Capacity building makes your nonprofit a more powerful force for good.
I am constantly talking to nonprofit organizations that are trying to grow to more fully address the needs of their constituents and fulfill their missions. Whether they use these words or not, what they are seeking to do is build capacity. In this post, I’ll be sharing some key elements of successful capacity building, plus an innovative way nonprofits are building capacity affordably and efficiently.
What is capacity building and why is it so important?
The Council of Nonprofits defines capacity building as “…whatever is needed to bring a nonprofit to the next level of operational, programmatic, financial or organizational maturity so it may more effectively and efficiently advance its mission into the future.” They go on to summarize why it’s so important: “While often overlooked, capacity building develops the all-important ‘infrastructure’ that supports and shapes charitable nonprofits into forces for good.”¹
Although nonprofits were told otherwise for a very long time, today it’s widely accepted that nonprofits need sufficient infrastructure to accomplish their work. Likewise, expanding services most often requires a thoughtful expansion of infrastructure.
The inclusion of the word “future” in the Council of Nonprofit’s definition is also important. Capacity building and sustainability are intertwined concepts. The goal should be building infrastructure that positions you for long-term stability, mitigates threats and positions you for long-term success.
Successful capacity building will also have this added benefit for your fundraising: the most sophisticated funders want to invest in organizations that are going to be around for a long time. They want to see evidence of your leadership and plans for capacity building.
What are examples of capacity building?
The Network for Nonprofit and Social Impact (NNSI) has identified eight essential capacities nonprofits need to build. One of those is staff management, delivering the training and mentoring volunteers and staff need to succeed. An investment in training fundraising staff members in a new area, like grant funding or corporate partnerships, would be one example of capacity building in the area of staff management. The organization is investing in targeted professional development with the goal of establishing new revenue channels.
The other seven capacities that round out their list are strategic planning, financial management, external communications, board leadership, operational capacity, mission orientation and adaptive capacity. You can read more about each here.
What are some essential elements to building capacity?
Creating a plan. Creating a concrete plan will greatly improve the likelihood that your capacity-building efforts will translate into results. This strategic document will outline both the current and the desired state of capacity of your nonprofit. It will identify the gaps between your current state and future vision, and it will document the steps you plan to take to close those gaps. The plan should also include milestones you expect to hit along the way and how you plan to measure success. Did you actually add capacity to your organization? How will you know?
Securing funding. Although there are some ways to build capacity without spending more money (you can find a few of them here) most capacity-building efforts will require an investment of funds. Traditional funding sources can be used to support capacity building, but this may require you to progress at a slower pace. There are also some funders, committed to capacity building in nonprofits, that welcome nonprofit proposals for staffing, technology and operational support. Doing a foundation search with a filter on capacity or infrastructure funding would be one way to look for them.
Leveraging technology. For volunteer-driven nonprofit organizations on tight budgets, integrating technology into daily operations can be extremely challenging. Yet, technology is often the answer to greater efficiency and staff relief. Building technology funding into grant requests for other operational areas or allocating budget to secure an expert assessment of your technology needs or are two of the strategies recommended by the Center for Effective Philanthropy (CEP). ²
Adding professional expertise. At some point, to achieve sustainability and growth, almost all nonprofits will need to supplement the skillset and bandwidth of their volunteers. This can be done with the addition of full- or part-time staff, or it can be achieved via fractional staffing, which enables nonprofits to engage skills instead of hires.
How can fractional staffing contribute to capacity building?
Nonprofit fractional staff are subject matter experts who work remotely and share their services between more than one organization. This creates a bench of nonprofit experts who can be contracted in a very flexible way. This makes them an efficient, affordable resource for building capacity.
Imagine you really need the skills of four very different types of nonprofit professionals to reach your next goal, but you only need their help for ten hours a month each. If your only option is a full- or part-time hire, you will almost certainly be paying for more hours than you really need and doing without some skills that no one hire is likely to possess. Alternatively, you can engage a fractional team capable of delivering the disparate skills you need (administrative, marketing, fundraising, etc.) for precisely the amount of time each is needed. Or, you can engage one fractional expert for only the length of time and number of hours needed to get a particular initiative up and running.
Here are some examples of how nonprofits are employing this model and achieving success in building capacity:
Fundraising Program Expansion: An environmental education nonprofit wanted to expand its fundraising in the area of major individual gifts. Instead of hiring a full- or part-time staff member, they engaged a fractional staff member with years of professional experience in major gifts and capital campaigns. Working 25 hours/month, she partnered seamlessly with the organization’s development team to plan and then execute expansion of the major gifts program. The result was a 50% increase in major gifts in the first year.
Marketing and Communications: A nonprofit that provides services to people with disabilities wanted to get its message out to more potential clients and donors. However, their volunteers and single full-time staff member lacked the time to regularly execute on a marketing plan and weren’t fully familiar with the capabilities of their email marketing platform. They engaged a fractional staff member for 40 hours/month to build and implement a series of email marketing campaigns and social media posts. The result was a 25% increase in clients served and a 20% increase in donations.
Financial Management: A nonprofit that provides services to low-income families felt they could be managing their finances more effectively. They engaged a fractional staff member with experience in nonprofit financial management to assist them 20 hours/month. The fractional staff member worked with the organization’s finance team to create a budgeting process that included monthly financial statements and cash flow projections. The result was a 20% decrease in expenses.
Key Takeaways
When nonprofits can deliver seamlessly and provide a greater range of services on a larger scale, it means the world to those they help. A plan for capacity building makes it achievable and fractional staffing can support capacity building with the right skills at the right time.
The More Than Giving Co. supports nonprofits in capacity development. Our consultants can help you develop a plan for capacity building and our fractional staff can help you execute by supplying expertise exactly when and where it’s needed. I invite you to book a complimentary call with me to discuss your unique situation.
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