Capacity Building – The Ultimate Guide for Nonprofit Growth

Capacity building is crucial for your nonprofit’s long-term health. Staff and volunteer training, program management, fundraising, and technology are all crucial parts of capacity building and must be taken seriously. This article is here to help you learn more about capacity building and walk you through the process of developing a strategy for your nonprofit.

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Capacity Building – The Ultimate Guide for Nonprofit Growth

Capacity building is a term thrown around during board meetings and by consultants. Capacity building’s meaning can be basic or complex, but it includes all the changes and resources a nonprofit needs to fulfill its mission. Most nonprofits survive by any means possible, but capacity building is needed for long-term success and growth.

Organizations can do this by investing in technology, building a fundraising team, or updating management practices. In this article, we’ll explain how capacity building helps nonprofits, the types of capacity building your organization can include, and tips to create a capacity-building strategy.

  1. What is Capacity Building and How Does It Help Nonprofits?
  2. 3 Types of Capacity Building Projects Nonprofits Should Have
  3. How to Develop an Excellent Capacity Building Strategy

What is Capacity Building and How Does It Help Nonprofits?

Capacity building is an exercise for nonprofits to increase their effectiveness through short-term planning, staff training, longer organizational initiatives, or sector-strengthening changes that increase access to programs and knowledge for the entire community. It helps nonprofits optimize operations in order to fulfill their mission.

Capacity building can take place in the following different areas:

  • Governing and finance,
  • Technology and data systems,
  • Program implementation, monitoring, and assessment,
  • Fundraising and donor relationships,
  • Volunteer, staff, and board management,
  • and building collaborative partnerships.

Nonprofits that find ways to strengthen each of these systems can benefit from continued growth, stronger staff, volunteer, and donor engagement.

Many for-profit organizations offer consultation to aid capacity building. However, OCCUR is a nonprofit organization that offers capacity-building opportunities to support marginalized communities.

what is capacity building

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3 Types of Capacity Building Projects Nonprofits Should Have

Different types of capacity building can affect individuals, organizations, and entire economic systems. Each group can benefit from advanced information, skills, structures, and processes. If your nonprofit has decided to invest in capacity building on any level, there are a few projects you must include within each section.

1. Individuals

Capacity building for individuals can include recruitment, training and mentorship, and diversity policies and programs. Each area is vital to the long-term success of your organization. Some of the most essential persons of your organization can benefit from all three.

Governance and leadership training

Your Board of Directors is your organization’s leadership team. Board members must define the role of the nonprofit in the community, develop policies, fundraise, and strengthen relationships with donors. However, many nonprofits have difficulty recruiting board members and do little to train the members they do have. The results of this can be catastrophic.

Board recruitment, development, succession planning, and leadership training are all parts of capacity building for a board. In other words, your nonprofit can help strengthen your board and increase your organization’s chance for success by including diverse perspectives on your board, providing leadership and fundraising training, and regular assessments to support board growth. You also must create a succession plan to ensure the long-time success of your board and organization.

2. Organization

Most capacity building will focus on the organization as a whole. That is to say, developing a new focus on sustainability, improving governance, supporting collaboration, and strengthening infrastructure are all steps your nonprofit can include in capacity building.

2.1 Resource development

Resource development is the most popular type of organizational capacity building because you can see its immediate effects. Resources are defined as materials, money, or other equipment needed to function properly. These materials can have an immediate impact on staff, volunteers, and beneficiaries. Examples of resource development include:

  • Fundraising technology.
  • Education material.
  • Office and program equipment.

Investing in these resources may be necessary but at other times, nonprofits may lose their focus when trying to match competitors. Further, if your organization finds that obtaining specific resources will help fulfill its mission, you may focus on fund development or other ways to raise revenue.

2.2 Strategic partnerships

Nonprofits can gain greater access to many resources through strategic partnerships. Relationships with local nonprofits, the press, businesses, and foundations can all allow a nonprofit to reach a larger audience and find other sources of funding.

Collaboration, communication, and at times restructuring can all be a vital part of building these partnerships. Strategic partnerships are part of the capacity building because they open organizations up to a host of previously unavailable advantages.

2.3 Fundraising

Fundraising is one of the primary roles of your board and development team. Many nonprofits fall into the habit of throwing everything at the wall to see what sticks or continuing with what has worked in the past. However, as times change, and outside influences like the Covid pandemic create fundraising difficulties, most nonprofits must look at updating their fundraising programs.

When making necessary changes to your fundraising strategy, it’s vital to include all team members. In other words, they must involve staff, board members, and additional volunteers. Many nonprofits fall into the assumption that only fundraising staff is responsible for holding events or sending appeals. Your board should be playing a significant role in these activities.

You can also create a team of volunteer fundraisers to throw third-party events or start their own peer-to-peer campaigns.

To take advantage of these additions to your fundraising strategy, your nonprofit will need to invest in online technology. For example, you must find tools that help you raise more, train staff and volunteers in fundraising techniques, update financial goals and management practices, and strengthen donor relationships to develop long-term commitment.

WOCIP Foundation displays this with their online campaign page created on Donorbox. Their focus on long-term commitments, partnerships, and global capacity building educates donors on its importance and helps them see their role in making significant changes.

nonprofit capacity building

3. Systemic

Finally, systemic capacity building can focus on political and policy changes, or greater access to resources. Nonprofits can increase systemic capacity building with lobbying, advocacy campaigns, or by forming and supporting Communities of Practice.

Communities of Practice

A community of practice is a group of individuals who share a common goal to come together to increase the knowledge and access to resources for an entire community. As a result, many nonprofits have formed or supported these groups to strengthen their own organizations and their communities at large.

Communities of Practice help nonprofits with capacity building by providing knowledge and experiences shared by members, collaboration with other organizations to apply for grants or raise funds, and the trust built with donors based on these new resources.

OCCUR is one such example of an organization working to build opportunities and provide more access to resources for the Oakland community. This nonprofit works on several projects to support black businesses, close the technology divide and provide access to literacy.

capacity building

How to Develop an Excellent Capacity Building Strategy

Before your organization starts any capacity building it’s essential to build a strategy.

1. Focus on your mission and vision

Capacity building can help your nonprofit focus on its mission and vision and develop a system where all programs function with these goals in mind.

As you plan to increase your staff or technology and update governing principles, you must determine which needs best fit your organization. You may also update your mission and vision to support long-term growth.

2. Assess needs and resources

The first step to any capacity-building strategy is to understand your needs. Some needs may seem obvious, but there are several ways to address your needs and you may be surprised by how others look at them.

Conversations with board members, staff, and even volunteers may open your eyes to options you hadn’t thought about before. You can also send surveys to all staff members and volunteers to get a significant amount of feedback on your nonprofit’s needs. It’s vital you keep all survey questions open-ended to ensure you don’t influence the results.

Once you have a comprehensive view of your nonprofit’s needs, you must also assess your organization’s resources and how you can fulfill them.

Your nonprofit should focus on 3 areas when assessing your needs and resources.

  • Schedule – Is there a specific date to address this need?
  • Cost – What will it cost to address the need?
  • Staffing – How many people will it take to address the need?

The answer to these questions can help determine the status of each need, when they can be fulfilled, and how likely you are to complete any proposed projects.

Nonprofits have more access to resources than they may understand. Foundation and government grants are available to fund operational expenses, program updates, and even new technology.

Nonprofits can also benefit from volunteer manpower and any in-kind or pro-bono work you may receive from your supporters. These free options can provide everything from legal to fundraising and marketing services.

3. Don’t do it alone

Nonprofits often lack financial resources, but they can make up for it with solid support. You may have staff, board members, or additional volunteers willing to help. Create a team and assign tasks to each member.

You must include your board in the process of developing a capacity-building strategy. This ensures you can connect your organization’s resources to the needs they fit best.

If your organization is having difficulty getting on the same page, it may be time to hire a nonprofit consultant. Board members may have an easier time accepting details and facts when provided by a professional outside source.

If you do hire a consultant, it’s best to find one that’s worked on similar projects in the past. They can then work with you to create a working strategy to address your needs.

Donorbox Premium helps nonprofits with expert coaching services that help them tackle fundraising and donor management challenges, reach fundraising goals, and boost donations. Moreover, you get access to the best collection of dynamic tools, an account ambassador who’ll be there to guide your staff always, and priority technical support. Book your demo now!

4. Keep realistic timelines and goals

At times your nonprofit’s needs can feel overwhelming and immediate, but reality can make addressing all your needs at once impossible. Don’t feel disheartened. Small steps can make a significant difference. When you begin your capacity-building strategy, start with the easiest changes first. Additional needs will take more time, so as you plan how to meet these needs, give your team a realistic schedule to follow.

5. Invest when needed

While it is also best to use your current resources, do not be afraid to invest when it’s needed. For example, if your organization needs new software to collect donations or manage donors or for prospect research, marketing, or anything else for that matter, you must invest in a quality online tool that fits your needs.

Donorbox is an online fundraising tool that’s highly affordable for nonprofits of all sizes and types. You get started for free (and in just about 15 minutes!) and there are no monthly contracts either. Our platform fee for the Standard plan starts at just 1.75% and there’s a small payment processing fee for Stripe or PayPal. But Donorbox also lets you give donors the option to cover these fees. A lot of donors happily do that to help you further your mission.

However, you can upgrade to our Pro plan or Premium plans to reduce the platform fee down to a flat rate of 1.5%. Learn more about our pricing here.

Learn about our simple-to-use features and get started right away!

Here are a few quick videos to help you learn more about Donorbox and how simple it is to use as a nonprofit as well as a donor –

You can find more on our YouTube channel.

6. Monitor progress and challenges

Once you begin to work on projects, you can start to track the results. Schedule check-ins and take notes on the successes and challenges that come up. Keep your board informed and involved throughout the process.

For example, with Donorbox, you can easily assess the success of your fundraising campaigns. You can use filters on donations data (shown below) to check how much a particular campaign has raised and segment donor data as per campaigns to reach out to your donors. Further, you can add communication notes to donor records to better your donor relationships and keep track of any feedback.

nonprofit capacity building

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Final Thoughts

Capacity building does not have to be complex, and your nonprofit can start with small steps to address your needs. As you delve into more significant problems with your organization, you’ll likely need to invest in additional resources or manpower.

Donorbox customers have access to free webinars, guides, and downloadable templates that may help your organization plan a capacity-building strategy or address your organization’s needs. Check out Donorbox Webinars and the Nonprofit Blog.

Donorbox is chosen by 50,000+ organizations across 96 countries for their online fundraising, donor management needs, membership campaigns, peer-to-peer campaigns, and event ticketing. All these features are designed to make it easy and affordable for nonprofits to get started. To know more, explore the website.

If you’re looking to network, learn, and grow with peers in the nonprofit industry, Donorbox Knowledge Community is where you must be. Check out our Academy page for helpful courses that may fuel capacity building efforts in your nonprofit.

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Kristine Ensor is a freelance writer with over a decade of experience working with local and international nonprofits. As a nonprofit professional she has specialized in fundraising, marketing, event planning, volunteer management, and board development.

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