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This exploratory study aims to examine the effects of leadership on organizational climate, employee psychological capital, commitment, and wellbeing in a religious/church‐based non‐profit organization.

Leadership effects are investigated using established scales including the transformational leadership scale, (TLS), organizational climate questionnaire (OCQ), positive and negative affect scale (PANAS), psychological capital (PsyCap), and organizational commitment. It is a context‐based study that considers a unique organizational culture that comprises social, political, economic, technological, personnel, and personal facets. The survey was administered across a large religious/church‐based non‐profit organization.

The findings show strong positive relationships between employee ratings of their immediate supervisor's transformational leadership and employee ratings of organizational climate, wellbeing, employee commitment and psychological capital. Additional analyses which explored the impact of demographic variables revealed older employees recorded significantly higher scores on psychological capital than younger employees. These findings inform organizational sustainability where the principles of socially responsible management practices form the heart of responsible stewardship.

Risks of method variance or response biases are likely as all data are drawn from employee surveys, and some selection bias as respondents could not be directly compared with non‐respondents.

This study makes a significant contribution to the non‐profit literature by providing further evidence of the impact of leadership on organizational climate, with the added dimensions of psychological capital, employee wellbeing, and commitment adding to the knowledge of these relationships.

The purpose of this exploratory study is to examine the impact of leadership on workgroup climate and performance in a religious/church‐based non‐profit organization.

The impact of leadership is investigated using a questionnaire comprised of established scales such as the transformational leadership scales (TLS), team climate inventory questionnaire (TCI), team effectiveness, workgroup cohesion, and interdependence scales. This is a context based study that considers the unique culture comprised of social, political, economic, technologic, personnel, and personal concerns. Descriptive, correlation, hierarchical regression, and SPSS macro developed by Preacher and Hayes were used as statistical techniques to assess the indirect effects (Sobel Tests) of variables.

Transformational leadership was identified as a key variable for the functioning of workgroup performance whilst transactional leadership was identified as a key influencing factor of workgroup climate. In addition, the study found a significant and positive large effect of workgroup climate on workgroup performance whilst both transformational and transactional leadership did not influence workgroup performance through workgroup climate. This finding provides areas in need of further research.

There is likely to be posing risks of method variance or response biases as all data were drawn from employee surveys. There is also likely to be selection bias as the authors could not directly compare respondents with non‐respondents. The fact that there may be operational differences in other as well as smaller organizations, based on the limited size and the ability to allocate job functions, could limit the generalization of this result to other organizations.

This study makes a significant contribution to both scholarly theory and workplace practice in the non‐profit sector as the findings indicated that the influence of workgroup climate on workgroup performance provided an enabling context for the delivery of leadership in a religious/church‐based non‐profit organization.