Foundation News & Commentary

September/October 2005
Vol. 46, No. 5
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Cover Story

Funder's Little Shop of Horrors

Misguided Attempts at Nonprofit Capacity Building

man-eating plant in shop windowAlthough the trend toward grantmaker support of nonprofit capacity building is growing, it is hardly new. For the past several decades, foundations and corporations have shown interest in providing support to strengthen the internal operations of nonprofit organizations. For example, funding has been earmarked for retooling organizational systems; enhancing management and infrastructure; and providing a broad array of technical assistance in technology, evaluation, marketing and fund development.

Promoting organizational effectiveness, it is argued, will result in significant benefits for nonprofits and their constituencies, such as more efficient delivery of services, improved quality and accountability, adaptability to changing demographics and community needs, and future sustainability of services through solid governance and diversified fundraising. Such grants can foster lasting, deep-seated impact.

The 1990s saw a marked upturn of funders' interest in investing in nonprofit capacity building. Between 1989 and 2002, there was a 125 percent increase in funds allocated to those projects. A database maintained by the Human Interaction Research Institute lists 249 grantmakers that sponsor 332 programs specifically devoted to capacity-building assistance.

Such efforts vary in focus and scope, from grants to individual organizations to develop a strategic plan or hire a development director to regional and national initiatives that seek to strengthen a cohort of organizations serving similar populations or issues.

Clearly, such support is needed by nonprofits and the desire on the part of program officers and foundation boards to be of greatest help is genuine. However, despite the best of intentions, many nonprofit organizations have experienced misguided efforts by funders that have created unnecessary stress and burdens and lessened benefits.

This article presents a series of case studies based on confidential interviews with nonprofit leaders and consultants across the United States. Unfortunately, funders rarely receive honest feedback, constructive criticism or detailed input because crucial funding and ongoing supportive relationships are at stake for the nonprofits. Anonymity enabled the informants to speak with great candor. Each case study is a composite of several interviews. The names of individuals, as well as details about the organizations, have been changed to protect their true identities.

The case studies describe how funders' actions can cause technical assistance efforts to go awry and thereby produce unintended negative consequences. Each one identifies the specific actions that lead to counterproductive or corrosive outcomes. In addition, practical suggestions are provided to demonstrate alternative strategies that can create positive and lasting benefits. Together, the lessons learned from the case studies could become best practices for implementing successful capacity-building efforts.

THE CASE STUDIES

Dr. Frankenstein and his creationFrankenstein

When a funder tries to invent a new program, and ends up creating a monster.

The foundation wanted to tackle entrenched poverty and its effects on children. It began with an ambitious vision of a community-wide, multiyear partnership involving grassroots nonprofits in the hopes that together they could achieve substantial impact on a specific underserved region. The foundation approached community-based organizations (many of them small, some volunteer-led) that were already providing services in the neighborhood. It invited them to join forces in designing a major capacity-building project, with the promise that each nonprofit would receive funding to deliver programs and strengthen their organizations.

The foundation asked a large social service nonprofit in the area to be the fiscal receiver and to coordinate the project, hoping to create objectivity and autonomy and diminish competition among the other organizations. Although the large nonprofit had no previous relationship with the community-based organizations, it had a strong working relationship with the foundation based on numerous past grants.

Annette is the executive director of a community-based organization sought out by the foundation. "At the onset, we were a fledgling organization and were working with young children in the neighborhood," she explains. "We were told by the foundation that the community was to be involved in developing the new programs and, in addition, we could help determine the process by which funds would be awarded. Our organization was excited by the prospect of receiving additional resources to expand our services and build our organizational infrastructure. We knew many of the other nonprofits and looked forward to working closely with them to learn from their experiences and to accomplish more than we could do independently."

The organizations convened a community focus group to get broad-based input from other groups and community leaders. This evolved into a community steering committee. "We had meetings and retreats; we had subcommittees. We were energized," Annette says.

Imagine their surprise when they learned that the foundation and the fiscal receiver had developed their own framework for the program. The foundation's plan called for the purchase of a building to be run by the fiscal receiver. It would house a number of the groups, even though the location was on the fringe of the targeted neighborhood and at a distance from most of the groups' current sites. "The controversy generated by this resulted in a major diversion of the community's energies," Annette laments.

Next, the fiscal receiver announced a request for proposals (RFP) requiring organizations to apply for funding, even though the community steering committee had recommended that the process not be overtly competitive. The RFP was open to everyone, not limited to groups based in the neighborhood and "it did not prioritize community-based organizations that needed an investment to be able to grow, which we thought was the original intention of the effort," according to Annette.

Organizations were also asked to conform to a particular program model, rather than build on their diverse approaches and strengths. "They threatened us," Annette says plainly. "The funding was substantial, but if an organization wanted to get it, they needed to follow the foundation's prescriptions."

Once the first round of funding was determined, the original community steering committee was dismantled and a new group was created, representing those organizations that had received grants. "The fiscal receiver tried to create a governance structure that made grant recipients responsible for the program and the facility," Annette says, "but it had the real power. What would our role be when the second round of grants were awarded if some of us didn't get funding?"

At one point, the foundation decided to hire a program coordinator at each site. "Who would pay their salaries after the initiative? Whom did these coordinators work for?" Annette asks rhetorically. "The foundation and the fiscal receiver wanted to be able to control us."

A few years into the initiative, the foundation shifted to a highly academic focus and mandated rigorous evaluation and student testing. Groups that had been providing enrichment, athletic and career development were asked to switch gears or be dropped from the program. Annette's organization and others could no longer meet the eligibility requirements without technical assistance.

"There was never any emphasis on how the organizations could build themselves," Annette says. "We were supposed to receive help, but we ended up serving the funder's needs. The ones who gave the most received the least."

Annette's organization did not fare badly. "I always kept my eye on how to sustain the expanded programs; we sought outside funding and continued other activities. We planned for the time when this initiative would go away." But some organizations grew dependent on the funding from this single source. "Now that it's ending, they are desperate and some are forced to cancel programs or change them to attract new support."

Another unfortunate outcome is that few alliances were built among the organizations. "The competitive RFP process made it harder to build cooperation and the struggles with the foundation pitted groups against each other," Annette says. "Even though we all serve the same neighborhood, the result of this initiative is that the groups have greater distrust of one another instead of greater cohesion."

Despite the hardships, Annette is grateful for the experience. "It gave us a vision of how to develop stronger programs if we had sufficient funds." She also learned that "not all money is 'good' money. It's important to find the right match when looking for a funder, so you don't become entrapped in incompatible values and expectations."


Key problem areas in the case study

  • Confusing program development with organizational capacity building.    
  • Disturbing the community ecosystem rather than building on its strengths.    
  • Using an inappropriate intermediary aligned with the funder who serves as a gatekeeper.    
  • Stirring competition, instead of cooperation, among the groups.    
  • Emphasizing facilities that drain financial resources and attention.    
  • Creating false expectations; reneging on early promises.    
  • Controlling from the top-down—not listening to or learning from the community.

Alternative strategies that could lead to successful capacity building

  • Involve the community in defining needs and developing a program to address them. The experience of organizations already engaged with the problem should be respected and incorporated.    
  • Use intermediaries with caution. If necessary, seek the input of the organizations to be served. Look for a solid track record of collaboration with and support of the targeted constituencies.    
  • Make the health of participating organizations paramount in capacity-building projects. Consider the specific needs of each organization and assist them to build the infrastructure to carry out the program and plan for its long-term sustainability.    
  • If multiple organizations are involved, help them to develop a meaningful partnership to encourage enduring cooperation, collaboration and peer exchange.

Mr. Hyde slipping into the community cultural center in the darkDr. Jekyll and Mr. Hyde

When a funder changes its priorities, the offer of funding can be coupled with dreadful manipulation.

John is the executive director of a community cultural center. One day, he was approached by a program officer of a major foundation with whom he had had limited experience. "She invited us to apply for $250,000 over three years to strengthen our fundraising methods. We were overjoyed!"

The center was in the midst of strategic planning. The goals focused on developing its board, deepening program excellence, addressing deferred maintenance and diversifying sectors of support. The board was keenly interested in adopting a stronger role in fundraising and recruiting new members. The center's development director was excellent with special events, but they needed a new staff member to increase contributions from major donors and foundations. "Professionalizing the way we raise funds was a central goal in our strategic plan, and it is pivotal to achieving our vision in program and facilities growth. We were well poised for change and the foundation offered the assistance that could enable us to move forward quickly," John recounted. After meeting with the board and the program officer, John developed the grant proposal, concentrating on objectives that could bring the center to a new level.

Midway through the proposal review process, the foundation's program officer left. John got a call from the new program officer, alerting him that the foundation was shifting its priorities. She counseled him that his proposal would be more competitive if it focused on marketing and audience development. She suggested that this would help the center increase income from admissions, a comparable goal to what he outlined in his original proposal.

John had to pull together the new project quickly to retain the possibility of getting the grant. "There was no time to thoughtfully plan. The board was stunned. Since we have a strong profile in the community, audience development was not a major emphasis in our strategic plan." The program officer offered to read drafts of his proposal, suggesting a communications and marketing strategy based on the foundation's work with other nonprofits.

Several months later, the foundation awarded the $250,000 three-year grant. "The carrot was offered and it was difficult to turn down. We figured we could always do something, although perhaps not all that the funder was hoping for," John confides.

The center hired two new staff members, one in marketing and public relations and another in membership development and special events. It held a series of focus groups and is attempting to re-energize a number of community advisory panels. John also hired consultants to help create an audience development plan and develop special programs to reach new constituencies.

"Many of the ideas are good, but most of the suggestions are more taxing than we have the staff and resources to implement. We have such limited funding to launch new programs," John admits. Marketing and audience expansion, although important, were not areas in which the center was prepared to build capacity at that time. "It is a huge thing added to our plate. And it is taking us further and further afield from the priorities outlined in our strategic plan."

There is no plan for maintaining the two staff positions once the grant is completed. "Whatever happens," John notes, "we will claim it's a great success, because we would like to continue to receive the support of this funder. We hope to develop a good enough relationship so that next time we can get what we need."


Key problem areas in the case study

  • Experiencing a lack of continuity when the funder's program staff changes.    
  • Controlling from the top-down: the funder has a capacity-building strategy within which all grantees must fit.    
  • Identifying priorities without seeking the buy-in of the organization's leadership, which undermines the board's and staff's role in planning and managing.    
  • Relying on a grant size that almost guarantees the effort will not be sustainable.    
  • Failing to foster honest communication between the funder and the organization.

Alternative strategies that could lead to successful capacity building

  • When an institution has undergone a credible process to identify its needs, support those goals and provide resources and guidance to achieve them.    
  • Consider the needs of each organization specifically; a one-size-fits-all approach rarely works.    
  • Honor projects and plans already under way if funder's staff changes; introduce changes gradually, coordinating with grantees.    
  • Create an atmosphere of partnership in which grantees are encouraged to be honest about their needs. Recognize the courage that it takes to counter a funding source and view challenging ideas as opportunities to serve grantees' needs.

Dracula with a lengthy list of requirementsDracula

Too many funder-driven requirements can drain the lifeblood of an organization.

Carmen founded a grassroots organization providing educational programs for disadvantaged children and their parents. The organization puts the majority of its funding into programs, so as the executive director, she has been juggling administration, fundraising and community involvement. Her workday goes from early morning until very late at night, nearly seven days a week.

Carmen received a small grant from a local foundation to hire a consultant, and together they garnered increased foundation and corporate funding to strengthen the nonprofit's services. They also identified a foundation that supported organizational capacity building and the consultant helped write a grant for board development and launch an expanded fundraising program.

When the foundation awarded a twoyear grant for capacity building, Carmen was jubilant. However, the program officer had definite ideas about how the grant was to be carried out. He asserted that Carmen should go through a competitive process to identify a consultant, although Carmen felt the consultant she had was well qualified and knew the organization. "The program officer was very intrusive. He tried to undermine my relationship with our consultant and would have pressured me to undertake a time-consuming selection process for an alternate," Carmen reported. "I resisted this, but bent over backwards to keep in his good graces."

The program officer requested that the organization submit quarterly reports about the technical assistance project. "I know the program officer wanted to keep in touch with our challenges as well as our successes, but the frequency of the reporting was a great burden on me," says Carmen. "I already had many added activities—meeting with potential board members, keeping current board members excited, working with the consultant on a board retreat and following up with board members about their new role in fundraising."

In addition, Carmen felt that "three months between reports isn't enough to get distance and discuss real changes." She also worried about the repercussions if the reports raised red flags, so she invested time in ensuring the reports gave the foundation an accurate and detailed picture of what was happening.

Six months into the grant, Carmen received an invitation from the program officer to attend a special meeting of the foundation's grantees serving children and their families. She then learned that the program officer was launching a "peer-learning community" and that she would be asked to attend six meetings a year with 15 other organizations.

Each of the proposed meetings would focus on a different topic related to capacity building. At first, Carmen thought this might be valuable. However, she discovered that for each session, she needed to assemble a variety of documents and draft a related homework assignment. In addition, the grantees were asked to rotate hosting the meetings.

All of the grantees were small, underfunded and understaffed and, like her, struggling to find enough hours in the day to serve their clients and build their internal capabilities. While Carmen and the other directors might see benefits from a peer-learning community, none had time or energy to devote to it.

To make matters worse, the program officer facilitated each of the learning community sessions (although sometimes inviting outside experts to join him). He was very enthusiastic and hoped that the organizations would develop mutually supportive relationships. He encouraged them to share current challenges and to offer input and resources to help each other find solutions. Instead, Carmen admits, "The executive directors managed their images in front of him . . . Our discussions were focused on building a good relationship with him rather than developing trust and rapport with each other."

Carmen is grateful for the grant that enabled her to continue the valuable work with the consultant, expand the board and increase fundraising. Yet, she was so exhausted that she worried for her own well-being. "I had hoped a capacity-building grant would help the organization move forward and become stronger," she says, "but it required so much extra work, it nearly sunk us."


Key problem areas in the case study

  • Trying to control the process and undermine relationships that were already working well for the organization.    
  • Placing burdens on staff already stretched thin with excessive reporting demands.    
  • Diverting attention from the capacity-building projects, because the peer-learning community required substantial preparation.    
  • Constraining peer learning through the funder's constant presence.

Alternative strategies that could lead to successful capacity building

  • Honor existing relationships between organizations and their advisors. If there is concern about quality or capabilities, learn more about the consultant by asking for his or her bio and meet as part of the proposal review.    
  • Consider the staff time required to carry out a capacity-building project. Consider funding additional support staff to carry out daily duties while managers focus on capacity building or extend the project's timeline. Don't push an organization beyond its capacity to foster capacity.    
  • Balance the need to monitor the process by recognizing the additional burden of preparing reports. Even if the funder states that interim reports should be brief, the grantee will feel pressure to make them polished and comprehensive. Allow six to 12 months between reports; quarterly reports are rarely revealing or beneficial. Consider other methods to check in, such as mid-grant phone calls.    
  • Allow the groups to meet without the funder present to encourage real candor and meaningful sharing of experiences if peer learning or peer coaching is part of the process. Consider hiring a facilitator or consultant to conduct the sessions.    
  • Design peer-learning activities that require little or no extra work for the grantees. Consider holding them after the grant period to extend the capacity-building process and enable groups to support each other as they seek to institutionalize their efforts.

When Worlds Collide

Effective strategies for one cultural group can translate into disaster for another.

Jordan heads an economic development and social service organization with a 40-year track record of serving an innercity African American community. The organization has received substantial support from a variety of government agencies and private foundations over the years, but has never adopted the models that most funders believe necessary to create a successful and sustainable organization.

One day, Jordan opened the mail and discovered that his organization had been accepted into a capacity-building initiative organized by a major regional foundation. In two weeks, a consultant would be coming to conduct a comprehensive assessment of the organization's needs. The letter asked that he have a number of documents ready for the consultant's visit. Although initially aghast that the foundation would set this up without his knowledge or agreement, Jordan hoped that it might ultimately benefit the organization.

The consultant was seasoned and well connected, although she had little experience in the specific neighborhood or with African American organizations. At the meeting, she asked probing questions and appeared attentive when Jordan described the organization's significant financial duress because of government cutbacks and high demand for services. The consultant asked to interview key board members. She subsequently wrote an extensive report that included sharp criticism of the organization in numerous areas. Jordan and the board were dumbfounded and felt betrayed for their openness in discussing the organization's weaknesses and challenges.

The foundation program officer, to whom the consultant reported, believed the time was right to move the organization toward a more professional structure and provided a $150,000 grant to support this capacity building. He hinted that a larger program grant might be made upon successful completion of this project. The funder established clear objectives for the organization and identified benchmarks to be accomplished during the grant period.

The first step was hiring a development director. Jordan was told that field norms suggested offering a $75,000 salary to recruit someone top-notch. This was considerably more than the salaries of other longtime program staff members. He was troubled by the potential impact on staff morale and raised those concerns to the consultant.

The other half of the grant underwrote continuing work with the consultant. She was to lead a multisession training program for the board and staff management that was accompanied by a three-ring binder of readings and resources. At the first session, board members said that they wanted to tackle fundraising as a top organizational priority, but they noticed it was not scheduled until the sixth session. They were worried that they needed to get started immediately. Some said that they didn't need the standard board training that was outlined, but a customized approach that would help them use their networks to approach wealthy people in the African American community. The consultant resisted, saying that it was critical that they receive the overall training before diving into fundraising.

"The board members had deep roots and reputations within the community," said Jordan. "Their expertise and leadership wasn't being acknowledged. The consultant's thinking was proforma; she couldn't get out of her own box. There was a polite façade in our interactions, but real trust and confidence did not exist."

Furthermore, the consultant directly questioned the number of people on the board and staff that had family ties. According to Jordan, "She implied that this was a form of nepotism. She did not understand that the extended and intergenerational family relationships threaded through the organization lent stability, reinforced commitment and could be an asset to build upon. She could not see beyond her own cultural lens."

Jordan believes the consultant was not the best person to assist the organization in strengthening its fundraising. "There wasn't the awareness of the wealth or capabilities within the African American community and how to access it. Our fundraising goals were certainly reachable; we just needed someone knowledgeable to guide us through the process."

The consultant reported directly to the funder; the organization had no formal supervisory role over her work. Jordan stated, "It was clear that the foundation and the consultant were closely allied in their thinking and that they were growing increasingly frustrated at what they perceived was our resistance to good management practices."

As a result, the program officer began talking to other funders, encouraging them to exert pressure on the organization to make structural changes. "Increasingly," Jordan said, "the foundation took on the role of angry parent, telling us to 'do this or else.'"

Relationships became strained. The consultant became ill and the training program was curtailed. No new consultant was retained by the foundation to work with the organization and no subsequent program grant was allocated.

"In the end, we are pleased to have the development director on our staff, but a lot of time and momentum have been lost in developing a successful fundraising campaign with the board," Jordan stated. "Some board members dropped out, and we are nearly back to square one in terms of financial insecurities."


Key problem areas in the case study

  • Conferring a capacity-building grant on an organization "for its own good" without consulting it.    
  • Focusing only on the organization's deficits and failing to acknowledge its strengths.    
  • Imposing objectives, solutions and benchmarks without getting buy-in from the organization's leadership.    
  • Being ignorant of the beliefs, norms and methods of social organization in an ethnic or cultural community.    
  • Having the consultant report to the funder instead of to the organization.    
  • Promising core support as an incentive, but not following through with this commitment.    
  • Engaging in inappropriate coercion by contacting other funders and discussing confidential information about the organization.

Alternative strategies that could lead to successful capacity building

  • Ensure that an organization is fully invested in a capacity-building effort. If the staff and board feel coerced or that the effort is unnecessary, they will not have the desire or fortitude to change.    
  • Become familiar with the cultural and social norms within different communities.    
  • Consider providing core operating or programmatic support simultaneously to relieve the stress of financial challenges, demonstrate good faith and enable the organization to focus on long-term change.    
  • Give organizations a say in hiring consultants to ensure a good match.    
  • Give grantees a role in supervising consultants to ensure that consultants are accountable primarily to their needs and goals. The organization should be perceived as the client, not the foundation.    
  • Avoid cookie cutter approaches and enable organizations to customize solutions that build on their strengths.

tiny man knocking on foundation's front doorThe Incredible Shrinking Man

Capacity-building funding can beef up an organizational budget to an unsustainable size.

An important trend in capacity building is for larger foundations or groups of funders to create initiatives that support the growth of new or small foundations. Gloria directs a burgeoning community foundation in a region with a rapidly increasing and diversifying population. Her foundation's board wanted to expand its grantmaking resources and applied to one such initiative sponsored by a major national foundation. It received a significant, multiyear capacity-building grant.

Gloria says, "The grant energized us. More than 75 percent of the funding we received was designated for re-granting over a three-year period. This had an important impact on the organizations we serve. We were able to get thousands of dollars out into the community to address pressing needs."

The sponsoring foundation had strong opinions about how the small community foundation could raise its profile and credibility. It urged the community foundation to move its offices from modest, donated space to a more visible location in the downtown of the county seat. It suggested hiring a marketing firm to develop promotional materials; an interactive website to make the community foundation more accessible to nonprofit organizations; and an annual report to distribute to prospective donors, regional policymakers and community leaders.

The board embraced these recommendations. With grant funds, the community foundation hosted meetings with the local and regional media, as well as focus groups to encourage community input to shape future grantmaking. Several new program areas were launched in response to suggestions. The sponsoring foundation was gratified with these developments. Gloria admits, "We began to believe in the vision of becoming a large foundation. The initiative's funding enabled us to hire a new program officer, design new programs and award significantly more grants."

Given the limited pool of regional funding available, however, replacing the regranting revenues was not easy, especially because the expectation was to sustain the increased grants budget by building a bigger endowment. "Our region has large pockets of economically disadvantaged communities and it doesn't have a well-developed tradition of philanthropy," Gloria recounted. "There are some highly visible major donors, but we would be directly competing with the nonprofits we serve if we approached them for major funding to sustain the grants budget.

"The foundation's initiative allowed us to increase our grantmaking for a while, but it did not provide us with tools or skills to increase our revenue-generating capabilities," she continued. "Marketing and visibility are important, but they are not the same as fundraising. We were pushed to spend too much money on superficial elements and not enough on core ingredients for long-term growth."

Gloria adds, "The board grew complacent . . . [believing] that the things that the initiative had funded were the result of internal changes in the way that the community foundation operated. They thought of themselves as heading a powerful, large foundation. We simply weren't doing sufficient fundraising to sustain the bloated expenditures. When the grant was over, there was no way we could maintain the level of staffing and the large grants budget. It was a very difficult transition when we had to shrink our office space, cut several special programs and let staff go."

In retrospect, Gloria believes that the sponsoring foundation could have played a more powerful role in concentrating capacity building on fundraising. "Our board was underdeveloped from the start. The members were not comfortable with fundraising responsibilities, and they didn't know how to access their networks to garner big gifts." The sponsoring foundation thought that raising visibility and community involvement would enable the community foundation to increase its donor base, but it needed more direct assistance. Gloria adds, "We needed a consultant to provide training in planned giving and to help us learn how to do major donor fundraising and perhaps the foundation should have required the board to match the funds it awarded. It was wonderful while it lasted, but it was not sustainable."

The community foundation also had to cope with the heightened expectations of the region's nonprofit community that had grown used to the foundation's expanded grantmaking capability. Gloria stated, "When the community foundation reduced its level of grantmaking the year after the initiative ended, it had a chilling ripple effect and led to cutbacks among a number of local nonprofits."


Key problem areas in the case study

  • Encouraging the grantee to radically expand programming and operations without attention to sustaining that growth.    
  • Attempting to transfer perspectives and methods from one setting to another without adequate analysis of whether they are appropriate or will be successful.    
  • Confusing marketing with a development strategy.    
  • Creating a grant period that is too short to ensure capacity building in multiple functional areas (e.g., program expansion, internal management enhancement, increased community visibility and re-engineered and expanded fundraising).

Alternative strategies that could lead to successful capacity building

  • Encourage grantees to grow incrementally and not extend beyond their own capacity to sustain their growth.    
  • Be realistic about the time needed to develop sustainability. Consider multiple phases of grantmaking: the first to design and launch new efforts or systems and the second (and third) to assist in institutionalizing the effort.    
  • Provide complementary resources of program funding and funding for infrastructure and resource generation.    
  • Require matching for a portion of a capacity-building grant, so that the organization can leverage the funder's investment.

How To Avoid The Little Shop Of Horrors

Grantees interviewed for this article—as well as those who participated in the many conversations that formed the background for it—asserted that support for capacity building is vital to building strong and sustainable organizations in the nonprofit sector and to meeting the increasing needs and challenges of providing services.

Funders have enormous potential to have a lasting impact on the quality, effectiveness and long-term availability of services by strengthening their grantees' organizations from the inside out. However, it requires enormous sensitivity and cooperation with the nonprofit organizations themselves.

Grantees look to funders for support in overcoming entrenched financial and management challenges, but they also want to be acknowledged for their expertise in running organizations, delivering services and relating to their constituencies. A partnership based on mutual respect and reciprocal learning is likely to produce lasting results.

Capacity-building support is dedicated to helping nonprofits overcome internal impediments and weaknesses and improve overall functioning. Nonprofits will be there long after the funder has gone. As the medical profession is committed to "do no harm," let us strive to leave stronger organizations—not burdened, disgruntled grantees—in our wake.


Illustrations by George Schill


Lee Draper is president of Draper Consulting Group, a firm in Culver City, California, that provides management services to grantmakers and nonprofits (www.drapergroup.com). Her career in philanthropy began in 1983 as a program officer for The Ahmanson Foundation.


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