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Capacity Building Overview

Capacity building well done in the nonprofit sector, I believe, is a critical answer to the extraordinary uncertainty we face and also to the tremendous political pressure under which most nonprofits are operating. Capacity building right now is arguably the most important investment the nonprofit sector can make.

Paul Light

Capacity Building: A Definition

There are many definitions of capacity building suggested by practitioners who work with nonprofit organizations.  Most have several elements in common: they emphasize strengthening nonprofits and achieving sustainability; enabling nonprofits to achieve their mission is usually mentioned, along with increasing organizational effectiveness; and they identify specific areas of organizational capacity that should be addressed. The following definition captures the strengths of many definitions:

"Capacity building" refers to intentional, coordinated and mission-driven efforts aimed at strengthening the management and governance of nonprofits to improve their performance and impact. This occurs through organization development activities, such as leadership development, strategic planning, program design and evaluation, board development, financial planning and management and others. 

Capacity Building Framework

Building capacity is about building an organization’s ability to perform well.  The following framework for capacity building borrows from the work of Paul Connolly and Carol Lukas, as well as other practitioners.  It includes six elements of organizational capacity (see below).  These interdependent elements provide the framework for successful capacity building, as they are important elements of a nonprofit organization’s health and performance. 

Mission, Vision and Strategy are the driving forces that give the organization its purpose and direction.  Service Delivery and Impact are the organization’s primary reasons for existence.  Strategic Relationships, Resource Development, and Internal Management and Operations are all necessary to achieve the organization’s ends.  Governance and Leadership represents the lubricant that keeps all the parts aligned and moving.  All of these elements are affected by the environment in which the organization operates.  In designing and implementing capacity building strategies, each element must be examined separately, in relation to the others and within the organization and its environmental context.  Taking a systems approach to capacity building, we will see that change in one element can affect others and the functioning of the whole.

At the heart of capacity building are resources and activities designed to advance an organization’s ability to deliver programs, as well as adapt, expand and innovate.  Following are the types of resources and activities that may be appropriate for nonprofits to engage in depending on resources available, assessed needs and action plans.  They are listed with the capacity building element to which they most directly contribute/strengthen.

Mission, Vision and Strategy Strategic Planning Organizational Planning Accountability Systems	Strategic Relationships Collaboration and strategic restructuring Marketing and Communications
Governance and Leadership Leadership development Board development Succession planning	Resource Development Fund development Business planning for revenue generation
Service Delivery and Impact Program design and development Outcomes measurement Program analysis and evaluation	Internal Operations and Management Human resources management Financial management Operations Technology and IS Facility planning Legal/ Risk Assessment Volunteer development

A Team Approach to Capacity Building

Strong leadership is one of the factors that ensure success in capacity building. Capacity building is a team sport that requires board and staff leadership. Organizations that are serious about building capacity are advised to convene a team consisting, at a minimum, of the Executive Director, other staff members selected by the Executive Director and board members, at least some of whom are in key leadership positions. This team will have primary responsibility for leading the organization’s engagement in the core capacity building activities. Additional board members and staff can also be involved and this is highly recommended. There are several advantages to this group approach. By sharing multiple perspectives on some of the problems and issues needed to be addressed it is less likely that problems will be misdiagnosed or that key issues will be overlooked. Another advantage to the team approach is that more people will gain a deeper understanding of critical organizational challenges that can be addressed through your capacity building efforts.

Core Capacity Building Activities

Capacity building engages nonprofit organizations in the following core activities using a combination of standard and tailored approaches.

• Assessment. Asset based forms and processes have been designed to assist nonprofits in pinpointing their current status and goals for growth. Nonprofits complete the assessment, examine results, use the results to develop action plan priorities and goals and measure progress.
• Action Planning. Using a format that aligns with the assessment, nonprofits then complete action plans that prioritize growth areas and include goals and action steps. The action plan guides the nonprofits’ use of resources to address priorities.
• Action Plan Implementation: Resource Linkage and Technical Assistance. Based on the action plan, nonprofits then identify resources, choosing from a range of options. (See next section.)
• Evaluation and Learning. Finally, nonprofits reassess their capacity periodically, comparing their new capacity levels in the six element areas to their initial assessment. They monitor, document and report their progress on action planning and capacity development, and engage in learning opportunities.

We've developed a capacity building toolkit that reflects best practices and lessons learned from the field and that assist nonprofits to engage in these activities. The toolkit consists of four tools:

Tool #1 – Assessment and Benchmarking
Tool #2 – Capacity Building Action Planning
Tool #3 – Capacity Building Resource Inventory
Tool #4 – Capacity Reassessment

Go to: www.createthefuture.com/CBtoolkit to access the toolkit. There is a description of the four tools along with guidance on how to utilize each of them.