How Can Your Foundation Sharpen Its Capacity-Building Purpose?

Interviewees suggested that it can be useful to periodically come back to the question of “why capacity building?” at your foundation and compare that to how capacity building is manifesting with grantees. Purpose can get lost if you don’t intentionally look at how it’s being approached through the investments your foundation makes. We heard, “Do this, but don’t get hung up on this exercise.”

The overarching purpose for grantee capacity building tends to focus in one of two ways.

• Often, organizational effectiveness is the intended result. In these instances, capacity building can focus on a single nonprofit, or it can support a cohort as a way of keeping a bigger group of nonprofits strong and healthy. For example, funders making these grants might support a single nonprofit’s strategic planning process or bring in a consultant to work with a cohort of grantees on organizational strategic planning. Often funders focus these grant outcomes on the action of capacity building, which results in something designed to increase organizational effectiveness, such as a strategic plan.
• In other instances, grantee capacity building is viewed much more as a strategy for strengthening the effectiveness of fields, movements, or systems. While it may build individual organizational capacities, funders with this view often seek progress on a particular social issue. For example, they might fund strategic planning; however, they would likely engage nonprofits they view as critical in issue areas, such as advancing reproductive justice or eradicating poverty.

While not every foundation, and even grantmaking portfolio within a foundation, needs to approach capacity building the same way, think about the process by which your foundation can develop a greater internal understanding of purpose so that the overall impact of this type of investment can be better understood and strategically applied in service to mission.