How to Build Your Nonprofit's Capacity: A Practical Guide

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April 6, 2023

Last Updated:

May 13, 2024

Is capacity building the key to years of sustainability and growth for your nonprofit? It just may be!

Nonprofit capacity building can significantly boost your nonprofit organization’s impact and provide you with the tools, skills, and experience to thrive over the long term. In this article, we will walk you through step by step how to strategically build your nonprofit’s capacity and set your organization up for many years of success.

Let’s get started!

Winning Grants Together: A Blueprint for Nonprofit Team Success

Step 1: Familiarize Yourself With Capacity Building

So what exactly is capacity building, anyway?

At its core, nonprofit capacity building is all about planning for the future and ensuring sustainability.

In her webinar, Unlocking Opportunities: 5 Tips for Discovering Capacity Building Grants, Sheleia Phillips, Founder & Principal Consultant, SMP Nonprofit Consulting, defines capacity building this way:

“Investments that assist nonprofits in developing specific competencies, strategies, systems, and overall structures to help the organization grow and increase effectiveness.”

Capacity building can take many forms but is typically categorized into two key areas:

  • Individual Capacity Building: This relates to actionable steps taken by a staff member or other individual nonprofit stakeholder to invest in their professional development and competencies. This is often in the form of training, seminars, professional certifications, or degrees that will enhance the individual’s performance.
  • Organizational Capacity Building: This refers to capacity building that enables the entire organization to effectively meet high level goals or objectives and further the nonprofit’s mission. Examples of this type of capacity building are supporting the initiation of a strategic plan, developing a marketing plan, or undergoing an organizational self-assessment. Commonly, organizations will hire consultants to provide insight and guidance into these complex projects to ensure their efficacy.

Understanding these capacity building categories will help you determine what types of investments will best support your nonprofit and how you can leverage the strategies below to improve your staff, your organization, and overall impact.

Step 2: Seek Capacity Building Assistance

So you have decided to begin some type of capacity building process. Where exactly do you begin?

Organizations who want to undertake capacity building projects often do not have the ability to carry out such initiatives all on their own with internal staff and existing stakeholders.

Fortunately, there are several ways to seek capacity building assistance, including:

  • Nonprofit consultants: Consultants are a commonly sought-after capacity building resource for nonprofits looking to grow their competencies. Consultants can provide direct support acting as another member of your team or provide guidance and training on how to develop your own internal fundraising capacity. Some consultants even specialize in capacity building!

Nonprofit consultants like Campbell & Company can support nonprofit organizations in countless ways including helping you find a best-fit executive director.
  • Web-based education: There are countless opportunities available online to help your nonprofit better carry out its mission. Instrumentl has its own library of free grant writing and management courses designed to support nonprofit professionals looking to enhance their fundraising or grants programs.
  • In-person training: Web-based professional development is becoming more and more common, but that does not mean that in-person training is out of the question. The Center for Excellence in Nonprofits offers courses both online and in-person to give students the opportunity to choose a learning style that works best for them.

The Center for Excellence in Nonprofits provides several in-person and online learning opportunities for nonprofit professionals.
  • Peer-to-peer cohorts: Peer-to-peer cohorts are training opportunities that facilitate group discussions to foster learning and innovation among participants. Organizations like eLearning Industry provide comprehensive resources and trainings on how to initiate peer cohorts and improve employee development. 
  • Communities of practice: Like peer-to-peer cohorts, communities of practice leverage professional networks to foster learning and increase effectiveness across their service areas. The Resilient Cities Network has designed communities of practice to work on building and strengthening resilience among vulnerable populations in urban areas. Use this as a guide to inform your own communities of practice across your own network.

The Resilient Cities network brings together urban practitioners who aim to build resilience of critical systems among vulnerable communities.

These are only a few ways your nonprofit can seek out knowledge and begin building more effective systems, processes, and practices at your organization.

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Step 3: Join Your State Association of Nonprofits

Cultivating partnerships and growing your network is one of the most effective ways to engage in nonprofit capacity building.

A report from the Stanford Social Innovation Review determined that nonprofits that effectively leverage their partnerships and foster a strong network are more effective than bigger, wealthier organizations that rely on internal capacity.

According to the report’s authors Jane Wei-Skillern & Sonia Marciano:

“By mobilizing resources outside their immediate control, networked nonprofits achieve their missions far more efficiently, effectively, and sustainably than they could have by working alone.”

Networking and developing strong relationships with other organizations will only benefit your nonprofit, but it can be a time-consuming and challenging endeavor. Where do you start? How do you begin to build your network?

This is where state and local nonprofit associations come in handy!

Statewide nonprofit associations are hubs for historical knowledge, industry best-practices, and expert guidance. Associations can connect you with people within the sector who have a wealth of experience to share.

Forefront, for example, is the state of Illinois’ official association representing nonprofits and grantmakers.

Forefront is the state of Illinois’ association for nonprofits and grantmakers.

You can review the National Council of Nonprofits directory to get connected with your state’s nonprofit association and start building your network.

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Step 4: Conduct a Self-assessment and Make a Plan

Once you have determined that you want to build capacity at your nonprofit, you will want to identify which areas of your organization require improvements or enhancements.

Conducting a nonprofit self-assessment can help you determine which are your organization’s strongest areas and what areas need work.

An assessment can be as simple or as in-depth as you would like, such as:

  • Utilizing free resources and tools online that walk you through organizational mapping
  • Providing organizational checklists
  • Hiring an outside expert or consultant to help you through the process

The William and Flora Hewlett Foundation offers a holistic guide for finding the best assessment tools to match your nonprofit’s needs.

The William and Flora Hewlett Foundation provides a comprehensive guide to capacity assessment tools to help get you started! From here you can identify if your organization needs third-party assistance or if you can manage this process on your own.

Step 5: Invest in Your People

At the heart of any great nonprofit are passionate staff, volunteers, and workers committed to the organization’s mission.

Investing in your staff, volunteers, and leaders’ professional development will improve your organization at every level. Building capacity among your staff through training, certification, or degree seeking is key to a strong organization!

There are variety of professional development opportunities for nonprofit professionals, including but not limited to:

  • Grant writing courses: Want to level up your grantseeking and start building out your grant portfolio? You can invest in grant writing courses for your nonprofit staff! There are a wide variety of grant writing courses available online including free grant writing courses from Instrumentl’s library of educational tools and resources.

Instrumentl has a massive collection of free grant writing, grant management, and nonprofit fundraising courses for you and your staff to access.
  • Workshops: For those who are interested in honing their skills further, workshops can offer nonprofit professionals in-depth learning targeting specific competencies. Staff can dive deep into topics that will support their growth and enhance your organization, such as this workshop from Sheleia Phillips on Capacity Building. Some workshops even offer education credits, such as the Nonprofit Management Online Workshop Series from Southern Illinois University.
  • Webinars: Webinars are a great way for your staff to gain crucial knowledge and build their skills in no time at all. Nonprofit associations and capacity building organizations of all kinds offer webinars across a multitude of subjects. The Association for Fundraising Professionals, for example, has a library of webinars and recordings and a subscription package to access future webinars offered by the organization.
  • Certifications: For nonprofit professionals who really want to elevate their skills, there are a number of certifications available including nonprofit management certificates, grant writing certificates, and finance certificates (among others). These learning opportunities support your staff’s professional development and lend them additional credibility as an expert in their specialization.

Many accredited Universities and Colleges like the University of Illinois at Chicago offer certificates in Nonprofit Management.

Pro Tip:Remember, your paid staff are not the only key people at your organization. Investing in opportunities for volunteers to learn and grow their skills can strengthen your volunteer base and increase the effectiveness of your volunteer workers.

Step 6: Invest in Your Software

Investing in software is key to building organizational capacity at your nonprofit organization.

Having up-to-date, high-quality technology and software will help ease your workflows and increase efficiency. It can also keep your nonprofit competitive in a world that increasingly relies on the use of technology to achieve success across any sector.

Nonprofits can invest in software that supports:

You can learn more about the types of software available to nonprofit organizations by reviewing the following article from Instrumentl: The Best Grant Management Software for Nonprofits.

Step 7: Find Funding for Your Capacity Building Needs

It should be clear by now that capacity building is key to a nonprofit organization’s long-term success. However, depending on the level of effort required for the specific activity, capacity building can be quite expensive.

So how do nonprofits pay for these initiatives? Through capacity building grants!

Capacity building grants are vital to ensuring your nonprofit is financially positioned to sustain its operations and increase its effectiveness.

With Instrumentl’s smart matching software, you can filter your grant research by grant type to zero in on capacity grants that are well aligned with your organization’s mission and values. We even created this comprehensive guide to show you exactly how: Where To Find Capacity Building Grants For Your Nonprofit.

Start a 14-day free trial with Instrumentl to begin your search for capacity building grants today!

Step 8: Review and Adapt

For the greatest impactful, capacity building should be an iterative process, changing and evolving with industry best practices and with the needs of your organization and the community it serves.

Once your organization has undergone some type of capacity building, take a moment to reflect and ask:

  • What type of capacity building had the greatest impact?
  • What resources were most effective?
  • What kind of feedback did you receive from staff and did these initiatives help them (if at all)?

Asking some of these key questions will help you determine if the types of capacity building initiatives you engaged in were helpful and how to change your capacity building strategies for the greatest impact.

Wrapping Up

Capacity building is absolutely critical to a nonprofit’s long-term success. With the right strategies, you can affordably build capacity at your organization that will drive sustainability and growth for years to come.

To find best-fit capacity building grant opportunities, look no further than Instrumentl! Start a 14-day free trial today and learn how Instrumentl can help you secure the funding your organization needs.

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Instrumentl team

Instrumentl is the all-in-one grant management tool for nonprofits and consultants who want to find and win more grants without the stress of juggling grant work through disparate tools and sticky notes.

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