date. This seems to mirror the experience of non‐profits in other countries.

The paper argues that the limited use of benchmarking in the non‐profit sector can be explained by: non‐profit management culture; lack of industry and funder pressure; and a lack of targeted information on benchmarking for the non‐profit sector. Any efforts to increase the use of benchmarking in the sector would need to ensure that these issues are overcome.

A plan of action is suggested for promoting benchmarking to non‐profit organizations.

The paper assesses the use of a standard management technique in the emerging area of non‐profit management. It should be of interest to those researching or managing in the Australian non‐profit sector. The paper may also be of interest to the non‐profit sector or human capital sector in other countries.