I recently met with a local foundation currently redesigning their community programs to include capacity building grants (also known as organizational effectiveness grants) to enhance the overall effectiveness of area nonprofits. The funder’s goal is to invest in the mission of local nonprofits to help ensure successful delivery of services to local communities and long-term sustainability of organizations. Through capacity building grants, the foundation is leveraging the impact of their philanthropic resources.
It is important to keep in mind that some funders provide capacity building grants to those organizations with which they already have a relationship, while others offer grants through a formal application process open to organizations whose mission aligns with funder focus areas. As I research grant resources for clients, I always determine if capacity building grants are offered and what specific services the grants support. Many times, obtaining a capacity building grant sets the stage for securing additional funding from the grant maker for program and services.
Capacity Building Defined
Capacity building is defined as the implementation of specific strategies to strengthen a nonprofit’s infrastructure. There are seven standard focus areas associated with capacity building:
- Mission, Vision, and Strategy
- Governance and Leadership
- Resource Development and Financial Management
- Strategic Relationships and Marketing/Branding
- Internal Relationships and Management
- Program Delivery, Impact, and Evaluation
- Organizing Restructuring/Mergers
In preparation for the capacity building processes, I recommend that nonprofits conduct an organizational assessment that allows organizations to undergo an assessment of current capacities and for board and staff to reach a shared understanding of their strengths and challenges. Funders often provide funding for organizational assessments; the assessment process can be the first phase of their capacity building grant process. Capacity building grants provide funding for organizations to plan for or implement strategies, identified through a completed organizational assessment process. If organizational assessments are not funded by the grant maker, I encourage organizations to invest in a preliminary organization assessment to help provide clarity regarding the capacity building activities that are most needed. This will help build a case for support when applying for funding.
Prioritizing capacity building activities is critical because there is such a broad range of potential activities that can aid a nonprofit’s effectiveness. Examples of such strategies for which you can seek funding include: developing a marketing and branding strategy, establishing a succession plan for the executive director, strategic fund development and strategic planning, building unique partnerships with community agencies to help leverage resources, executive coaching, and the development of volunteer recruitment and management processes. Activities related to the board of directors include the provision of board training on fundraising, roles and responsibilities, and fiscal management, as well as the development of effective board recruitment and orientation processes. In some cases, funders will provide financial support to hire a grant writer. As a result of such capacity building strategies, organizations become more innovative, board members govern more effectively, fundraising effectiveness increases, and the delivery programs and services is enhanced.
Often, management staff and the board of directors will take the lead in facilitating capacity building processes, but keep in mind that there are several outside resources that can assist with such activities. Such resources include: state associations of nonprofits (National Council of Nonprofits), consultants specializing in organizational development, local universities, and colleges and retired executives (Executive Service Corps).
The Packard Foundation launched the Organizational Effectiveness (OE) Goldmine Research Project to collect, organize, and analyze data from its program in 2010. As you prepare for the submission of grants for capacity building grants, I recommend reviewing the Foundation’s final report that summarizes the responses to the following questions: In what ways do OE grants build one-time transactional capacity vs. ongoing transformational capacity? What contributed to the consultant relationship working or not working? What are the factors that contribute to a successful OE project? When and under what circumstances do OE projects succeed or fail?
It is exciting to know that funders are increasingly making it a priority to invest in organizational capacity building activities. To prepare for such opportunities, be sure to conduct an organizational assessment, prioritize your capacity building needs, and determine the most effective strategies to build your infrastructure. Your organization will then be ready to make a case for support for a capacity building grant.
About the Author
Ruth Peebles, President of The INS Group, offers 25 years of experience in the nonprofit management. The INS Group is a national consulting firm that provides organizational development and capacity building services to nonprofits, government agencies, and faith-based institutions. Services include grant writing, grant research, strategic planning, strategic fund development planning, succession planning, executive coaching, and board training and board development. Ms. Peebles can be reached at firstname.lastname@example.org.
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