What is all this talk about capacity building?
What areas can be addressed to build organizational capacity?
How can it be integrated into the organization?
Nonprofit capacity building refers to the activities that help an organization fulfill its mission and sustain itself. This may manifest in the development of mission-focused communications, recruiting new talent, keeping sound financial records, adopting efficient technologies or creating key partnerships. When capacity building is at its best, it allows you to drive your mission forward, meet your goals and have a real impact on the community you serve.
According to Paul Connolly and Carol Lukas, authors of Strengthening Nonprofit Performance: A Funder’s Guide to Capacity Building, organizational capacity should be addressed in six fundamental areas, all of which are critical in building and maintaining a strong, healthy nonprofit.
1. Mission, vision and strategy
These are the agents that power your purpose and direction. A strong, focused mission and a clear understanding of your organization’s brand identity is key. Focused organizations keep their constituency in mind. They are able to articulate value and tie strategy to mission and organizational capacity.
Activities to help you build capacity in this area: Strategic planning, scenario planning, organizational assessment and development.
2. Governance and leadership
A nonprofit is only as strong as those who lead it. This means you need an engaged, supportive board with the tools and resources to effectively oversee policy, mission and goals, programs, finances and the performance of the executive director. You also need a “tapped in” leader, alert to community, funder and board needs, able to recruit and retain talent and supply the resources the organization needs to thrive.
Activities to help you build capacity in this area: Leadership development, board development and executive transition planning.
3. Program delivery and impact
Programming impact is why you’re here. And effective programs are those that truly serve community needs. Evaluation should be a priority as it informs goals, highlights successes and illustrates the impact on the target constituency.
Activities to help you build capacity in this area: Program design and development and evaluation.
4. Strategic relationships
Relationships are everything. Strong nonprofits are led by active, committed individuals who place priority on building and maintaining alliances within the community, as well as connecting with their constituency.
Activities to help you build capacity in this area: Collaboration and strategic restructuring, marketing and communications.
5. Resource development
To be effective, your goals and objectives should be clearly aligned with your mission. At every touchpoint, your organization should link strategic messages to resource development. Support for resource development should come from a variety of sources, creating a diverse, stable revenue flow.
Activities to help you build capacity in this area: fund development and business planning for revenue-generating activities.
6. Internal operations and management
Efficient and effective operations and strong management support systems are necessary to keep your nonprofit healthy and sustainable. Sound accounting principles should be paramount. Your organizational culture should promote open communication and respect, and encourage everyone to do their best. Asset risk and technology management should also be a priority.
Activities to help you build capacity in this area: HR management and training, financial management, operations, technology systems, facility planning, legal issues, volunteer recruitment and management, conflict resolution.