Intentional Nonprofit Capacity Building
The economic downturn that occurred in the last couple of years has been unquestionably harsh on most nonprofit agencies. The increases in service demand, coupled with the decreases in revenues have created organizational strains and fractures that will linger for years to come. If there is any silver lining to this recent crisis, it is that has it forced many nonprofits to question their very foundations of mission, vision and operation. In this context, the exploration of capacity and capacity building has increased in prominence and profile across many organizations. To that end, innovative and adaptable organizations are using this crisis to fundamentally rethink capacity and are linking strategy to capacity.
I recently attended a panel discussion geared towards grant makers on the topic of nonprofit capacity building. The panel discussed capacity assessments, the role of training, coaching and consulting and evaluating capacity building efforts. As with many lunch presentations there was much more content than time, however, it was interesting to hear the “30,000 foot view” of capacity from funding agencies’ perspectives. As one who has worked with nonprofits in capacity building for many years, the discussion of tactics by the panel revealed little new information. However, what was interesting in the presentation was the discussion of the “disconnect in thinking” between funding agencies and nonprofit agencies around the concept of capacity. The disconnect in thinking can be summed up in this way: When nonprofit agencies think about capacity building, especially in the context of seeking a capacity building grant, they really are asking for operating support for specific projects. When grant makers talk about capacity building, they are talking about developing infrastructure. Adapting an illustration that one participant gave, it is like a vegetable garden where the nonprofit is concerned about a particular plant in the garden and the grant makers are increasingly interested in the root system and soil that supports the entire garden. In previous posts I have discussed the concept of initiating a capacity building conversation and also discussed capacity building in the context of resource development planning. In this post I want to discuss facilitating an organizational capacity planning process.
Before discussing the process, we first need to define what is meant when we discuss capacity and capacity building. As we are reminded in that now classic primer on nonprofit jargon “in other words,” (external link) capacity is one of those “vague, quasi-occult terms” that evokes the need for outside “expert” consultants who understand the deep mysteries of the concept. The unfortunate byproduct of such a misunderstood word is that the ambiguity of the term makes the concept of capacity and capacity building seem daunting to an organization. So as an opening premise, I would like to suggest a clear and concise definition of capacity as “the sum total of the strategy, management, staffing, infrastructure, resources and operation of an organization.” The process of capacity building then becomes the deliberate assessment and improvement of those core elements of capacity. The following is a suggested facilitated process for capacity building.
1. Assessment: As with most organization development and performance improvement projects, the first step in the process is to take a systematic assessment of where you are right now. There are several nonprofit organizational capacity assessment tools that can be found with a simple web search. The grandfather of tools was developed for Venture Philanthropy Partners by the mega consulting firm of McKinsey & Company (external link). This tool has been adapted by Marguerite Casey Foundation (external link) and has also been adapted by Social Venture Partners International (SVPI) and is available as an Microsoft Excel spreadsheet (external link). Taking the SVP tool as an example the rubric addresses: financial management, fund development, information technology, marketing and communications, program design and evaluation, human resources, mission, vision, strategy and planning, legal affairs, leadership development, board leadership. Future versions of the SVP tool will address cultural competency and policy advocacy as additional areas. My experience (and the experiences of a few colleagues) in using the SVP tool has been that the level of depth of the tool may be less relevant for smaller or grassroots organizations. In these cases, another useful tool to consider is a “Tool for Assessing Startup Organizations” that was designed to be a due diligence supplement for grant makers (external link). As I suggested, a web search will help identify additional approaches to capacity assessment. The point of drawing attention to several tools is less about “what tool to use” and is more about illustrating the need for a framework for systematically assessing your agency capacity.
Once you decide on an approach, implementing a capacity assessment ideally takes a 360 degree approach that solicits relevant input from staff, board, clients, funding agencies and other stakeholders. The wider and more inclusive the process, the wider and more inclusive will be the insights on capacity. Note: I would be remiss to point out that online surveys can be an effective way to conduct an assessment.
2. Dialogue and Planning: The second stage of a capacity building process to create and intentional dialogue around the findings with three important goals that include: a) creating a shared understanding of where the agency is starting from and where it is going, b) deepening the spirit of community and commitment to strengthening the organization, and c) creating workplans that support capacity building. While workplan development can be a time intensive process as I have suggested elsewhere I do want to underscore that reflecting on a capacity assessment should also be a time of building community and commitment. The dialogue and planning process lends itself well to an “intensive” like a board and/or staff retreat, but also could be the basis for a “learning community” process that spans 4-6 months and includes spaces for homework and reflection.
3. Action: The third stage of is the action stage of implementing capacity building workplans. Recognizing that capacity building is an ongoing commitment to continuous improvement, there needs to be the intentional structures to manage and monitor progress over time. Since capacity building is really about improving an entire system is also useful to think of implementation as a series of “rapid cycle tests” using a model such as the Plan, Do, Study, Act (PSDA). There are a number of good primers for this model online, (external link). Finally, it is important to keep in mind that the action stage will likely taking an agency into new organizational territory and will likely require some investments in the professional development of the agency’s staff and board.
4. Leverage: The final step in a capacity building process is to be intentional about leveraging your efforts for capacity building. This brings us back to my opening discussion of grant makers’ perspectives on capacity building. The organization that invests in the systematic planning for capacity building is uniquely positioning itself to pursue a capacity development grant. For example, I know of one agency that received a three-year capacity building grant after taking an entire year to asses and begin to implement a plan to build capacity that the entire board stood behind. Based on the demonstrated movement towards capacity, the agency was well positioned to seek a capacity building grant. A grant-writing acquaintance once stated that when it comes to capacity building grants that funding agencies “want to improve organizations –not rescue them,” and so it is imperative for organizations to start from a position of strength. I believe that the leverage of capacity building grants is most effective when agencies are already engaged in the forward motion of capacity building.
I recently read a great article titled “On not letting a crisis go to waste: an innovation agenda for Canada’s community sector” (external link) that reinforced the concept that the nonprofit community/social sector is being tempered as we continue to struggle out of the economic recession of the last several years. Implied and stated in the article is that agencies demonstrating vision, leadership, adaptability and innovation are the ones who will not only strengthen themselves but help strengthen and reinvent the social service and community sector. For many nonprofits this journey of innovation and opportunity begins with an intentional facilitation of a capacity building process.
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