Nonprofit Capacity Building

Through the tax code, direct grants and contracts, the federal government relies on nonprofit organizations to provide critical services to citizens and communities across the country. Congress should appropriate adequate resources to help its nonprofit partners strengthen their ability to be efficient, effective and innovative service providers.

What Is Capacity Building?

Nonprofit capacity building refers to activities that improve and enhance a nonprofit organization’s ability to achieve its mission and sustain itself over time. Examples include: identifying a communications strategy; improving volunteer recruitment; learning about complex new IRS and state regulations; adopting new governance practices; identifying more efficient uses of technology; and engaging in collaborations with community partners. When capacity building is successful, it strengthens a nonprofit’s ability to fulfill its mission over time and enhances the organization’s ability to have a significant, positive impact on lives and communities.

Why It Matters to Nonprofits:

In 2009, the White House and Congress identified nonprofit capacity building as a priority and authorized resources for two important programs: $50 million through the American Reinvestment and Recovery Act’s Strengthening Communities Fund (SCF) and $25 million over five years for the Nonprofit Capacity Building Program (NCBP), which was approved as part of the Edward M. Kennedy Serve America Act. President Obama proposed an additional $50 million for the Strengthening Communities Fund in his budget request for FY2010, but those funds were not appropriated. The Nonprofit Capacity Building Program, which enjoyed significant bipartisan support, ultimately received an appropriation of only $1 million. The President’s proposed budget for FY 2011 does not seek funding for either program. 

It is essential that Congress consistently fund these programs at a level that allows them to make a difference. Nonprofits are on the frontlines of the recession and are essential in helping low-income individuals and hard hit communities recover. Sustained nonprofit capacity building will lead to improved service delivery, improved organizational effectiveness, and a more rapid economic recovery. 


In March of 2010, the President’s Advisory Council on Faith-Based and Neighborhood Partnerships recommended that “federally funded capacity-building programs … need to be reviewed and strengthened.” The Administration proposed $20 million in funding for the Strengthening Communities Fund program in FY 2012. By contrast, the Administration has proposed $985 million for the Small Business Administration.

What Nonprofits Can Do

Contact your Senators and Representatives and urge them to help strengthen the ability of nonprofit organizations to address critical needs in our communities by supporting $55 million in funding for the Strengthening Communities Fund and the Nonprofit Capacity Building Program.

Take advantage of any opportunity to speak to your lawmakers about the need for nonprofit capacity building.

Additional Resources