The economic crisis may have your nonprofit scrambling to find funding. But equally important is making internal adjustments that can boost your ability to fulfill your long-term mission. Capacity building is one way your organization can increase its odds of doing just that. But, as it turns out, a traditional approach may not be the most effective route.
Why you should consider the process
The National Council of Nonprofits defines capacity building as the “many different types of activities that are all designed to improve and enhance a nonprofit’s ability to achieve its mission and sustain itself over time.” It refers to whatever a particular organization needs to reach the next level of maturity — whether operational, financial, programmatic or organizational.
For-profit organizations regularly engage in such macro-level initiatives, but nonprofits tend to take more of a project-level perspective. The result can be instability that undermines the overall organization. The focus lurches from one project to another. Problems in other areas can fly under the radar.
Capacity building gives nonprofits the opportunity to strengthen their organizational infrastructure, including facilities, equipment or functions such as payroll and accounting. For example, you might target your management and governance capacity by formulating a succession plan. Or, you could expand your staff capacity through professional development. Other goals could include establishing a strategic plan, initiating more productive fundraising or serving clients more efficiently.
Who should join in
Whatever the goal, it’s critical that you include more than your board or executive leadership in the capacity-building process. They might start the ball rolling, but involving lower-level staff will help gain buy-in from the entire organization. It also may be advisable to bring in some outside consultants with experience conducting this exercise for nonprofits. They can save you time and keep you heading in the right direction.
Now, when resources are scarce, devoting funding to capacity building might seem like an extravagance. But you need to think about the long term, even when short-term issues understandably consume much of your attention. Keep in mind that grant makers might be willing to give you financial support during these difficult times.
Where you could go wrong
Capacity building typically begins with designated stakeholders using one of many available tools for identifying an organization’s strengths and weaknesses in a variety of capacities. You might, for example, launch client surveys or structured self-assessments where various capacities are rated on a scale of 1 to 5. (See “Getting the most out of the self-assessment.”)
Say an organization determines that its strengths include leadership from its frontline workers, and its weaknesses include outcome measurement. From there, the next logical step is to devise methods to mitigate the weaknesses, right? Not necessarily, at least according to research published in the February 2020 issue of Stanford Social Innovation Review (SSIR). The authors say that, while that approach can indeed make weaknesses (for example, poor outcome measurement) less glaring two years down the road, the organization’s impact on its targeted populations or issues likely won’t have grown much.
They endorse a strengths- or assets-based route to capacity building. Instead of focusing on the remedying of weaknesses, organizations should leverage their strengths. It’s not the best choice to work at improving capacities that are peripheral to your mission and operations, such as accounting, which can be more effectively outsourced. You’ll likely gain far more by pushing your core strengths “off the charts” and applying those strengths to address weaknesses in the ways that best serve your needs.
To illustrate, consider an organization that found that leadership by its frontline employees is a core strength — an actual example discussed in the SSIR article. The nonprofit built on that strength by bringing worker-leaders into its high-level strategic planning. Their in-depth knowledge of day-to-day activities helped shape the organization’s vision going forward.
It’s always admirable when an organization is open to identifying and working on its weaknesses. But remedying inadequacies usually won’t prove as productive as taking measures to pump up your strengths. Get a better “return on investment” by enhancing the assets you already have.