Funders know that capacity building isn’t one-size-fits-all. But funders and grantees both shared stories of foundations that bring in approaches with little to no regard for contextual circumstances facing nonprofits in a specific community. As one nonprofit put it, “Some funders think that just because a strategy worked in one country, state, etc., it will work everywhere. They don’t account for how each municipality has a personality with multiple cultures. Implementing exactly as it has always or elsewhere been done can set nonprofits up for failure.”
Understanding contextual circumstances — environmental and organizational — is key to setting objectives and managing expectations. They may impact different types of nonprofits in different stages of development in a variety of ways that are important to consider. To illustrate:
- A larger, more established nonprofit may have significant staff capacity and external credibility to execute programs. However, it may find changing its strategic direction difficult because internal bureaucracy inhibits nimbleness. Or stakeholders outside the organization may have strong, long-established views about what it should be doing that makes it hard to shift course.
- A small grassroots nonprofit may have more flexibility to change direction, but limited capacity to execute desired capacity-building strategies. If its track record and reputation are relatively unknown, it may have difficulty securing capacity-building support.
- A re-granting nonprofit may have significant capacity to fund other nonprofits but find its capacity intertwined with that of the funder for which it serves as a grantmaking intermediary
- A U.S.-based nonprofit may appear to adhere to generally accepted U.S. financial management practices better than an international nonprofit, but actually be significantly weaker financially than the non-U.S.-based nonprofit.
All of these context-related circumstances greatly influence the approaches a funder should take when determining capacity-building needs.
Some funders have developed assessment tools that help them collect data on the organizational context in which capacity building might occur. But understanding context inside and outside of organizations requires analysis beyond what any single due diligence tool can uncover. The circumstances of internal politics, leadership, governance, and financial health of organizations aren’t static. Nor is the socio-cultural and political environment and the vibrancy of the fields in which grantees work. As one funder shared, “Grantmakers have to differentiate the kind of support based on the possibilities context allows.”
Takeaways are critical, bite-sized resources either excerpted from our guides or written by GrantCraft using the guide's research data or themes post-publication. Attribution is given if the takeaway is a quotation.
This takeaway was derived from Supporting Grantee Capacity.