Capacity building is a complex concept that came into fashion in the for profit world in the 1990’s. It has a variety of definitions (organizational development, organizational effectiveness, organizational performance management) because it can encompass many aspects of helping an organization complete its business – selling products, sustaining a mission. But while complex and multifaceted, there are some lessons to be learned for nonprofits.
Capacity building is the ability to learn – especially from past experiences – to be reflective about what works, and doesn’t work, to be flexible, and adaptable. It is an abstract term that encompasses a wide range of capabilities, knowledge and resources – including programs, governance, financial management, fund development, and human resources.
The main focus of capacity building is often the mission, vision, and strategies for the organization. It is the intentional, coordinated and mission-driven efforts to sustain:
Leadership development Board development
Strategic planning Financial planning
Program design and evaluation
Of course, capacity building for a particular organization may vary, depending on its maturity. In the lifecycle of organizations, a nonprofit may be a start-up, an adolescent, a mature, or a stagnant organization. For example, why does a decrease in demand for services or a cancellation of a funding source lead one nonprofit to thrive, but another to stagnate? It takes adaptive capacity, leadership capacity, management capacity and technical capacity. It is the ability of an organization to fulfill its mission through a blend of sound management, strong governance, and a persistent rededication to achieving results. In other words, capacity building.
By the way, the mission of Executive Coaches of Orange County is: to help nonprofit managers develop and implement capacity building strategies that will enable the organizations to do more of their good work in our community.