Last Updated:

April 10, 2023

How to Build Capacity in Nonprofit Organizations


April 6, 2023

How to Build Capacity in Nonprofit Organizations

Whether you are building animal shelters in your local community or striving to stop deforestation efforts globally, every nonprofit organization seeks to make a positive impact in the world.

But in order to achieve these noble goals, your organization needs to be constantly adapting and improving its efforts, its resources, and its infrastructure through intentional capacity building.

But what is capacity building, and how exactly can nonprofits use it to improve their organizations? In this article, we’ll help you understand how to build capacity in nonprofit organizations so that you can improve your systems, invest in your future, and work toward making your mission a reality.

Winning Grants Together: A Blueprint for Nonprofit Team Success

Introduction to Nonprofit Capacity Building

Capacity Building

In the simplest terms, the goal of capacity building is to pursue strategies and invest in resources that will improve an organization’s workflow and output.

The process of capacity building involves examining your organization’s efforts on multiple levels to see what resources are missing and what systems can be improved. You can then invest in solutions that will not only address these blindspots, but will help your organization flourish.

At first, capacity building may seem to be just focused on short-term changes and solutions, but in reality, when done effectively, nonprofit capacity building can bring forth systematic improvements on both a micro and macro level. These changes, in turn, should maximize and optimize a nonprofit’s outputs when it comes to achieving their mission.

For example, let’s say your nonprofit is looking into applying for more grants in the coming year. You might then seek to invest in resources related to grant writing, such as subscribing to grant discovery platforms that will assist you in finding and researching new potential funders or even hiring a grant writing consultant.

Here are a few other examples of common ways you can build capacity at your nonprofit organization:

  • Improve volunteer recruitment by investing in training and outreach.
  • Foster better donor relationships by investing in donor management software.
  • Optimize email marketing outreach campaigns by investing in a CRM system.

That being said, one of the biggest challenges nonprofits face when trying to build capacity comes to finances. This is why many nonprofits also look into capacity building grants.

Nonprofit capacity building is all about ensuring your organization is performing to the best of its current ability. When done correctly and when guided by your mission, capacity building should create long-term systematic changes for the better on multiple administrative and structural levels.

Identifying and Assessing Capacity Needs


Now that you know what capacity building is and why it is so important for nonprofit organizations, it is time to discuss different methods you can use to gather and assess information about your nonprofit’s capacity needs.

Internal Self-Assessment

One of the ways you can assess your capacity needs is through an internal self-assessment.

Because an internal self-assessment requires minimal outside help and, generally speaking, a smaller budget, this can seem like the easiest and most financially sensible option.

However, in order to be done correctly, an internal self-assessment requires a level of honest and deep introspection that many are not used to, and the answers yielded by the process can be quite uncomfortable and difficult to accept.

Here are some examples of questions you can ask yourself when conducting an internal assessment:

  • What are our current objectives?
  • What is currently standing in the way of us meeting said objectives?
  • What do we need in order to overcome these obstacles?
  • What is it that we can do differently to improve our results?
  • What should we do the same?
  • What does success look like?
  • How does that differ from our current performance?
  • What are some ways we can bridge that gap?

The answers to these questions should help you determine what your current capacity is and where you need to grow.

The SWOT Analysis Method is another good tool to help assess your nonprofit’s current standing and capacity building needs.

By identifying your strengths and your weaknesses, you can see what needs reinforcement and what needs improvement. And by identifying opportunities and threats, you can more easily determine ways you can grow and what challenges you can expect to face.

If you have a business plan, it would be useful to use it during this internal assessment as well. Looking at where you were when you started, what strategies helped you grow to where you are, and what plans you had set for your organization in the past can help you discover how to most naturally build capacity.

External Assessments

Sometimes, an outsider’s perspective can be incredibly useful in identifying strengths and weaknesses that you would otherwise overlook or take for granted.

It is so easy to grow accustomed to doing things a certain way that it might never occur to you that there even are other methods available, much less that those methods could be better suited for your work. This is what makes an external assessment so helpful.

Nonprofit consultants can be incredibly helpful in offering that outsider’s view and perspective when it comes to your organization’s capacity needs.

By looking at things like your fundraising methods, your donor-relationships, your leadership management strategies, and more with an unbiased perspective, a consultant will be able to identify ways your organization can improve its efforts and outputs.

However, nonprofit consultants can also be quite expensive, and if your budget is already tight, it might not be feasible for your organization.

For those who perhaps cannot pay for an expert at the moment, state associations and other forms of nonprofit network alliances can be an incredible resource. These groups tend to be focused on providing educational resources to nonprofits so that they can thrive. Through workshops, webinars, and other opportunities, you can see what is possible for nonprofits like yours to achieve.

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Strategies for Building Capacity in Nonprofit Organizations


Now that you know how to identify and assess your nonprofit’s capacity, it is time to discuss some strategies for building it.

Invest in Recruitment and Training Efforts

No nonprofit is successful due to the efforts of one single individual. For a nonprofit to thrive, everyone from volunteers to board members must be invested in advancing the mission of the organization.

If possible, consider investing in recruitment and training efforts. If you’re not sure where to begin, reach out to your staff, your volunteers, and your board members and ask them for their opinions and views. By listening to their honest responses, you can better identify problems and properly address those needs.

Your capacity building strategies should take into consideration how your nonprofit operates, the roles of each individual, and how their work impacts your mission. Ask yourself how you can better optimize your training efforts so that the work of everyone within your organization is maximized for impact and efficiency.

Pursue Partnerships

Partnerships are a great way to not only increase your fundraising efforts, but to increase your nonprofit’s reach.

For example, the money received from a corporate partnership can help you invest in the resources required for capacity building.

Furthermore, working together with a large company, a local business, or another nonprofit can also help your nonprofit become known to people outside of your immediate community.

Needless to say, finding organizations whose values align with yours to partner with will yield the best results.

Create Realistic Milestones to Sustain Long Term Growth

When building capacity, it is natural to start by dreaming big. However, try not to run away with your visionary goals.

By managing your expectations, not only do you prevent potential disappointment, you also get a better perspective of how your nonprofit is really doing. Remember that steady and slow will almost always lead to more realistic long-term and sustainable growth.

Similarly, don’t try not to bite off more than you can chew. It is better to do fewer capacity building things and do them well than to try to do too many things and not be able to give each of them the attention they deserve.

Set out milestones that are achievable and focused on long-term growth. While at first it may feel like you are dreaming too small or not working toward your full potential, creating realistic goals will help keep you motivated and sustain your expansion long term.

Invest in New Tools and Resources

Finally, consider investing in new tools and resources.

This can look like acquiring new technology for your nonprofit, expanding or renovating your facilities, or subscribing to platforms that optimize your workflow.

This may be a little bit harder if your nonprofit is facing financial limitations. As we said before, tight budgets are perhaps the biggest obstacle that nonprofits face when building capacity.

If investing in new tools and resources is not on the table right now, consider adjusting your budget so that you can acquire those resources in the near future. Remember that just because something is not attainable now, it doesn’t mean it will remain that way forever.

However, also keep in mind that investing in the right tools and resources can in some cases actually help you save money for your nonprofit and can even help you raise more funds. For example, a subscription to Instrumentl can help you find and apply to more grants faster and more efficiently, allowing you to more easily secure funding to advance your mission.

Wrapping Up: The Next Steps


When running a nonprofit organization, it is important to take your time to assess your current situation so you can see how changes will bring about growth and improvement.

While intimidating at first, capacity building can yield great results for your nonprofit. This article hopefully provided you with some of the strategies you need to get started on this exciting process.

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