Capacity Building

What is capacity building?

“Capacity building is 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.” —The National Council of Nonprofits

Every organization – relatively new or well-established, with a small operating budget or millions of dollars in endowment funds – can improve the management of its operations and resources to become more impactful and sustainable.

Why is nonprofit capacity building important?

With the need for basic social services increasing exponentially and private and government funding resources reducing dramatically, nonprofits are being asked to do even more with even less. Additionally, expectations for financial transparency and accountability by the private donor and government sectors demand evidence of strong operational practices. Capacity building allows nonprofits to fulfill their missions and exceed their goals. It empowers nonprofits to manage their organizations with the highest ethics. And, it allows enables nonprofits to garner confidence and commitment among their donors. Ultimately, nonprofit capacity building benefits all of us who desire to live in healthy and compassionate communities.

How do I build capacity?

There is a broad spectrum of activities, strategies and opportunities to help build an organization’s capacity. A donor may grant funds to help an organization purchase new computer equipment so that it can share information more efficiently among employees and clients. An Executive Director may budget and send an employee to a class or workshop to develop the employee’s skills and prepare him/her for a new position or new responsibilities. A Board of Directors may commit to quantifiable programmatic goals and hire a consultant to help develop a three-year strategic plan to achieve those goals. Or, one nonprofit organization may partner or merge with another to help share overhead costs or to expand their shared geographic reach.

There is no one “right” way to build capacity. As a result, it’s important that an organization carefully evaluate its current operational strengths and weaknesses, prioritize its greatest capacity building needs and identify what resources it has to contribute towards its building efforts.

Steps involved in capacity building

• Assess your organization’s current performance in the following capacity areas:
• Organizational Management
• Systems and Infrastructure Management
• Human Resources Management
• Risk Management
• Brand Management
• Planning and Programming Management
• Make recommendations for improving your organization’s business practices; and,
• Identify your organization’s life cycle phase, the key challenges and opportunities of that phase
• Highlight key actions to take to move forward.

People who contribute to capacity building

• Executive Director or CEO
• Board Members with a good working knowledge of the organization’s policies and programs
• Other organizational representatives
• Senior administrative staff