Helping to strengthen community groups and other nonprofit organizations to become more efficient and effective in meeting their missions offers another way to achieve your charitable goals. Often, this approach is called “capacity building” and it can take many forms.
Core support. Core support or operating support provides the community groups with unrestricted funds to cover basic operating costs such as rent, electricity or staff. Since many large foundations will provide funding only to seed new programs or for short-term projects, community groups often struggle to cover basic operating costs. This is the funding that sustains the work aimed at that group's primary mission.
While providing operating support may not seem like a strategic way to build an organization's capacity, it can serve to give organizations the breathing room they need to plan ahead and innovate.
Strengthening organizational infrastructure. Like any organization, community groups require working systems to place to make the most of the resources they have. Such systems can include accounting/financial planning, human resources (hiring and managing staff), fund development, data tracking/evaluation, technology, and governance (maintaining a well functioning board of directors).
As a donor, you may decide to target your giving to helping a group establish or improve the way its sytems function. You might, for example, help purchase new computers and software. Computer systems to help maintain patient records or to better keep track of numerous billing sources.
Community clinics or other safety net providers of medical services are often in need of new medical equipment that will help them serve their patients more effectively.
Technical assistance. Directors of community groups often arrive at their positions because of expertise in an issue, such as delivering health care services to the poor. These individuals may not have had a lot of experience managing a complex organization. In such cases, thoughtfully offered “technical assistance” from an outside consultant can help a group's leader think through, plan, and/or implement the management and organizational issues facing the group.
For example, a technical assistance grant can be used to create a strategic plan for the organization that lays out clear priorities, goals, and means of achieving those goals over a specified period of time, usually three to five years.
A technical assistance grant can also be used to pay for board training to make sure that board members are fully aware of and able to carry out their roles and responsibilities. Certain types of community health centers are required to maintain a percentage of client representatives on their board. These members bring excellent first-hand knowledge of a patients and the community, but might not be familiar with the many rules and regulations that govern the operation of clinics. In these cases, technical assistance can help ensure that all members can capably and confidently fulfill their duties.
Getting personally involved. In some cases, you may be able to contribute more than money to a group's internal capacity. You may have experience and/or training that could help a community group achieve greater financial stability or technological savvy. A number of grantmaking collaboratives and institutions have sprung up in recent years around the concept of donors providing both money and acumen to the nonprofit community.
This type of hands-on philanthropy is often referred to as venture philanthropy; it is modeled upon a for-profit “venture capital” approach. The best known of these organizations is Social Venture Partners (SVP). SVP links community professionals and nonprofit organizations in a hands-on consultative relationship, using a venture capital model, where partners actively nurture their financial investments with guidance and resources.
In Maine, a similar organization called Common Good Ventures partners with nonprofit groups to improve their performance. Common Good utilizes capital investments and long-lasting business-consulting partnerships to assist nonprofit groups in delivering more social good for every philanthropic dollar invested.
This type of hands-on grantmaking combined with business-like “return-on-investment” criteria can be highly formalized—as in the case of SVP and Common Good Ventures. It can also be less formal, with a single donor volunteering much-needed and otherwise prohibitively expensive professional services, along with a financial gift.
As one might imagine, these relationships can be tricky. Much has been written about the benefits and limitations of this type of grantmaking. Community groups might view your gift as having too many strings attached—especially if they feel compelled to follow the advice you offer. Honest and straightforward grant criteria in writing can help eliminate the gray areas in a donor/grantee agreement that might otherwise lead to misunderstandings and bad feelings.
Ways to target a capacity building grant. There are a number of ways to help a community group enhance its performance and capacity.
Because giving to organizational capacity can seem less straightforward than programmatic giving, you might consider articulating one or more of the following goals for your giving:
- To improve governance and leadership
- To improve staff skills
- To improve management systems and practices—including the use of techonology
- To create and implement a strategic or business plan
- To improve and expand core programs
- To improve financial management
- To strengthen organizing and advocacy skills, in part by developing a base of support and accountability to the community
- To experiment with a new strategy—for example, moving from direct service to an advocacy and public policy agenda
- To facilitate collaboration or coalition building among several like-minded groups; working together, various groups may be able to achieve more in terms of systems change than any one group working alone
Community groups can then report on the specific ways your giving helped advance the group toward a specific goal. Groups should also be prepared to link increased capacity to improvements in the ways they serve the community.
Once you have decided upon a goal for your giving, you will want to target a project that will help achieve that goal. You might consider the following activities:
- Board and staff development: recruitment, engagement, training, diversity, succession planning, management culture and systems, coaching and mentoring, governance structures
- Executive coaching: specific efforts to advance staff's skills and networks
- Strategic and business planning: participatory (staff, board and groups served) planning processes, mission, vision, goals, indicators to measure success in implementation of plans, efficiency analysis, cost of doing business analysis
- Resource development and financial sustainability: membership development, endowment plans, fee for service possibilities, social purpose enterprise, strategic staffing (on a temporary basis), training in planned giving, financial and information systems development, and some marketing projects
- Community organizing and coalition building: community outreach, issue and leader identification, campaign management, public policy analysis, lobbying, media outreach
Lots of excellent resources and examples of “strengthening community groups” are available to help you narrow down the best way to engage in this kind of giving. You will find a few in the sidebar.
Have a shared goal in mind. As in all giving, be sure that you and the community group share similar goals. Just because you think a community group would benefit from a technology plan does not necessarily mean that the community group is ready or willing to invest the time and energy needed to create one.
In the best case, you and the community group work together to develop goals that are realistic and appropriate. You may be in a position to encourage a group to think about capacity issues. If so, move slowly and respectfully: organizational change can be slow and difficult. Internal leadership and commitment, as well as your resources and encouragement, are critical to success.
Regardless of how “hands-on” you choose to become, a trusting and long-term relationship between you and a community group about which you are passionate is the single greatest ingredient for success. Beyond that, and the financial resources you provide, you have at least one major responsibility: to insist that increased organizational strength lead to stronger programs in the community.
Before you give... Support to build capacity is the perhaps the greatest wish of any community group. Because this type of giving can appear to be open-ended and ambiguous, consider ways to specify what you would consider to represent “success” resulting from a capacity building grant. Finally, be sure that the community group is prepared to engage in what might lead to an overhaul in its operations. The following questions will help.
Questions to consider before you give:
- Does the organization seem to be reasonably healthy and stable, or is it experiencing any significant threats to survival (e.g., major financial crisis, major leadership turnover or significant understaffing)?
- Is there evidence of effective program implementation to date and is there obvious potential for a major increase in impact (as illustrated by key indicators) within a reasonable timeframe (3-5 years)?
- Is there some experienced strong leadership on both the staff and board?
- Does there seem to be organization wide buy-in (board and staff) or is this effort being championed by just one or two people in the organization?
- Does the organization have the potential to attract other funds during and after the grant period?
- Does the organization seem to have an organizational culture that values, or at least allows, learning and behavioral change?
- Does the organization seem to have made time for senior staff to work with MCF/CGV and to attend regular peer learning to accomplish goals of capacity building work?
- Does the organization seem to be results-oriented and include a strong outcome measurement plan, or make a commitment to reserve a percentage of the grant for evaluation/measurement purposes.
- Is the organization aware of organizational capacity issues it faces and does it understand the complexity of those issues?
- Review the financial statement of the organization—are they running at a deficit? do they rely primarily on grant money? how large is their overall budget? is the majority of the budget targeted for program or administrative expenses?
- Review the budget for capacity building work. Are they looking at other funders? if so, have any other funders shown an interest? does the budget reflect the activities they say they'd like to do in the narrative?
You may find some questions irrelevant or have a few questions of your own, not listed here. This list is not meant to be exhaustive.
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