Capacity building is a major topic among not-for-profit organizations and organizations that provide services to not-for-profits. In fact, a recent survey by Paul Light, of the Brookings Institute, found that those organizations with increased organizational effectiveness showed an increase in funding.

But what is capacity building? Capacity building in not-for-profits is similar to organization development, organizational effectiveness, or organizational performance management. Capacity-building efforts include strategic planning; defining business goals and objectives; and identifying areas for operational improvement in grant management, fund development, marketing, training and development sessions, coaching, and collaboration with other not-for-profits.

Capacity building begins with an assessment to determine strengths and areas that need improvement. This enables an organization to identify its priorities for strengthening or expanding management operations.

Case Study

Recently, a group of organization development consultants engaged with the Center for Non-Profit Effectiveness (C-One), an agency supported by the Health Foundation of South Florida to serve not-for-profit healthcare agencies in South Florida. The purpose of this initiative was to improve the management and operational effectiveness of selected health-related organizations in Miami-Dade County.

The Organizational Effectiveness Initiative (IOE) was a yearlong capacity-building effort implemented by C-One and supported by the Health Foundation of South Florida. Thirty-three health care organizations participated in the initiative. The average age of the IOE organizations is more than 20 years, with an average budget in excess of $10 million dollars.

The project had four phases: planning and selection, assessment, operational planning 1, and operational planning 2.

Planning and Selection

C-One worked with several consultants to design an assessment instrument that would provide organizations with insight into their effectiveness.

The two main deliverables of the planning phase were to

  • identify an assessment tool and process for IOE participants
  • recruit and select up to 40 health-related organizations to participate in the IOE.

Assessment Phase

An OD consultant met with each organization's executive team to debrief them on the data from the assessment tool developed in the first phase. Each organization received a personalized report with a summary of the data as well as the consultant's feedback report and recommendations.

Operations Planning 1

The third phase involved meeting with each organization to help it develop operational goals and objectives. The planning was very complex, depending on the operational needs of the organization. The organizations' requests included support for conducting a strategic plan prior to working on their operational improvement plan. OD technical specialists met with the organizations to identify actions for improvement.

Operations Planning 2

During this stage, OD consultants reviewed the operational plans. Their recommendations on the quality of the plans were given to C-One. This provided guidance to the Health Foundation of South Florida as to which organizations were eligible for future grant funding for operational improvement.

What Was the Impact?

With clearer directions and a sense of their needs to improve performance, organizations have clearer goals for the future.

The majority of organizations realized the need to improve IT systems, provide employees with computers and updated software, improve marketing and fund-raising efforts, provide board governance, identify succession planning for the executive team, improve recruitment and retention for employee satisfaction, and provide leadership development.

Ten organizations were selected to participate in the next grant-funding phase from Health Foundation of South Florida. Once the funding has been awarded, the OD consultants will provide assistance to help implement the operational improvement plans.