Special Section: Stronger Nonprofits
Going to the Next Level
Like wholesalers in the business sector, foundations are at least one step removed from the individuals, families and communities they hope to touch. Because grantmaking foundations must rely on nonprofit organizations working at the equivalent of the retail level, it is in their enlightened self-interest to help nonprofits gain and sustain the capacity needed to produce results that serve the missions of grant givers and recipients.
So all the buzz about capacity building boils down to a pretty simple premise: A strong, capable nonprofit organization stands a better chance of producing desired results than a weak one.
That much is obvious. But how to "do" capacity building effectively, and who should be responsible for paying for it, are not. Recently the "who" in question has focused on the role foundations can play. This has resulted in an increase in visibility of capacity-building activities to strengthen nonprofits. Questions remain about the effectiveness of such efforts and about the types of field-building efforts that might help create the "next generation" of nonprofit capacity-building programs.
To inform its own planning efforts, the John S. and James L. Knight Foundation commissioned an environmental scan of capacity building and philanthropy. In particular Knight wanted information to inform how best to strengthen nonprofit organizations serving the 26 communities across the country where it makes grants, though the resulting review was also intended to contribute to philanthropy's ongoing conversation about capacity building.
The scan, conducted by the Human Interaction Research Institute from September 1999 to March 2000, involved interviews with thought leaders and technical experts and a combined print and Internet search. It also examined the capacity-building activities of nonprofit organizations, consultants and other service providers, intermediaries and academic institutions.
What We Learned
Support for the growing trend in strengthening nonprofit infrastructures can be seen in the more than 300 "management support organizations" we identified and the many individuals who provide nonprofit-building services. Currently, 76 university graduate training programs specialize in nonprofit management, not counting the academic centers that study nonprofits and philanthropy.
From the research emerged the fact that foundations have sponsored three main types of activities to strengthen nonprofits, which can be categorized as follows:
The survey also identified a core group of eight effective elements useful in developing nonprofit organizational building efforts (see "Target Practice: The List of Eight"). The challenges and recommendations resulting from the research are of particular interest to foundations and nonprofits looking for a realistic perspective on strengthening nonprofits.
Some of the Challenges
According to Ben Shute at the Rockefeller Brothers Fund, awareness is growing in American philanthropy that, especially in urban areas, there are now enough foundation players and enough organizations receiving nonprofit-building funding that some duplication of services is inevitable. A number of other interviewees for the scan gave examples of potential or actual overlap. As yet, there are only a few systems in place for coordination, so that such duplication is hard to track or change.
Increasing duplication of services and marginally effective providers make a "shakeout" of the capacity-building field likely-followed by a coming second generation of more sophisticated (evaluation-based, theory-driven) capacity-building programs.
Finally, more is needed to support nonprofit building within philanthropy itself-to educate funders, nonprofits and communities; to replicate proven strategies; to promote sharing of good practices; and to relate how increased organizational capacity furthers the overall goals of philanthropy.
Issues such as the ethics of nonprofit building mostly revolve around the inherent imbalance of power between foundations and nonprofits and around the possibility that nonprofit-building interventions could actually damage nonprofits. As Mary Ann Holohean of the Eugene and Agnes Meyer Foundation puts it, the "first, do no harm" principle of medicine needs to be followed in capacity building, where there may be more potential for damage than any other kind of activity in philanthropy.
Recommendations for Field Building
Create a database starting with the 200 programs already identified containing brief descriptions of "best practices" in building better nonprofits. A print version and an on-line version of this database can be disseminated to interested parties in searchable format using the Grantmakers for Effective Organizations Web site, for example, or an Internet service such as Helping.org.
Analyze existing evaluations of capacity-building programs in philanthropy to synthesize common findings, refine the preliminary definition of core components (see "Target Practice: The List of Eight") and identify methodological problems with this type of evaluation.
Conduct case studies of nonprofit-building programs in philanthropy, identifying key types of philanthropic initiatives and using the case-study approach to develop a deeper understanding of how these programs were created, what they did and what effect they had.
Conduct empirical research on the effectiveness of specific capacity-building interventions to determine, for instance, whether peer-consultation approaches may be more effective than expert interventions, at least for certain types of nonprofit building. Ideally, research studies of this sort could be coordinated among funders interested in nonprofit building.
Develop an on-line capacity-building service that uses the Internet to deliver information resources, assessment technologies and technical assistance for nonprofits and foundations on this subject. An on-line capacity-building service could provide information, computer-guided tutorials and diagnostics, direct e-mail access to consultants and other real-time electronic services for nonprofit-building.
Promote cross-sector dialog on capacity building to stimulate sharing of ideas among nonprofits, philanthropy and other sectorsparticularly the corporate world and government, both of which have their own distinctive interests in capacity building.
The Element of Time
Among the issues for consideration were how to integrate the faith-based community better, how to measure both the evident and hidden costs of engaging in nonprofit building and how to encourage wider adoption of capacity-building interventions by foundations.
Another important point that surfaced in the scan was raised at this meeting, too: There are plenty of times when embarking on capacity building is not appropriate, and the hard part is knowing how to recognize when the time is right.
Two Go-To Resources
A number of individual foundations and other grantmaker affinity groups also offer learning and networking events on this subject. The Alliance for Nonprofit Management, a national association, provides similar activities targeted to nonprofits (www.Alliance online.org).
Target Practice: The List of Eight
John Bare is director of evaluation for the John S. and James L. Knight Foundation in Miami.
Thomas E. Backer is president of the nonprofit Human Interaction Research Institute in Los Angeles.