The Value of Capacity Building to Increase Nonprofits’ Impact
Capacity-building has long been a way for funders to supplement their traditional grants, boost nonprofit effectiveness, and ultimately help nonprofits be more sustainable. By investing in nonprofit leadership, technology, systems, and more, funders can equip their partners with tools and expertise to help them better meet their mission. As nonprofits face federal funding cuts and a shifting regulatory environment, many funders are turning to capacity building to provide additional support.
What is Capacity Building?
The Grunin Foundation defines the capacity building it does as “equipping nonprofit leaders with the tools, knowledge, and support to accelerate their impact.” Other funders define it more narrowly, focusing specifically on technological assistance, for example. Regardless of how your philanthropy defines the practice, capacity building should increase a nonprofit’s ability to meet its mission.
Supporting Skills-Building
Some capacity building teaches people new skills that they can apply to their nonprofit work. This might be in the form of leadership coaching or learning a new technology system. For example, the Grunin Foundation hosts trainings and workshops facilitated by experts in the topic at hand. Not only do these optional events help nonprofit leaders hone their skills, but they also advance Grunin’s mission by centering equity, diversity, inclusion, and belonging in the programs and providing ways for the nonprofit community to work in partnership.
Beyond group offerings, the Grunin Foundation provides more individualized support such as one-on-one executive coaching. Danielle Valle Gilchrist—who works at Catchafire, an organization that connects nonprofits with skilled volunteers and technical assistance—shares that one of its clients recently learned how to use an accounting software through a capacity-building grant from the Pincus Family Foundation. This relatively simple training teaches the nonprofit leader a new skill and helps the nonprofit operate more effectively.
The Gift of Time
Many nonprofits are chronically understaffed and have to focus the majority of their time on tasks that are both important and urgent. Supporting a task or project that is important but not as urgent can be a meaningful way to contribute to a nonprofit’s operation without diverting leaders’ attention from more timely issues. For example, a nonprofit CEO wished to create an employee handbook. It was a necessary and important task but not time sensitive and thus fell to the bottom of her do-to list for years. Through a capacity-building grant via Catchafire, a funder supported a skills-based volunteer to complete the handbook giving the nonprofit leader the space to focus on the organization’s mission.
Funders can also support nonprofits by giving of their own time. Grunin Foundation Director of Thriving Communities Vicki Fernandez frequently meets with nonprofits to help their leaders troubleshoot an issue or brainstorm a solution. She’s able to use her extensive background in nonprofit work to provide expertise to Grunin grantees. Grunin has also added Don Crocker to its team as an executive-in-residence. Crocker brings his experience as the former executive director for Support Center, a nonprofit capacity-building organization, to his work supporting Grunin grantees and others in Grunin’s funding region. Garry Long, a place-based philanthropy program director at the Zeist Foundation, also works part-time at the Grove Park Foundation—a community development organization, thanks to a loaned executive agreement, which is a unique way for funders to lend staff member expertise to nonprofit partners pro bono.
How to Do it Well
The Five Cs Framework
The Walton Family Foundation (WFF) has defined core components of effective capacity building. As a part of its strategic planning process, WFF engaged TCC Group to review its capacity-building practices and give recommendations for improving in the future. The resulting report showed that capacity building is more likely to be successful when it includes these five Cs:
- Contextual: Considers the position of each grantee partner within the ecosystem
- Current: Addresses a need that is immediate and relevant
- Continuous: An ongoing effort, rather than a one-time training or project
- Concrete: Results in a tangible deliverable that increases institutional knowledge
- Customized: Tailored to meet the grantee’s specific needs.
Keep these characteristics in mind as you determine—in concert with your partners—what supports you can provide.
Take the Lead from Your Partners
Remember that not all of your nonprofit partners will want capacity-building grants. Or they may need something different than what you typically offer. The Surdna Foundation echoed this learning its recent Impact Report saying, “Beyond-the-money support only works when it works for the grantee.” When a few grantees dropped out of trainings due to shifting priorities, Surdna learned that its suite of programs needed to be more flexible.
Ask your grantees what they need and listen to understand why. In a past blog post, Emerson Collective’s Anne Marie Burgoyne shared the collective’s capacity-building menu, which it supplements with personalized offerings based on the needs of an individual grantee to ensure that it is providing a wide range of services that account for individual grantee needs.
Capacity Building in Today’s Environment
Today, nonprofits are facing new and unexpected challenges. Nonprofits, as usual, are innovating, recognizing that they may need to diversify their funding streams and make some hard choices. But they often need additional human support to help them implement their solutions and address challenges that are particular to today’s civic landscape. The Jacob and Terese Hershey Foundation offered its grantees a variety of supportive measures including a review of their 990s by a CPA with extensive nonprofit experience to give their partners peace of mind that they are compliant with IRS regulations. The foundation also subsidized the first-time purchase of directors and officers insurance for its partners and offered cybersecurity audits.
Some funders are providing support by way of policy experts who can help nonprofits navigate a complex policy environment. For example, the University of Virginia’s Frank Batten School of Leadership and Public Policy has a funding opportunity to place its graduate students at nonprofits where the students can synthesize data and policy and help nonprofits understand the shifting regulatory environment. Students have focuses on topics such as climate and racial equity and can bring their policy know-how to nonprofits that align with their focus. By supporting in-house policy expertise, funders are giving nonprofit leaders more time to focus on their mission.
Gilchrist has noticed an increase in requests from Catchafire’s nonprofit partners for wellness resources to reduce burnout. The funders in its community are providing access to mindfulness coaches, productivity training, and facilitators with expertise in stress reduction and work prioritization. “Funders recognize that we need these folks to stay focused on the mission,” says Gilchrist. Self-care support helps ensure that talented leaders are more likely to remain in the sector, keeping their expertise and providing much-needed stability.
A Simple Place to Start
Ferandez highlights funders’ practices often take unnecessary time from nonprofit staff teams through onerous grant requirements. “It doesn’t cost you anything to take some grant writing off a nonprofit’s plate. It doesn’t cost you anything to take some reporting off their plate. But it does give them more time to do the work you’re funding them to do.”