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A few years back, I directed a larger national training project that worked extensively with non-profits on fundraising, capacity building, and resource development planning.  One of the challenges of this work was that there was a surprising lack of  a common vocabulary describing the the differences between the three terms.  Unfortunately many nonprofit agencies used these terms interchangeably when in reality capacity building, resource development planning and fundraising are distinct concepts that together represent a taxonomy for developing a strong organization.

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Capacity Building is at the top of that taxonomy and is a term that reflects the approach to intentional development of the systems that support your organization.  Capacity building is the practice of developing and maintaining staff skills, organizational systems and intellectual and physical resources required to meet your organizational mission.  In short, capacity building is thinking about what it takes to maintain and build your organization.

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Resource Development Planning is the next level down on the taxonomy and is the intentional assessment of capacity gaps, the design of strategies and creation and monitoring of workplans to address those gaps.  A resource development plan might address raising fiscal capital but could also be related to human capital and intellectual capital.  For example, a resource development plan might related to strengthening the board of directors through strategic recruitment, training and engagement or it might focus on developing a web 2.0 presence on the internet.

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Fundraising is a strategy along with developing policies, and training that are required to implement a resource development plan.  Fundraising represents the base of the taxonomy.  Thinking about it another way, fundraising is the “tactical thinking” and capacity building is the “systems thinking.”  Fundraising is concerned with events and grants and reach.

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So, in theory nonprofit organizations need to define their capacity, create a resource development plan to support it and then implement fundrising strategies to support the plan and capacity development.  In practice however, it does not often work this way.  For example, the search engine Google has a nifty tool that lets you see how many searches there are for different keywords.  Searching for the three terms, “capacity building,” “resource development,” and “fundraising” yields some interesting results. When I did the search, limiting the scope to the United States, it showed that in a given month there are over 1.2 million searches for the term fundraising and three quarter million searches for the term fundraiser. Contrast that with the term “resource development,” which, in the Google world, only generates 74,000 searches a month.  The term “capacity building” nets less than 50,000 searches a month.

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In this highly non-scientific experiment we can draw one of two conclusions.  Either non-profit agencies have nailed the concepts of capacity building and resource development planning and are generally at the tactical level of fundraising or the comparison suggests that lots of well-intentioned non-profit agencies are myopic about finding the money and are under-investing the larger issues of resource development planning and capacity building.  My experience supports the latter conclusion.

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To be fair, I have heard comments, like these, “In the current economy our agency is teetering close to the brink of free-fall.  Donations are down, non-categorical funding opportunities are drying up and we are scrambling to fill a big deficit in our budget.  We need a new fundraiser to close the gap and don’t have time to think about capacity.”  I would argue that the imperative is not to adopt and either/or mentality but a both/and mentality.  The current economic crisis demands that we have the courage to stop focusing myopically on fundraising and broaden our lens to consider the larger view of resource development planning and agency capacity.

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As a board chair of a local non-profit agency, I understand the concept of “bleeding now” that we have to stop the bleeding.  It will take cutting budgets, possibly laying off people and eating up reserves.  However, I am equally convinced that to be successful fundraising plans need to be thoughtfully designed in the context of a larger resource development plan in the context of building agency capacity. Building agency capacity and not filling a budget hole needs to be the frame of reference. I believe that the challenge facing non-profit agencies is to be both systemic and tactical in  thinking and planning for the larger capacity needs while at the same time developing fundraising strategies.

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Again, from a facilitation and process viewpoint it comes back to creating a strong planning and facilitation infrastructure in your agency.  A facilitation infrastructure includes infusing mission, vision and strategy throughout the culture of your organization, creating outcome-based workplans, implementing focused meeting processes, and tracking outcomes and other accountability measures.

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In short, what gets planned for gets implemented and what gets implemented gets measured and the more precise, strategic, systemic, systematic, and thoughtful you are about planning implementing and measuring capacity, then the stronger and more sustainable your non-profit will become.

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Here is a link to a revised primer on resource development planning that I wrote a number of years ago.

Here is the link to the Google Keyword Search tool.

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