“Capacity building” is a broad term which is in vogue among non-profit organizations. In a nutshell, capacity building refers to any effort to improve an organization by implementing internal strategies that will enhance the organization’s effectiveness and take it to the next level. These strategies encompass development of leadership/staff, strategic planning, financial management, technology, fundraising, outcomes and outputs.
Non-Profits / Grantees
Typically, a non-profit’s primary concern is to fulfill its stated mission by providing resources and funding to the programs it supports. What organizations often overlook is that in order to successfully fulfill a mission over time, an appropriate infrastructure must be developed and investments made in the organization’s long-term health.
When implementing capacity building, the Board and staff must be ready to make the initiative a priority. Free downloadable readiness checklists are available online from various consultants specializing in capacity building. Most important is that the Board and staff have the passion and time to dedicate to this strategy. If an organization does not have Board and staff commitment or there is high turnover of staff, the strategy may not be successful. Once an organization determines it is ready, it should consider looking into grants provided by Foundations. A search of available capacity building grants can be conducted through your local council of non-profits.
Foundations are increasingly realizing that in order for a grantee to be successful in the long-term, it must achieve organizational effectiveness, and that it is worthwhile to fund efforts to achieve this effectiveness. To an extent, organizations should operate on a for-profit model. Without the correct resources and infrastructure, funding of program initiatives may not be successful. With this realization, grantmakers are layering into the grants they offer an “unrestricted” portion of funds that the grantee can invest in specific capacity building strategies or devote to other means for developing the organization. Some Foundations implementing this grant strategy also require that grantees set achievable goals and include a mechanism to report back to the Foundation. When goals are set, the Foundation dedicates additional time and performs a more active role interacting with the grantee, which results in higher outcomes/ outputs.
Non-profits should ensure the grants they apply for are relevant to their capacity building strategy needs. Sometimes non-profits apply for grants that are devoted to forms of capacity building that are not applicable to their organizational needs. This results in inefficient allocation of staff time and resources. Also, with certain Foundations requiring additional oversight, an organization might not be able to fulfill the grantmaker’s requests, potentially affecting the capacity for future grants.
Besides funding from Foundations, there are other resources available to enhance capacity building, including consultants, publications and guides, volunteers and state associations for non-profits. Collaborating with other organizations and sharing resources is also an option. There is no single method for making capacity building work for your organization. Each implementation should be tailored based on specific needs and what the Board and staff identify as priorities. Remember, capacity building is an ongoing investment that will provide future results when implemented effectively.
For more information, please contact Sylvia Mazur at email@example.com or your Friedman LLP professional or engagement partner.