Historically, nonprofit organizations were considered effective if they had effective programs. Now, many leading grant makers and nonprofit professionals hold that the reverse is also true: effective programs need effective organizations. This simple statement and how it came to be inverted tells the story of what "capacity-building" is all about.

In an effort to make every dollar count, nonprofits were (and still are in many cases) encouraged to keep administrative, non-program costs to a minimum. Unless the organization also had access to "general support" or unrestricted gifts, this practice resulted in an organization that could win support for its programs even though the organization itself was just barely getting by. "Capacity building" came from the idea that the "organization itself" has legitimate needs beyond its program or service delivery. It also came from the reality that an organization that strives too hard to be "lean and mean" will end up being "lean and weak."

Aside from the essential quality of its programs or services, an organization also depends on the ability of its staff members to perform their jobs and the existence of management, financial, technology, and administrative capacity that connects an organization to its community and enables it to sustain itself beyond the time and resource constraints of program-specific grant support.


There are many acceptable definitions for "capacity building," but like the word "leadership", its literal meaning is not nearly as important as the ideas the term embodies.

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"The Capacity Framework defines nonprofit capacity in a pyramid of seven essential elements: three higher levels - aspirations, strategy, and organizational skills -three foundational elements -systems and infrastructure, human resources, and organizational structure -and a cultural element which serves to connect all the others."

— "Effective Capacity Building in Nonprofit Organizations" Prepared by McKinsey & Company, Published for Venture Philanthropy Partners, August 2001

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"Capacity building refers to activities that strengthen an organization (or person or community) and help it better fulfill its mission. Capacity building can occur in virtually every aspect of an organization, including programs, management, operations, financial management, fund development and communications."

— Sierra Health Foundation "Partnerships" Volume 14, Number 2, December 2002

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"The term capacity building refers to the process of strengthening an organization in order to improve its performance and impact."

— Paul Connolly and Carol Lukas, Strengthening Nonprofit Performance: A Funder's Guide to Capacity Building; Wilder Publishing Center, November 2002

The answer will vary for each organization, but here are some of the operating assumptions based on GVC's experience with capacity building initiatives:

• It won’t be in the spotlight but behind the scenes. Compared to saving lives, presenting works of art, or improving the environment, organization building is not likely to grab headlines. It requires commitment and motivation that is different from mission-driven program work.
  
  
• It is not so much a rocket as it is a ramp. Capacity building at its best is not a one shot, fast track deal, but is most effective if it occurs over an extended time.
  
  
• It is more tailored than it is off the rack. While it is impractical to create individually tailored programs for each and every organization, it is also impossible to create an effective one-size-fits-all approach. Capacity-building will take various forms to be effective across such a wide spectrum of organizations that exist in the Valley.