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What is Nonprofit Capacity Building?


In December, the Community Foundation announced $265,000 in grants to 32 local organizations in our Nonprofit Capacity Building grant round. So, what is nonprofit capacity building? It’s helping strengthen an organization’s core operations and build efficiencies in how they work. It was described to me once as “investing in a tree’s trunk, not its branches.”

We need to build the capacities of the agencies that serve us and our communities. That means that we have to be willing to support more than just programming. We need to invest in their infrastructure: things like upgrading their information systems, building a fundraising plan, or paying for staff development and program evaluation.

Too often, these initiatives are dismissed as “administrative costs.” We hear so many donors, even institutional funders, say that they don’t want to pay for administrative costs, they only want to support direct services. Yet these “costs” often improve the quality of a nonprofit’s programs and ultimately make them more effective at serving clients and fulfilling their mission.