Who Funds Capacity Building?

This section describes resources to help nonprofits identify sources of capacity building funding. We've also created a special section of resources just for funders. Visit the National Council’s policy pages for descriptions about the federal Nonprofit Capacity Building Program, which was included in the Serve America Act of 2009. 

What is the Funder’s Role in Capacity Building?

There is growing recognition among grantmakers that providing dedicated funding to help nonprofits build their capacity offers a positive return on the grantmaker’s investment in the nonprofit's mission. Capacity building paves the way to long-term sustainability. There is no question that it takes resources to build the capacity of a nonprofit. Resources can come in different forms, some of which may be financial, but not all. Consider these valuable non-financial capacity building efforts that funders can undertake to assist nonprofits:

• A local corporation that is holding a training session for its employees could reach out and include nonprofit staff in the training. This type of assistance would be an easy way for a corporate foundation to leverage its grants to a nonprofit with additional capacity building support;
• The loan of a skilled worker could help a nonprofit improve its technology systems;
• Pairing one grantee with a mentor, such as a more experienced grantee could offer a significant boost to a nonprofit that otherwise would not have access to leadership training opportunities;
• The opportunity to collaborate with a funder on a project could increase the nonprofit’s ability to leverage existing relationships into new sources of revenue.

Who Funds Capacity Building?

While the National Council itself does not fund capacity building, we can direct you to the following sources for assistance:  your State Association of nonprofits, regional association of grant makers, local community foundations and the United Way.  Additionally, the Foundation Center is a resource for researching foundations that fund capacity building.

Representative reports that describe the role of grantmakers in funding capacity building include:

• Read about the Goldmine study conducted by the David and Lucile Packard Foundation on a grants program to improve the organizational effectiveness ("OE") of 169 organizations. Grantees reported that grantees can clearly make the link between organizational capacity building and program service outputs or outcomes in a measurable way. Sixty‐six percent of grantees said the OE grant had “significant” or “transformational” and measurable impact on program services.
• Read about how foundations can support movement building in the report, Social Movements and Philanthropy, Masters and Osborn (2010).
• Read how grantmakers can advance good governance through capacity building assistance in the report, Advancing Good Governance, prepared by BoardSource and FSG Social Impact Advisors (2009).
• Read a report with case studies illustrating how grantmakers dedicated to making a long-term difference and enhancing impact through capacity building grants achieve their goals: Deeper Capacity Building for Greater Impact: Designing a Long-term Initiative to Strengthen a Set of Nonprofit Organizations by Paul Connolly, TCC Group (2002). 

Government as a Partner in Capacity Building

Governments are frequent partners with nonprofits for the delivery of essential services in our communities. Increasingly, governments are recognizing that helping to build the capacity of nonprofits is a critical step in the process of successful service delivery to local communities.

• Read a report about the 2008 Capacity Building Initiative of the Maryland Howard County Department of Citizen Services that was designed to (1) strengthen the system of service delivery within Howard County for low income and foreign-born individuals and families, and (2) provide capacity building to strengthen key nonprofit organizations serving low-income and foreign-born communities.

The Edward M. Kennedy Serve America Act of 2009

The Serve America Act created the Nonprofit Capacity Building Program. Learn more about the history of the Nonprofit Capacity Building Program and the National Council’s role.

The Corporation for National and Community Service, the designated agency that administers capacity building grants, issued grants to five nonprofit capacity building organizations in 2010, including the Alliance for Arizona Nonprofits and the Minnesota Council of Nonprofits. Information on this grant program is available from the website of the Corporation for National and Community Service.

Resources for Funders