Capacity Building: What, Why, and How

The Denison Venture Philanthropy Club has recently opened its fifth grant for proposals, inviting Licking County organizations to identify the way they would use grant funds to build their capacity to serve the community — you can get a bit more information about this in the press release, or by visiting our Denison website.

This grant, like our previous four, is a capacity-building grant. Our mission statement says “our purpose is to effect positive and meaningful change in the lives of others by increasing the capacity of local organizations”. Improving the capacity of Licking County organizations has been our founding goal, and is still our current one.

While there is definitely a lot of overlap about how VPC members think about capacity, we still all think about it differently. So upon opening for proposals, it seemed like an opportune time to do some personal thinking about how I interpret capacity building, why I think it’s an important goal for VPC, and how we go about improving capacity. I stress that these are my personal opinions, and other members of VPC might see capacity differently than I do or approach it for different reasons.

 

What is Capacity and What Does it Do?

The first idea that comes to mind when thinking about capacity is the old saying “Give a man a fish, and he eats for a day. Teach a man to fish, and he eats for a lifetime”. Capacity building aims to apply this saying to the non-profit sector, by focusing less on providing one-time resources and more on fostering an ability for organizations to do new things for a lifetime. Most simply, an organization’s capacity is it’s ability to do more things better — able to do new things it wasn’t able to do before and/or able to do the things it used to do more effectively and efficiently.

Another way I think about capacity building is with lines and slopes, where the line represents organization output measured in whatever is relevant to the chosen organization’s mission. One could either focus on making a one-time bump in output which could be great, or one could focus on changing the slope and making output lastingly steeper, compounding over time. My guess is that we need both approaches and VPC does aim to do both, but capacity building is all about the second. This is why VPC focuses on making sure improvements are sustainable — I want the benefit we provide the organization to last even after our grant period is over and we’ve moved on to consider new organizations for new grants.

The hypothetical scenario we’ve used so far in our Request for Proposals to demonstrate capacity is that of buying printing vs. buying printers. A non-profit could propose spending VPC’s $10000 grant on printing educational pamphlets to provide to the public (a one-time bump) or focus on buying $10000 in printers in order to print pamphlets at a reduced cost, perhaps paying for itself in a year. Buying printers is an example of capacity building in a way that printing the pamphlets isn’t, because the organization is now more efficient and effective at printing, and has something that lasts (at least until the printer breaks down).

 

What Does Capacity Look Like?

Obviously buying non-profits a bunch of printers without checking to see if they need any is going to be ineffective, and signing up non-profit leaders for fishing lessons will probably do even less for them and the people they serve. So what do non-profits typically need that can be built?

Dr. Tanya Judd Pucella’s “An Analysis of Non-profit Capacity Building in the Mid-Ohio Valley” (PDF), from which Denison VPC has excerpted a section that outlines seven capacity types (PDF) — network and advocacy, financial resources, operations and governance, human resources, programs and planning, marketing, and information technology — though more types certainly exist.

1.) Network and Advocacy: This area centers on the ability of non-profits to connect with key policy makers and constituents and form relationships. These alliances help the organization learn best practices to self-improve, but also give them the leverage they need to better spread awareness of tackled issues, help analyze problems, and implement proposed solutions. Capacity in this area would be the building of new relevant connections and the strengthening of old ones.

2.) Financial Resources: Organizations need money to thrive. An example of one-time help would be a donation, whereas an example of capacity building would be to improve the organization’s ability to acquire more donors and support, such as direct fundraising and applying for grants. Financial resource capacity is the knowledge of how to acquire resources and be better stewards of existing resources.

3.) Operations and Governance: This area centers on the leadership within the non-profit. Improving the ability for an organization to plan strategically, improving management skills, improving staff relations and culture, and developing the board are all areas where nearly every organization can improve.

4.) Human Resources: This area focuses on the recruitment, retention, and development of those who work for the organization. Organizations need to recruit, manage, train, coordinate, and retain a key group of staff and volunteers. Capacity in this area would be best practices for human resource management, applied specifically to the culture and situation of the organization.

5.) Programs and Planning: Many non-profits focus on addressing a specific set of community needs by delivering a variety of programs. Capacity in this area focuses on making sure those programs go more smoothly and effectively. Good programs require a mission and vision and the strategy to achieve it. Capacity in this area would be best practices for assessing community needs, attracting clients/members, implementing programs to help them, and assessing how these programs worked.

6.) Marketing: Non-profit marketing is different than for-profit marketing, but the need still exists to advertise a non-profit to attract clients and donors, as well as spread awareness about certain problems and solutions, and getting feedback to improve programs. Marketing capacity is assistance in identifying the non-profit target audience, developing communications to achieve goals, and enhancing the organization’s visibility. Marketing is much more than just solicitations, but rather is broadly opening up channels for two-way communication.

7.) Information Technology: Information technology capacity is the identification of, purchase of, training in, and maintenance of computer technology that will assist in the non-profit mission, and incorporating the use of relevant technology in the organization’s plan. All of this requires a lot of specialized knowledge that can be given to the non-profit, in addition to the long-term capital purchase that also constitutes capacity building.

 

Why Do I Focus on Capacity?

If capacity building is sustainable growth in the form of helping a non-profit do more things better, why would we want to do such a thing? My rationale and motivation to approaching the non-profit world is wanting to do as much good as possible — to help as many people live as good lives as possible, to the best of my ability. In short, I want to maximize my personal value-added on the world, by avoiding harming others, helping others to live better lives, and living a good life myself. This philosophy fits in with utilitarianism.

I recognize that not everyone else might share this same passion for “effectiveness”, and might choose to approach things from a different way. I tend to be very cause-blind (aka issue-agnostic), meaning that I don’t have a few causes that I want to passionately support, but rather I want to find whatever cause is best suited for me to most effectively help other people, regardless of what that cause is. Other people may not find this approach right for them, and though I wish more people were cause-blind, I don’t mind because I think everyone is more or less allowed to have their own values (though obvious exceptions apply).

I take my personal role in VPC to be the same way — I want VPC to maximize it’s organizational value-added within Licking County. And I see capacity building as how we do so…

1.) An opportunity for long-term, bigger, lasting change: As mentioned in thinking of capacity as changing the slope of the line, capacity compounds over longer time intervals eventually making more change overall. While short-term changes are important, these opportunities to focus on longer-term changes are opportunities to make bigger impacts overall.

2.) An opportunity to do something organizations usually cannot: Often, non-profits are strapped for people, money, time, and other resources, and thus cannot focus on redoing their entire capacity structure. Additionally, the knowledge of what constitutes best practices is constantly being developed, and non-profits may not have the time or ability to keep up with the trends. Thus, VPC has a unique ability to spend our time and money focusing on capacity, whereas a typical organization often cannot.

3.) A unique way to apply our organizational resources: Capacity building is also an opportunity for VPC to make use of skilled members and knowledgeable staff and faculty. Building capacity is a complex process, and VPC has the 200 hour time investment and access to the knowledge necessary to build capacity, whereas many other people willing and able to help non-profits may not.

 

How to Improve Capacity?

So if VPC is on board with capacity-building grants and has some knowledge about what capacity building looks like, how do we go about actually building capacity through our grants? My personal experience with VPC has developed some quick rules of thumb:

1.) The organization knows best: The leaders of the organization are in the position to best understand the existing abilities and future needs of the organization itself. Thus the organization does not need to be “told what to do”, and the capacity builder should not assume superiority. Rather, the non-profit is to be trusted.

2.) Build the investee relationship: Capacity building has been a two-way street that requires frequent, open, and honest communication. There needs to be a relationship that shows the capacity builder and the organization both have a shared stake in the organization’s success. Trust needs to be present on both sides, and the capacity builder and organization staff need to communicate on equal footing.

3.) One size does not fit all: There is no one approach to capacity building that will work in every organization. Rather, each organization has different situations and different needs that need to be specifically addressed and uniquely met.

4.) Start and end in self-assessment: Organizations need to start by assessing themselves to know where they are struggling, so they can have adequate knowledge of their needs and work towards focusing on them. After capacity is built, additional assessment needs to be done in order to understand if the capacity building is actually working and to identify new problems. Without this assessment, things may be working, but it could be hard or impossible to tell. (If a non-profit is not able to self-assess in a useful way, this could be important capacity that is built.)

5.) Know your limitations and choose your battles: As a capacity builder, it can be tempting to assume you are more skilled or knowledgeable than you really are. However, if the end goal is to maximize one’s value-added, this requires being honest about one’s own abilities. One also needs to focus on finding good matches where the organization needs line up with the skills one is able to actually help with in an effective and competent manner.

 

Photo Credits: The “lifting arrow” picture comes from http://birminghamappraisalblog.com/market-trends/real-estate-agents-confidence-is-up. The picture of the fisher comes from http://www.gcocflytier.com/Flytiers_Links.html and the picture of the printer comes from http://innovativebox.blogspot.com/2012/07/output-devices.html. The success measuring tape comes from http://blog.lib.umn.edu/tel/blog/2011/12/measuring-the-quality-of-learn.html. The picture of Denison comes from http://ofgc.bizland.com/denison_university.htm.

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