Capacity Building Resources for Funders

From community foundations to private family foundations, funders are taking a renewed look at capacity building grants. Building capacity is needed now more than ever to counter-balance the impact of severe budget cut-backs, both in state/federal grants, and the reduction of other sources of revenue, such as gifts by private individuals and other philanthropic sources. Consequently, there is a growing recognition that investments are needed to ensure a strong foundation for future sustainability. (Examples: helping boards and staff understand their own financial model, and board training so that board members understand how to read financial statements and participate in resource development).

Read about sustainable and sound management practices.

We offer the resources below as a starting point for funders seeking to understand the important role their work can play in capacity building for the sector.

• Research by GEO concluded that the three top funding practices that allow nonprofits to achieve better results are support for capacity building, multi-year grants, and general operating support: Is Grantmaking Getting Smarter -  A National Field Study of Grantmaker Practices (Source: GEO, 2011.)

What are the trends that will impact the sustainability of a nonprofit? Convergence – How Five Trends Will Reshape the Social Sector will convince you that all nonprofit leaders (and funders) need to keep their eyes on future trends. (Source: LaPiana Consulting, 2009).

• Read case studies from a report prepared for the Lumpkin Family Foundation, Nonprofit Capacity and Community Building in Central Illinois (2006), that describe the experience of one private foundation’s capacity building programs.
• Why is building communications capacity so critical for nonprofits? (Source: Spitfire Strategies).
• Strengthening Nonprofit Performance: A Funder’s Guide to Capacity Building, Paul Connolly and Carol Lukas (2002), is a comprehensive guide for funders describing the growing interest in capacity building, reasons to invest in capacity building, means of providing assistance and specific examples of capacity building projects, and how to evaluate the results.
• How do capacity building efforts leverage other types of organizational change? Read An Analysis of the Pittsburgh Region’s Capacity-Building Industry: Who is Doing What for Whom and to What End, a report of the Forbes Funds (2004) that identifies barriers to effective capacity building as well as factors leading to leveraging capacity building into organizational change.
• Built to Last- A Grantmaker’s Guide to Strengthening Nonprofit Organizations, by Paul Connolly, TCC Group (2001), offers specific suggestions on how grantmakers can leverage their support into stronger organizations through capacity buiding support.
• The Foundation Center offers a bibliography of research, reports, case studies and articles on capacity building.
• Read about writing proposals for capacity building in a white paper from the Grantsmanship Center.
• Summaries and reports by funders for funders: Members of Grantmakers for Effective Organizations may engage in listserv conversations about funding capacity building projects.

What is Capacity Building?
Examples of Effective Capacity Building
Evaluating Capacity Building Efforts
Who Funds Capacity Building?