Denison Venture Philanthropy Club is starting up this academic year, and in about three weeks, the due date for our capacity-building grant will have passed (on September 21). Thus, I wanted to revisit my ongoing exploration of the academic side of capacity building.
In a previous essay, “Capacity Building: What, Why, and How”, I outlined what capacity building is, and gave my personal rationale and motivation for it, and reviewed a bit of research by Dr. Judd Pucella. If you look at “capacity” and have no idea what I’m talking about check there first.
I then moved on to discuss a McKinsey & Company report in my essay “Conceptualizing Capacity: The Capacity Pyramid”. In this essay, I will build upon the understanding of capacity outlined by Dr. Pucella, McKinsey & Company, and my personal experience by looking to The Urban Institute’s report “Building Capacity in Nonprofit Organizations” (PDF). There may be some overlap between this analysis and past ones, but bear with me.
The Capacity Framework
McKinsey & Company had the capacity pyramid. The Urban Institute offers us a more generic “framework”. However, the geometry of the capacity conceptualization doesn’t matter nearly as much as what the conceptualization represents. So what’s going on with these boxes and arrows?
The Urban Institute starts out by reminding everyone that non-profits are extensively diverse, and thus come in all sorts of shapes and sizes. However, these five abstract parts — values/mission, leadership, resources, outreach, and products/services — are commonly found in nearly every non-profit organization. The framework seeks to explain these five parts and provide a simple theory of how they interconnect.
Values and Mission
The values and mission of the organization are created by the leadership of the organization, and in turn inform the leadership, guiding them to act to uphold the values and accomplish the mission. The mission and values also directly change what products and/or services the organization offers, and evaluations of the performance of products/services will inform the values and mission.
The values/mission are important for setting the tone of the non-profit, communicating to people to inform their work, communicating to donors, and general motivations. They also provide the starting point needed to create metrics by which organization performance can be measured (how well is the org fulfilling its mission? how is that measured?). While values/mission are important to revisit and improve in their own right as a form of increased capacity, they provide context to answer “What is this capacity being built for?” and “What is this capacity trying to improve?” when building capacity in other areas.
Most simply, leaders “motivate others and create action”. This is intentionally broad, as leaders are needed at every level, and are not necessarily positional or people traditionally considered “in power”. As previously noted, leadership informs and is informed by values/mission. Leaders are also responsible for working on acquiring resources (broadly construed) and outreach. In turn, resources and outreach can be used to attract new leaders to the organization.
Capacity can be built within leadership by improving the existing leadership and/or getting new leadership. Leadership needs to be improved with an eye toward making sure it doesn’t get outdated, doesn’t lose connection with the mission/values, continues to be effective, and looks toward the future.
The concept of resources is taken very broadly to include financial resources (money); physical resources (building space, etc.); technological resources (computers, etc.); human resources (volunteers, employees, etc.). Resources are built by leadership, and in turn are used to build up the leadership. Resources are also used to implement the products and services of the organization as well as develop outreach.
Like leadership, resource capacity can be improved by using existing resources more effectively, getting more resources, or both — and the former is a very underrated form of capacity building. Traditionally, the bulk of capacity building has focused here, and only recently started looking at other parts of the non-profit organization.
An organization needs to be known in the community in order to be successful, and thus needs outreach. For organizations focused on awareness raising, outreach may be the final product, though at minimum all organizations need to make sure the target population is aware of the products and services being offered. Outreach is implemented by the leadership and used to attract new leadership. Outreach is also implemented with resources and can also be used to attract more resources.
Outreach capacity is pretty much only built by improving the effectiveness of existing outreach efforts, though this includes just devoting more time and resources to outreach. Building connections with outreach can, however, create a cycle of introductions through which even more outreach is built.
Products and Services
The ultimate goal of every organization is to accomplish the mission, as implemented by the products and services. The leadership, resources, and outreach in the middle are just really the means of transforming abstract mission to concrete results. However lofty or relevant the mission statement however, the organization must live and die by its actual results.
However, it’s one thing to have effective and useful products and services, and another thing altogether to be able to tell if products and services are effective and useful. Thus, capacity in this area can be built in many different ways — improve how products and services are implemented, improve what products and services are offered in relation to the mission, and improve how products and services are measured. Scaling up products and services as well as making existing products/services more effective are also two ways to build capacity here.
The Eight Core Components of Effective Capacity Building
In addition to the Capacity Framework, the Urban Institute also identified eight core components that effective capacity building has — it’s comprehensive, customized, competence-based, timely, peer-connected, assessment-based, readiness-based, and contextualized.
Comprehensive: There are a lot of different places organizations can build capacity, and organizations usually need additional capacity in many different places in order to function more effectively. Additionally, an improvement of capacity in one area may not be effective until capacity in other areas is also improved. Thus, capacity must be a comprehensive building package. Furthermore, since capacity building requires a lot of time to develop the right relationships, non-profits are typically drawn to the “one stop shop” capacity builders.
Customized: Non-profits are very diverse, and thus the needs of one organization may be very different from the needs of other organizations. Thus, any effective capacity building must be specifically targeted to the individual non-profit, not be one-size-fits-all. This requires the non-profit to be good at self-evaluation in order to know it’s own needs and communicate them, and the capacity builder to spend the time necessary to get to know the non-profit.
Competence-Based: Capacity building works best when preformed on a two-way street of sophistication — the capacity builder needs to be well-trained to build the capacity in the wide variety of necessary areas, and the non-profit needs to be savvy enough to make the process work. It’s important that would-be capacity builders don’t try to stretch outside their unique boundary of expertise, and important that organizations be able to handle the consulting.
Timely: Capacity building is very time sensitive, and has to be implemented in a “just right” Goldilock’s zone so that it’s quick enough to stay relevant, yet slow enough to allow the organization time to adapt, see the changes made in context, and re-evaluate. Often, the natural growth of an organization does not fit a quick “grant cycle”, and thus attention needs to be taken into the exit strategy.
Peer-Connected: Effective capacity building also works well with peer-to-peer sharing, networking, and mentoring. However, thoughtfulness needs to be put into deciding who is a “peer” so that information shared is relevant. However, if relevant conversations get flowing, solutions from one area can be applied to other areas, and capacity building projects can be implemented more smoothly.
Assessment-Based: Capacity building cannot be driven on the mission statement alone, but rather must be done in the context of thorough self-assessment of the organization to understand its unique needs, its unique capabilities, how well its doing, where there is room for improvement, and what that improvement would look like.
Readiness-Based: Capacity building also needs to be done when the non-profit itself is ready for it. Readiness and commitment to change are another type of assessment that has to be done to assure that the non-profit will actually benefit from the potential capacity to be built.
Contextualized: The capacity building also needs to be done in the context of the bigger picture of the organization, taking into account what its goals are, the big picture of how to improve upon those goals, and the other improvements the organization is going through (from other capacity builders or related services).
Five Challenges to Effective Capacity
The Urban Institute also found five big challenges to effective capacity building that need to be overcome:
#1: The capacity being built must be a high-quality service. Capacity building organizations have their own problems and inefficiencies to work through, and are often themselves in need of additional capacity to be effective. Capacity building is tricky and tough work that needs lengthy, large investments, which can be hard to come by. To make matters worse, rigorous studies of capacity builders don’t yet exist, and little research has been done at this end. In the end, an organization could be hurt by badly done capacity building and come out worse than they started!
#2: The capacity building must be done as a partnership. In order for capacity to be built, the non-profit and capacity builder must be able to work together, and work in sync. They have to be able to get along and understand each other.
#3: State of the art capacity building practices are not yet widely known. Capacity builders often don’t know of the emerging practices being developed by other capacity builders in other contexts and networks. Even worse, many organizations don’t well understand the work that capacity builders do, let alone the practices at the cutting-edge.
#4: Duplication of services needs to be avoided. With the increase in the amount of capacity builders out there, and the ebb and flow of grant making with new capacity builders coming in and old ones leaving, duplication is inevitable. However, as the next capacity builder works over the work of the previous one, they need to understand the previous work in context so as to not duplicate it unnecessarily or accidentally undo it.
#5: The capacity building field needs to communicate. Currently, cutting-edge capacity building programs are not widely shared from organization to organization, let alone rigorously studied, or generalized and transmitted across contexts. This leads to a lot of the same mistakes being repeated over and over, and other capacity builders “losing out” on an opportunity to improve their own capacity by becoming even better at building capacity.
Putting More of it Together
So reflecting back on my personal experience and the work of Dr. Judd Percella, McKinsey & Company, and The Urban Institute, I now conceptualize capacity as a complex interconnected web of nine key parts. However, there is a flow to it: we start at the top with the stated goals of the organization, which inform and are informed by the people working for the organization.
The goals influence culture, which influences and is influenced by the people who work at the organization. Goals are used to set strategy by the people working. This strategy is used to make plans about resources, outreach, and programs. Outreach itself creates outcomes for the organization (better connections) and can be used to improve the programs and resources.
Resources are used to fund the people, used by the people, used to preform assessment, used to fund and implement outreach, and used to fund and implement programs. Programs produce outcomes which are assessed, and that assessment is used to make sure the goals were implemented okay and improve the goals for the next time around. This then continues in an endless non-profit cycle. All of these nine areas have individual room for capacity, either by increasing their size or their effectiveness. However, while the needs may be distinct, the effect of capacity building will be interconnected, and thus must be comprehensive.
That’s all the theories of capacity building I have right now, but hopefully that presents a very complex picture, and this three part series generated a lot of useful and actionable advice.
Author’s Note: This essay was originally posted on The Denison Venture Philanthropy Club Blog, a blog I co-write for, dedicated to discussing articles and ideas related to philanthropy and social change.
I now blog at EverydayUtilitarian.com. I hope you'll join me at my new blog! This page has been left as an archive.