Nonprofits are teetering on the edge. Chronic underfunding and underinvestment in capacity building have stunted growth and put effectiveness at risk. While organizations consume more capacity than they have, the demand for their services continues to surge. Additionally, disruptive events have impacted donor behavior, causing global giving to decline. To survive, nonprofits need to strengthen resource development capacities.

Many, however, think these efforts are costly, complicated, and disruptive. The model below highlights the foundations and steps for capacity-building success.

Leadership, culture, and communication are the foundations for success in capacity building. Excellent leaders know their organization, accurately analyze trends, and anticipate future needs. Using these insights, they determine which initiatives can deliver the greatest impact, enabling them to make cost-efficient decisions. 

Since capacity building involves effecting change, it is critical that leaders manage potential disruptions and encourage cooperation. One way is to model the desired new behavior. When leaders act consistently with the reforms, they promote and sustain the change. 

An organization’s culture also plays a role. It can either be a catalyst or an obstacle. Make sure that the organization’s culture is ready. By helping people understand that change is the norm, not the exception, leaders become instrumental in developing a culture that is conducive to capacity-building success. 

Communication is also critical. Mastering how to harness the power of “fluid, open and continuous” communication will help people understand the purpose and logic behind needed reforms. 

Continuous improvement-based capacity building  

Plan and assess to ensure that appropriate initiatives are implemented. Begin with self-reflection: determine the life cycle stage the organization is in, its specific capacity needs, untapped opportunities, and desired goals. 

Develop solutions and design content that address the organization’s needs and the issues within resource development. Design interventions that address human, structural, material, and organizational needs by engaging with stakeholders. Evaluate human resource needs, review existing processes, systems, and policies, and identify the needed reforms. Next, select the appropriate implementation method such as personal learning through formal training, mentorship, and team collaboration. 

In addition, organizations can strengthen current capacities by designing content that addresses critical issues affecting resource development. This can be things like the nonprofit starvation cycle, donor-centrism, and saviorism.  

Confront the starvation cycle head-on by tapping the organization’s marketing, communications, and fundraising capabilities to cast the spotlight on this issue. Include messaging on the true value of investing in overhead and how it helps produce results. 

Leaders can strengthen nonprofits as vehicles for democracy by transforming resource development perspectives from donor-centrism to one that is community-empowering, and user-honoring. Redesigning approaches and adopting an asset-based coproduction model, where staff and the end-users develop solutions together, will help in this shift. This results in a richer experience that also addresses white/elite saviorism, a criticism often levied against the sector. 

Implement the initiatives. Create the right environment by designating a change manager and communicating planned reforms clearly. Changes supported by leadership modeling are the most effective, such as when leaders take charge of engaging donors in honest discussions that bring attention to systemic causes of societal injustice. Be courageous when engaging donors. Choose to maintain relationships with those who genuinely desire to address existing issues. 

Enhancing human resource capacities is also critical. Pinpointing behaviors that define success helps staff understand what is expected of them.  

Lastly, make the process fun. Host a kick-off to mark the launch of a capacity building initiative. Participation can be gamified and rewarded to boost support. Remember that while the process is ongoing, celebrate even the smallest wins. 

Evaluate and respond to the gaps. This drives improvement, identifying problems and allowing for the revision of solutions. This is done periodically. Embracing this continuous improvement mindset is a huge paradigm shift but will help the organization continue its path of improving capacity. 

Capacity building for resource development is imperative for nonprofit survival. As the external environment changes, and presents new challenges and new opportunities, organizations must be able to evaluate where they stand and how to improve. As noted in the framework, success rests on the organization’s culture, communications, and leadership. Among these, the role of leadership remains paramount. Leaders influence the specific changes to be adopted and the pace of implementation. They also impact the organization’s attitude helping to solidify a mindset of continuous improvement. Leaders who can empathize and communicate excellently are critical to successful capacity building efforts and to achieving the goal of lasting change.  

Avemar Tan-Pineda is a 2023 graduate of the Masters of Nonprofit Leadership and Management program at Arizona State University. Ave and her family, have been expanding their horizons and their understanding of people by living in three countries so far – the Philippines where she was born and raised, the US and, currently, in South Korea. Her passion for international relations, promoting peace and helping impoverished communities led her to pursue a Master’s degree in both International Studies from the University of the Philippines, and most recently, a Masters in Nonprofit Leadership and Management (MNLM) from the Arizona State University. She understands that there is a deep connection between nonprofit work and the dynamics of power and international politics. She hopes to continue making an impact in the lives of children and communities in any part of the world she may find herself in.

Image by Lillian Finley.

Do more for your community by building your organization's capacity

Building the capacity of your nonprofit will allow your organization to help reach more members of your community by growing your current programs and starting new ones. The ASU Lodestar Center provides consulting services for nonprofit organizations in need of customized, individual support on specific capacity building challenges.

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