Tools for Capacity Building

How Much Does Capacity Building Cost?

Do you know how much it really costs to deliver your mission? Nonprofits need to be able to track the actual costs of their programs and services in order to 1) budget accurately 2) inform funders about the full cost of program delivery; and 3) determine the cost/benefit of engaging in specific activities over the long run.

• Learn how to calculate full costs with a Cost Analysis Toolkit developed by Bridgespan.
• Read a helpful article by Bridgespan, Costs are Cool: the Strategic Value of Economic Clarity, stressing the importance of resource allocation and the need to identify full costs as part of that analysis.
• See the Appendix of the article above for a full explanation of "full costs."
• Understand how to account for various costs such as "management and general" and "fundraising" costs. The article, What is Overhead? from the Nonprofit Assistance Fund, can help you classify expenses correctly.

Self-Assessments

• Read about the life cycle of nonprofits and use the Organizational Self-assessment matrix provided in this article to determine where your organization fits in the cycle, which can help you determine areas where your nonprofit can benefit from capacity building.
• The Drucker Foundation Self-Assessment Tool provides a process for nonprofit organizations to clarify mission statements, define results, set goals, and develop focused plans.
• What are your nonprofit’s greatest needs for capacity building? Conducting a self-assessment such as using the organizational capacity assessment tool developed by the Marguerite Casey Foundation, can help nonprofits identify capacity strengths and challenges, and establish capacity building goals.
• The Innovation Network, Inc. also offers an organizational assessment tool, among other tools, through its "Point K" website resources. Free registration required.
• The TCC Group has developed a Capacity Building Self-Assessment tool that nonprofits can use to assess and prioritize their capacity building needs. The tool is also useful in the analysis of what type of capacity building would yield the most impact at your nonprofit’s current stage of development.

Tools for Board Training and Development

• Use these free, short, videos to spark discussions and train staff, volunteers and board members. Topics include: (i) how can you engage your nonprofit in more sustainable "green" practices? (ii) What are the priorities for a new executive director in his/her first three months? (iii) What is the difference between an organization’s mission and its vision? Source: Third Sector New England.
• Engage your board with a virtual board orientation training through CompassPoint’s online free tutorial that board members can do on their own with a computer and internet connection, anytime!
• Conduct a self-assessment to determine the strengths or gaps in the composition of your nonprofit’s board using this Sample Board Composition Matrix.
• For more tools to use with your board, such as a sample table of contents for a board orientation manual, a sample board member code of conduct, and sample governance policies, visit the Governance section of our website.

Revisit your mission: As time goes on, nonprofits should revisit their mission statement to ensure that their activities are still consistent with the mission – and that the mission has kept up-to-date with the direction of the organization. Read this short article to learn about a process for engaging your board in a review of the organization’s mission statement.

Capital projects: Before launching a building expansion or planning for a capital campaign project, make sure your nonprofit has the needed capacity to bring the project to fruition and sustain the expansion responsibly.

Planning for the future:

• What are the trends that will impact the sustainability of a nonprofit? Convergence – How Five Trends Will Reshape the Social Sector, by LaPiana Consulting (2009), for the James Irvine Foundation, will convince you that all nonprofit leaders (and funders) need to keep their eyes on future trends.
• Before launching into any future planning, review Lessons Learned: A Planning Toolsite offered by the National Endowment for the Arts, based on lessons learned from NEA’s experience administering planning grants for arts organizations.

Using Consultants: Before engaging a consultant to assist your organization with capacity building, be familiar with the ethical standards developed by the Alliance for Nonprofit Management specifically for consultants who provide capacity building training for nonprofits.