What is Capacity Building

Through the Small Grants Program, the Tennessee Disability Coalition intends to support
building the capacity of other organizations that serve individuals with disabilities and their
We are focused on capacity building that refers to the organization itself, not to the people being
served by the organization. The funding is not meant to build the capacity of your clients, it is
meant to build the capacity of the organization to better serve your clients.
Capacity building:
Is a broad term that encompasses actions that improve nonprofit effectiveness, in terms
of organizational and financial stability, program quality, and growth.
Can create infrastructure.
Should make the organization more efficient and potentially more effective.
Refers to strengthening the nonprofit organization so they can better achieve their
mission. Areas for capacity building may include administration, finance, and human
The following are excerpts from various sources which may further illuminate this concept of
capacity building.
Nonprofit organizations are justly admired for their passionate commitment to mission and their
inventive approaches to addressing urgent social problems. Across the county and around the
world, nonprofits are implementing programs that are improving the quality of life for tens of
millions of people, and they are often doing so against heavy odds and with very limited
The success that nonprofits have demonstrated in addressing social issues has generated
increased demand for their services. Government is increasingly turning to nonprofits as
potential service providers and partners in tackling our most pressing social issues. We now
recognize that most of these issues – such as hunger, homelessness, or environmental
conservation – will not be “solved” in our lifetime, and therefore will require strong organizations
to continue to address them. Nonprofits have an obligation to seek new and ever more effective
ways of making tangible progress toward their missions, and this requires building
organizational capacity.
All too many nonprofits, however, focus on creating new programs and keeping administrative
costs low instead of building the organizational capacity necessary to achieve their aspiration
effectively and efficiently. This is not surprising, given that donors and funders have traditionally
been more interested in supporting an exciting new idea than in building an organization that
can effectively carry out that idea. This must change: both nonprofit managers and those that
fund them must recognize that excellence in programmatic innovation and implementation are
insufficient for nonprofits to achieve lasting results. Great programs need great organizations
behind them.
From: Effective Capacity Building in Nonprofit Organizations,
Report for Venture Philanthropy Partners by McKinsey & Company (2001)
Capacity building is not just about the capacity of a nonprofit today -- it's about the future.
Distinct capacity building projects such as identifying a communications strategy, improving
volunteer recruitment, developing a leadership succession plan, identifying more efficient uses
of technology, and engaging in collaborations with community partners -- all build the capacity of
a charitable nonprofit to effectively deliver its mission in the future. When capacity building is
successful, it strengthens a nonprofit’s ability to fulfill its mission over time, and enhances the
nonprofit’s ability to have a positive impact on lives and communities.
~ National Council of Nonprofits
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