Positioning Your Organization for Capacity-Building Grants

Sade Dozan

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Nonprofit Organization Management Professional

Building a legacy that stands the test of time is difficult. On average, US-based nonprofits have expenses of less than $1 million; and the majority of those focus on youth, education, community development, or human services at large. For every ‘powerhouse’ nonprofit (with budgets in the billions) there are thousands of grassroots organizations with expenses under that $1M mark. It is a tough market out there; institutional support is competitive and setting your organization up for success is key. The previous posts touched on the types of institutional support available, and how to best communicate your mission and solutions to funders based on their preferred tones. Now, let’s dive deeper into how to further position your organization for capacity-building success so that your organization can grow effectively and sustainably.

One cornerstone of strong organizational growth is strategically increasing capacity. Successful programmatic implementation is the vehicle that drives your mission and vision, but the institutional support of an organization is equally as important. 

In addition to program support funding opportunities, there are funders such as the Annie E. Casey Foundation (who work primarily to strengthen organizations that support children and families) or The David and Lucile Packard Foundation (which focuses on nonprofit leadership & governance at large) that directly support the capacity-building efforts of nonprofits or general funds. Capacity Development grants in a nutshell are funds used specifically to build resources and tools that help your organization strengthen its infrastructure; whereas general operating funds can be used for anything your organization needs (programmatic, capital, or capacity-development). Learn a little more about why capacity-building grants are game-changing opportunities here. 

Three Tips to Keep in Mind when Applying for Capacity-building Grants:

Develop a Framework: Create a Strength Weakness Opportunities and Threat (SWOT) analysis of your nonprofit systems and structures before looking for funding.

This is important for two reasons:

    • Prioritization of Requests. You need to have a comprehensive understanding of your immediate growth needs, and what could wait for later. For example, is it more important that you build out a finance department to better track expenses and reporting; or is a software or database that helps you streamline your communication with community stakeholders and track data the top priority?
    • Don’t Set Yourself Up to Chase Funding: Without a comprehensive SWOT analysis of your organization, you may be inclined to pursue funding based regardless of what your key needs are. By applying for open opportunities that do not necessarily align with your priorities, you end up chasing funding without responding to your organization’s needs. Often developing nonprofits will try and apply for any and everything, but what happens when you get a grant that focuses on building out your marketing team, but you really need a comprehensive database that tracks client success before implementing additional outreach?

All of this is to say -- create a framework and game plan before you even begin to look for funding. Do a SWOT analysis, it will help you frame your priorities. 

Build your Appeal Network Out: Once you have your framework and have conceptualized priorities, appeal to funders that are already in your network. Get referrals from current foundation funders, let them know your capacity-building needs. Even if they only fund program-specific projects, funders have a network; they talk to each other. Leverage your connections to gain additional leads on potential partners and funding sources. Prospecting tools like Instrumentl or Candid help, but nothing is as good as a recommendation from someone who already believes in your work. 

Scaffold Funding Phases: Think in long-term solutions once you have your priorities, create a timeline that allows for continuous growth. You’ve prioritized your capacity-development focus areas for the next 6 months, what are your plans and needs to accomplish those goals in the next 18 months or the next 3 years? Think about your grant writing needs, there are funds for that; leadership and management trainings, there are funds for that; growing your board….there are funds for that! Separate your strategic growth points into milestones and fundraise around those buckets of work— this goes not only for programmatic goals but also for your institutional structure and scaling efforts. 

Managing finances, updated website design, evaluation strategy, and data collection are all examples of building blocks that are critical to programmatic growth because they amplify the might of your organization. Without people power, and solid tools, nonprofits can face barriers to growing beyond the shoestring budget.  

Funders that distribute capacity-building grants recognize that organizations need to develop competent management systems in addition to programming and services. Ensure that your organization is researching general operating and capacity-development funding opportunities concurrently with program-specific support. Remember, every nonprofit with a $50 million budget, used to be a much smaller one. Every grant is an opportunity for your organization to expand its network and scale one more ring of growth. Clear direction, well-equipped staff with effective tools, and pursuit of strategic funding will help you climb that ladder.

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