By Carla Taylor and Lori Bartczak
Nonprofit organizations must be strong and healthy to consistently deliver effective programs that advance their mission. Research backs this up; a study on Meyer Foundation grants found that investments in capacity produced positive, long-term financial results for nonprofits, regardless of the type of capacity building grants provided. Many grantmakers recognize this pattern and invest in capacity building for their grantees. According to a study from Grantmakers for Effective Organizations, 86 percent of grantmakers support some form of capacity building.
Through our work with partners, we have seen a number of grantmakers make deep, intentional commitments to building the capacity of their grantees. We’re excited to collaborate with GrantCraft to lift up some of the work we’ve been fortunate to be part of. In a series of five case studies, we will explore various approaches grantmakers are taking to support nonprofit capacity, the multitude of ways grantmakers think about and define capacity, and lessons learned from each approach.
The case studies, coming out over the next several weeks, will feature the work of five foundations:
- The Kresge Foundation — Advancing Racial Equity Through Capacity Building: The Kresge Foundation’s Talent and Leadership Development Efforts. Read the case study.
- Evelyn and Walter Haas Jr. Fund — Strengthening Fundraising Capacity: How the Evelyn & Walter Haas, Jr. Fund is Supporting Innovation. Read the case study.
- Wells Fargo Regional Foundation — Community-Led Change: How the Wells Fargo Regional Foundation Builds the Capacity of Nonprofits and Communities to Shape Neighborhoods Together. Read the case study.
- Annie E. Casey Foundation — Building Capacity to Influence Public Policy: How the Annie E. Casey Foundation is Equipping Nonprofits to Advocate More Effectively. Read the case study.
- Ralph C. Wilson Jr. Foundation — Catalyzing Collaboration and Innovation: How the Ralph C. Wilson, Jr. Foundation is Taking a Networked Approach to Building Nonprofit Capacity. Read the case study.
While the stories illustrate unique approaches, there are five common elements of capacity building that connect these narratives and that grantmakers might consider in their plans.
1. Commit for the long-term.
Nonprofits’ capacity-building priorities evolve over time as they work toward lasting change. In this context, capacity building requires long-term investments that are both realistic about the timeframe for social change and responsive to the developmental nature of grantees’ work.
As a spend-down foundation, the Ralph C. Wilson Jr. Foundation has set a 20-year vision for strengthening the capacity of nonprofits in Southeastern Michigan and Western New York. The Wells Fargo Regional Foundation also makes long-term commitments, partnering with grantees in its Neighborhood Grants Program for sometimes more than 10 years.
“We knew that we were addressing a long-term problem, so we needed a long-term solution,” said Lois Greco, senior vice president and evaluation officer at the Wells Fargo Regional Foundation. “You wouldn’t buy a house with a one-year loan. So why would you make a one-year grant to fund a twenty-year solution?”
2. Co-create solutions with stakeholders.
Nonprofit leaders possess critical information about the history and context of their work and what types of support are likely to make the biggest difference. Grantmakers should seek out these insights by engaging grantees in the design of capacity building approaches.
Building on a long-history of approaches to supporting leadership that are based on research and input from grantees, the Evelyn and Walter Haas Jr. Fund used human-centered design methodologies to tap the insights and creativity of nonprofit leaders and service providers about how best to help nonprofits address fundraising challenges inside their organizations. Similarly, input from community is informing the Center for Nonprofit Support in Detroit, funded by the Ralph C. Wilson Jr. Foundation, every step of the way, from developing the logo and brand to designing the programs and services.
“Often community engagement is a one-time activity or a box that’s checked,” said Allandra Bulger, executive director of the Center for Nonprofit Support. “I don’t believe in the idea that if you build it they will continue to come. If you build something folks might come, poke around and see what it is, but for folks to truly engage in the center they have to see themselves in that space. They have to be part of cocreation.”
3. Strengthen the ecosystem.
A healthy nonprofit ecosystem includes a robust network of diverse supports. Paying attention to the relationships among capacity building consultants and technical assistance providers is an important ingredient for success.
An unexpected benefit of the pilot of The Kresge Foundation’s capacity-building program focused on talent and leadership development and racial equity was the opportunity for greater coordination and collaboration among service providers participating in the program. In the next iteration of the program, foundation staff made this an explicit goal of the program. The Evelyn and Walter Haas Jr. Fund also considered the ecosystem in which nonprofits operate: when identifying ways to help their grantees with fundraising challenges, the fund engaged service providers to shine a light on more holistic approaches to supporting fundraising inside organizations.
“The capacity building field is largely made up of subject experts,” said Julia Ritchie, director of strategy and special initiatives at the Haas Jr. Fund. “Unintentionally, many capacity building practitioners reinforce the very siloes that we are trying to break down in organizations. For instance, [some] strategic planners don’t include a revenue or business plan, [and some] fundraisers think only of the tactical solutions to fundraising but don’t think about the leadership and cultural practices that are needed to build and sustain fund development.”
4. Support both technical and adaptive capacities.
Funders and nonprofits alike recognize the value of adaptive capacities—such as the ability to collaborate, influence others and share leadership—in addressing complex problems. At the same time, research from the Center for Effective Philanthropy shows that the areas in which nonprofit leaders say they need the most support are technical capacities like fundraising, staffing and communications. Capacity-building approaches should look for needs and opportunities on both fronts.
Through its Neighborhood Grants Program, the Wells Fargo Regional Foundation supports a variety of capacities ranging from the technical aspects of financial sustainability to the complex, adaptive work of collaboration. Adaptive and technical capacities are sometimes intertwined: data on the Annie E. Casey Foundation’s KIDS COUNT grantees shows that strategic leadership capacity is a predictor of whether organizations will be strong in other areas, such as advocacy capacity and racial equity and inclusion capacity.
“Racial equity and inclusion is not just technical work,” said Jann Jackson, senior associate at the Annie E. Casey Foundation. “It requires adaptive leadership at the personal, organizational and systemic levels. We can read all the books and know the history and structure of racism in America, but until we change our views and behavior, whatever we do will not be sufficient. The work is never done.”
5. Ground capacity building in equity.
Efforts to advance social change in America inevitably come up against systems and structures that have created racial disparities for generations. To be effective, nonprofits need to understand how to advance racial equity through their programs and how to become more equitable inside their own organizations.
The Annie E. Casey Foundation, through its KIDS COUNT network, has defined competencies it thinks are necessary for nonprofits to effectively influence policy at the state level. Each of those core competencies includes a racial equity component, and the foundation has defined racial equity as a stand-alone competency as well. In another example, The Kresge Foundation’s Fostering Urban Equitable Leadership (FUEL) program is focused on supporting leadership development through an equity lens.
“Conversation is a necessity moving forward,” said Rip Rapson, president of The Kresge Foundation. “If we hope to fashion a more equitable society, we have to learn to have ongoing, frank and inherently difficult discussions about the needs of organizations facing up to this challenge. FUEL gives us an important tool for advancing this work.”
Join the conversation
These case studies show just five approaches. We would love to hear from more grantmakers committed to supporting nonprofit capacity. How do these elements for success show up in your approach to capacity building? What from this list do you want to try? What other elements are key to your success in capacity building? We’d also love to hear from nonprofits about their experiences receiving capacity-building support. What works well? What do you wish grantmakers did more of?