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Philanthropy

The Key to Capacity Building Is Funding Long-Term Health Not Short-Term Workouts

Philanthropists: Rather than making periodic grants that focus on capacity building, embed capacity-building funding into each and every grant you make.

Last week, I heard representatives of a corporate foundation and two nonprofit organizations say that their attempts at capacity building had not yielded their intended results. (The National Council of Nonprofits defines capacity building perhaps best: “Whatever is needed to bring a nonprofit to the next level of operational, programmatic, financial, or organizational maturity, in order to more effectively and efficiently fulfill its mission.”)

One of the nonprofit leaders stated that a funder paid for a top-five consulting firm to come in—the consulting group spent six months building a strategic plan that “sat on the shelf” because the organization was unable to apply the strategy to their work day-to-day. The person went on to say that the final strategic planning document looked “really pretty” and that they sometimes attach it to the back of grant proposals—a sort of “window dressing.”

Meanwhile, the corporate foundation had increased their dedication to capacity building during the economic downturn. It had provided funding to grantees to hire either fundraising staff or a consultant to build the organization’s board, but the results were underwhelming. Ultimately, the funder was disappointed—boards had not instantly become the powerhouse collection of governance giants it envisioned, and modestly paid, just-out-of-college development associates didn’t manage to open the floodgates to funding. Nonprofit practitioners sometimes smirk at the unrealistic expectations attached to nominal capacity-building grants; foundations are dismayed when they don’t see results.

Unrealistic capacity-building strategies are often injected into organizations, and both funders and nonprofits are disappointed when a short-term capacity-building “work-out” does not produce long-term improvement. Adding a couple new board members or going through a strategic planning process might have some benefits—think new perspectives for board meetings or a written strategies that can help clarify next steps. But longstanding structures and process inefficiencies are just waiting to get in the way of progress and negate the short-term capacity-building gains.

What fitness experts will probably tell you is that the key to wellness is not periodic “Six-Minute Abs” workouts but regular visits to the gym. Capacity building should follow suit. Whether it is fundraising, board development, or strategic planning, they should be part of the daily routine, strengthened by all of many of the organization’s efforts and activities.

This long-term health model allows organizations to continually work on the challenges and issues that confront them. For those in the philanthropic world: Rather than making periodic grants that focus on capacity building, embed capacity-building funding into each and every grant you make. For example, if you provide money for program staff, top off that funding by ensuring that the staff is trained in program evaluation. Funders need to layer the funding of capacity building into their programmatic grants, and nonprofit organizations need to develop the acumen to manage and build capacity each and every day. 

Read more stories by John Brothers.

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COMMENTS

  • BY Jeff Jackson

    ON June 3, 2011 12:26 AM

    As part of a foundations team that supports capacity building projects, I couldn’t agree more - long-term capacity building is better than short-term.  We’re involved in a study right now of 1300 capacity building projects and I invite others to engage with the analysis at: http://packard-foundation-oe.wikispaces.com/OE+Post-Grant+Survey.

    From my limited 28 years of experience directing and managing a few non-profits (from $100K grassroots to $23M national networks), I’d add that funders are a small part of the capacity building equation.  Ouch!  Do foundations and those we fund (consultants and non-profits) want to hear this?  In my experience, most good capacity building work (long or short term) is absent of funder involvement or even awareness (mostly because most foundations do not have targeted support for capacity building).  Most capacity building happens as part of the operating budget of a non-profit (which, of course, has various types of donor support).  In fact, in 28 years, not once did I turn to a foundation for capacity-building support (only program support), and now I’m in the position to provide capacity building support to non-profits (it’s the center of my universe).  Therefore, I have to remind myself that the capacity building world does not revolve around us funders, and nor is it dependent on us funders. 

    I have to continually ask myself “what is “appropriate” capacity building support?” and “how do most non-profits get by and do great capacity building without targeted foundation grants?”  There’s no question that non-profits will take almost any support they can get, especially if it’s packaged nicely, is hassle-free and supports their mission.  There’s also no question that it would be great if all foundations provided targeted capacity building support.  That leaves me wondering with each capacity building grant - “have we really added to the organization’s capacity, or have we inadvertently made them a bit more dependent on outsiders to do what most non-profits do themselves?”.  “How can foundations be of support, keep grantees in the driver’s seat, and stay humble about the reality that non-profits are doing so much without us?”. 

    For me, your comments stimulated more questions than answers.  Thank you.

  • Alan Arthur's avatar

    BY Alan Arthur

    ON June 3, 2011 01:35 AM

    The article is accurate.  Another metaphor might be that you can pour a gallon of water into an 8 ounce cup, but unless the cup size is increased it still holds only 8 ounces of water.  Building capacity only requires two things: 1) consistent access to enough stable resources, and 2) leadership who want to do more and better.  If our mission is to fly planes between here and there, we need enough resources to buy a good plane and fuel, and to hire an experienced pilot and mechanics.

  • BY Tommy Darwin

    ON June 3, 2011 09:38 AM

    One key to capacity building (that protects against dependency) is helping folks in an organization discover the ideas and capabilities they already possess.  Having worked with students and clients in a number of situations, it is very clear that folks often have capacity they just don’t realize because 1) they do not get enough opportunity to use that capacity or 2) they have capacities in areas that could be adapted to new challenges if they were only shown how.  A key tool our design group uses right off the bat with any group is an inventory of existing capacities that can be adapted or brought to bear on a new challenge or opportunity.

  • I worked for a large retail corporation between 1970 and 1990. From our corporate office we had teams of people who planned where to put new stores, what they would look like, what types of staff were needed and what merchandise and services were needed. Other teams did in-store marketing, PR and advertising to draw customers to those stores. By doing this from a centralized location they lowered the costs for each store and improve the competitive position of each store. 

    To me, this is capacity building at its best.

    When I left my corporate job in 1990 I had led a volunteer-based tutor/mentor program since 1975. I had reached out to build a network of peers during this time and recognized that whenever “bad news” reached the level of front page stories and editorials, the media could only point to a few well known youth organizations because there was no master database showing all of the tutor/mentor programs in Chicago. In addition, the media only pointed to a few high profile neighborhoods, or the neighborhood where the “bad news” took place, so the media story did not draw volunteers and donors to all of the tutor/mentor programs in the city.

    With the help of a few volunteers we decided to try to fill that void and in 1993 we created the Tutor/Mentor Connection. We launched a survey process in Jan 1994 and located 120 organizations doing some form of volunteer-based tutoring/mentoring in non-school hours. We put this in a Directory and plotted this information on maps, and sent it to leaders of corporations, foundations and media with the hope that they would use this information to build proactive and on-going funding strategies.

    Over the years since then we’ve moved this to the internet and added graphics to illustrate that it takes 12 years for an inner city youth (or all others ) to go from first grade to 12th grade, and that’s how many years of funding and support an agency needs to be a consistent mentor/tutor in the life of that child.

    While we’ve shared this information in many ways we’ve never found philanthropic support to do this well, yet the information is on the internet at http://www.tutormentorprogramlocator.net and related sites and can be used to support the efforts of any who want to think of new ways to support non profits doing similar work needed in many locations in a geographic region.

    Our business leaders have recognized that it’s unreasonable to expect each local store to do everything it needs to be an effective business operation and that a central-office strategy can lower the costs of multiple locations.  I don’t envision one corporate office supporting all tutor/mentor programs in the country. Instead I would like to see our leaders talking about “birth to work” and helping create a “virtual corporate office” where many organizations are working to support the growth of high quality tutor/mentor programs in all of the neighborhoods where they do business.

    This was not possible prior to the Internet. It is possible now.

  • BY John Brothers

    ON June 5, 2011 09:25 AM

    Jeff, I love the Wiki site, having recently stumbled upon it as I was finishing my book on Capacity Building.  Such a great resource. 

    Alan, I am always amazed at the number of analogies that can be associated with capacity building.  As I work with a number of organizations in crisis, I am fond of the emergency medical analogies, but might steal yours, if ok.

    Tommy, capacity mapping is a good first step and better often then deficiency mapping, which only discusses what is wrong with the bus, not what is right about it.

    Dan, I remember meeting you a long time ago when I was with AP.  I always thought the work you were doing around mapping was innovative and now many are practicing your innovation.  Congrats on your important work.

  • Hi John,

    One of the other mapping tools I’ve been trying to harness is Social Network Analysis. If I were to be able to use this it would show how myself and six other volunteers created my organization in 1993. Then it would show the year to year growth in the number of people we’ve touched through our efforts. With special coding it would also show how many of those we’ve reached out to in the past are still connected to us today. 

    While I do see more uses of maps I still don’t see many using the maps as a tool to focus the efforts of volunteers and donors on places where kids are connecting with extra adults, learning and mentoring. While I focus this application on building a distribution of high quality mentoring programs, others could use maps the same way I do to support the growth of other needed services in all the places where they are needed.

    The only way we’ll ever have the power and resources to do this work is that our networks are growing and more people are helping us connect with others who might help us.

  • Neal Myrick's avatar

    BY Neal Myrick

    ON June 8, 2011 02:23 PM

    I have had the pleasure of experiencing capacity building from the foundation, nonprofit, and individual donor and volunteer perspectives.  This after 10 years working in operations for for-profit firms.  My perspective is that the capacity building ‘system’ is broken so it is not surprising that funders and nonprofits alike are frustrated.

    Capacity building in the nonprofit sector is done is silos and as “special efforts”.  For-profit organizations, on the other hand,  invest in operations and infrastructure as a matter of course.  When treated as “special efforts” they address symptoms but don’t address the systemic problems or opportunities that would drive real results. 

    For example, providing a grant to develop a board for an organization that has a faulty theory of change or poor programs doesn’t get results.  Awarding a technology grant to an inefficient organization doesn’t result in change because technology doesn’t fix process problems.  Providing a capacity building grant to improve tracking outcomes doesn’t help if the grant doesn’t also provide for technology, staff and other systems to collect, store, and manage data.  Providing enough money to buy two new computers doesn’t help if those computers will be connected to faulty IT infrastructure.  I could go on.

    Organizations are made up of systems and processes that are all connected.  Capacity building solutions, therefore, should consider the whole system, not just one part of it.  Unfortunately, approaching capacity building from a systems perspective is time consuming and expensive. The fact that it is usually not fun or sexy makes it difficult to invest in for both foundations and nonprofit staff who have to do the work when their passion is to serve the constituents and the mission.  But it is vital.

    Including capacity building funds in every grant could drive profound change in how nonprofits invest in their internal infrastructure and operations.  Finding trusted capacity building consulting services can be challenging.  The capacity building consulting “industry” reflects how capacity building funding has been awarded over the last several decades so it is fragmented.  It is challenging to find firms that think in terms of systems or who refuse to do work because they know it will be ineffective.  But that’s another article.

  • BY Nell Edgington

    ON June 8, 2011 02:37 PM

    While I agree that funders absolutely need to recognize the necessity of building nonprofit organizations (supporting capacity) instead of just “buying” services from those nonprofits, I’m not convinced that funders are the solution to the lack of capacity in the nonprofit sector. I work with nonprofit leaders every day to build the capacity of their organizations, and when we are really successful is when the leaders themselves are fundamentally committed to change, not just going through the motions because they received money for change. Real, significant, lasting change must come from the organization (its staff and board) not from an external funder. That said, that capacity building effort needs to be funded by someone. What I think really works is when a nonprofit recognizes the need for some sort of change, finds a consultant or expert to help make that change a reality, and then convinces a handful of funders to invest in “change capital” or “capacity capital” which will allow the organization to build the infrastructure, systems, staffing necessary to create a stronger organization.  You can see an example of this here: http://www.socialvelocity.net/2011/05/a-case-study-in-raising-money-to-grow-on/

  • Sam Shube's avatar

    BY Sam Shube

    ON June 12, 2011 01:42 PM

    In my experience a focus on “capacity building” sometimes hides more fundamental organizational dysfunction, such as an outmoded business model and/or a founding CEO that should have moved on years ago.  I have worked for 3 nonprofits that underwent strategic evaluations, organizational consulting and even staff reorganization, to no avail.  If an organization has a well defined value proposition, an up to date business model and executive leadership that’s open minded and ambitious, other things will fall into place and the “market efficiencies” of the non-profit sector will come into play, i.e., the organizations product/service will find its funders.

  • BY Nancy J. Fox

    ON June 12, 2011 11:26 PM

    In an article entitled, “Filling the Void in Los Angeles” (April 18, 2011), the Los Angeles Business Journal reported, “A recent study, commissioned by the Weingart Foundation found that our system for improving skills and leadership capacity in non-profits is haphazard, inadequate to the need, largely uncoordinated and fundamentally ineffective. This must be fixed.”  Yes, it’s time that foundations become concerned about what happens to their money after it is granted.  If an organization isn’t in a position to make good use of grant funds, the value of those funds gets discounted.  Given that non-profits are finding it more difficult than ever to meet budgets, it’s unlikely that they would voluntarily slice off a piece of a program grant pie for capacity building.

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