Grantee Capacity Building: First, Do No Harm

Strong grantees and their talented leaders are the engines that power the success of foundations. This is true of small and large foundations alike.

During Exponent Philanthropy’s (then Association of Small Foundations’) 2012 National Conference session titled “Capacity Building, Stronger Nonprofits, Improved Outcomes,” TCC Group’s Paul Connelly led a panel of leaders from the Leighty Foundation, Arbor Brothers, and Row New York in exploring approaches to strengthening the organizational capabilities of grantees.

“Capacity building”—an abstract term with countless definitions—typically embraces efforts to improve the leadership, management, strategies, or systems of nonprofit organizations. When done well, it typically leads to higher levels of nonprofit performance and a better chance that the beneficiaries of nonprofits’ work reap improved results.

Foundations of all stripes can support improving the capacity of nonprofit organizations in myriad ways.

These include providing grantees with general operating support, which grantee leaders can, by definition, use to invest in their organizations as they see fit. Some funders also provide capacity building grants that enable grantees to hire consultants—for instance a strategic planning consultant, board governance expert, or leadership coach—to support further development of the organization. Still other funders sponsor training or peer learning networks for cohorts of grantees that provide nonprofits space to network and work through common challenges.

One subset of funders takes a high-engagement approach, offering foundation staff to provide extensive technical assistance. Panelist Sammy Politziner, of Arbor Brothers, shared his foundation’s hands-on work with grantees, including Row New York, which is emblematic of this approach: Row New York received $65,000 in operating support paired with 250 hours of follow-on direct technical assistance.

In deciding what type of capacity building to offer, funders would do well to heed a warning echoed by some session attendees: Do not assume that you know what type of support a nonprofit needs.

For instance, panelist Amanda Kraus, executive director of Row New York, both welcomed and valued Arbor Brothers’ extensive direct technical assistance. Yet she cautioned funders to keep in mind that an executive director often will, not surprisingly, say to a funder—why yes, of course I’d welcome your capacity building assistance “gift.” (Meaning, “I appreciate that about as much as that kaleidoscope-colored holiday sweater from my mother-in-law.”)

The inescapable difference in power between funders and resourced-strapped nonprofits is at least partially responsible for this don’t-look-a-gift-horse-in-the-mouth dynamic. Regrettably, some of us know stories of well-intentioned funder-sponsored initiatives to build capacity—including a couple funded by the Hewlett Foundation on my watch—that proved a waste of valuable resources and, just as worrisome, a distraction to nonprofit leaders.

How, then, do funders increase the chances that support for capacity-building for our grantees will be successful?

A useful starting point is simply to acknowledge in conversations with grantees that organizational challenges are common and ongoing for virtually all organizations—including the highest performing. To nurture a supportive dialogue with grantees, ask open-ended questions to grantee leaders.

A wise foundation leader in the room suggested asking executive directors “what keeps you up at night?” Alternatively, questions like, “What type of operational support do you need to achieve your mission?” or even, “How can we best help” can invite candor. Trust between a grantee and funder—something hard to earn but easy to lose—is the secret sauce of many successes in building capacity.

In addition to minding the Hippocratic Oath of “First, Do No Harm,” other tips for funders interested in supporting nonprofit capacity included:

• Keep focused on a nonprofit’s mission. Since building capacity, while critically important, is only a means to the larger end of nonprofit mission achievement, carefully consider “capacity building for what?”
• Screen for readiness. The enthusiasm of grantees to embark on capacity building is critical for success. Look for genuine commitment to the work on the part of  board and senior staff  and an openness to change based on the work.
• Commit for the long haul. Capacity building often takes steadfast patience and multiple years to show results. It’s work that is, more often than not, on top of nonprofit leaders’ day-to-day activities; as a result, capacity building projects are often the first thing to go in the face of pressures on budget or staff time.
• Customize assistance based on a grantee’s unique needs. A one size fits all approach to capacity building generally does not work.
• Build on a nonprofit’s strengths. Above all, remember that grantees are not broken or in need of being “fixed” by funders. Grantees build their own capacity without funders’ assistance all the time. Nonprofit leaders frequently know—or at least have hunches about—where they most need support. Shine a light on a grantee’s strengths so they can be built upon.

In addition to offering these and other tips, conference session participants seemed to agree that support for capacity building can be one of the highest value investments that foundations can make to amplify their grantees’ success.

Jennifer Ratay, who previously worked for a grantee of The William and Flora Hewlett Foundation, now directs the Foundation’s Organizational Effectiveness grantmaking program. In her role, she partners with program staff and grantees across the Foundation’s education, environment, global development and population, philanthropy, and performing arts programs to build resilient, high-performing grantee organizations. She joined ASF’s conference in the belief that large funders, such as the Hewlett Foundation, can learn and benefit from the insights and experiences of small foundations, including in the area of nonprofit capacity building.