Organizational Capacity - Key to Sustainability

Somewhat surprisingly, there is no clear definition of what it means to be "investing in the organizational capacity" of nonprofits, because capacity building can encompass anything from nonprofit board training, to installing a computer network. Capacity building is whatever is needed to bring a nonprofit to the next level of operational, programmatic, financial, or organizational maturity, in order to more effectively and efficiently fulfill its mission.

Today nonprofit leaders and funders agree that effectiveness and impact are what matter, not the quantity of outputs, or how replicable a program might be. Nonprofits and funders recognize that there are many ways a nonprofit can build its capacity to achieve greater impact. Capacity building can be - but is not necessarily - exciting and "innovative." And certainly it is not always about "scaling up." Even small organizations with modest budgets and very focused missions can emerge into high-performing, impactful organizations, given the will and the resources to do so.

Building the capacity of your nonprofit to move on to the next phase of its organizational development is a challenge. It can help to know what the most pressing need is for your organization. What will give your nonprofit increased strength and effectiveness, enabling your nonprofit to survive the challenges of the current economy and sustain itself well into the future?

Article adapted from white paper "Effective Capacity Building in Nonprofit Organizations Report for Venture Philanthropy Partners McKinsey and Company (2001)