Making Sense of Capacity Building

Organisational capacity building is essential to both funders and grantees to fulfil a shared vision of social impact. It is in the interest of both funders and grantees to ensure that key skills are firmly embedded in grantee organisations, such as leadership, governance, fundraising, marketing, communications, strategic planning, advocacy, systems and processes, financial management, monitoring and evaluation and core support. 

The relationship between a funder and a grantee is built on the funder’s vision and recognition of a specific societal need and the grantee’s vision and ability to deliver on the mission. Funders have the skills to identify the grantees most likely to fulfil their vision and deliver the social impact they desire. Their programme officers carry that vision, oversee programme development, select grantees, manage projects and oversee budgets. Grantees bring knowledge and experience from the field to develop and run projects, but they often require capacity building to attain the essential skills needed to achieve sustainable social impact.

All grantees – small, medium and large – are challenged to obtain, improve and retain these skills so that they can drive social change globally and sustainably and deliver on their commitment to funders.

Capacity building is considered a core cost that is not part of a project and, therefore, not supported adequately by funders. Does this make good investment sense? Take, for instance, a grantee’s ability to fundraise. There is a strong argument that a funder will benefit from a grantee’s ability to fundraise successfully. A funder’s investment in a project is time-bound, but the project ROI depends, not only on the grantee’s ability to reach targets during the funder’s involvement, but also to continue to deliver on its mission beyond the period of the funder’s specific grant. Grantee dependency on a sole project funder weakens the prospect of continuing action and social impact on the ground.

The funder perspective on capacity building:

As a funder, you are both a catalyst and an agent of change. You seek to directly assist and influence target communities and invest your private and public funds in specific and measurable projects in human rights, alleviation of poverty, health, education, environmental protection, women’s and children’s issues… 

Your ROI is the fulfilment of your vision, the measurable social impact and your lasting legacy of contribution to the improvement in the lives and communities you strive to help.

How can you feel confident that your grantee will be able to deliver the anticipated results and continue to do so beyond the period of your grant? How can you support your grantee to drive a more sustainable mission? How can you effect a successful exit strategy with the confidence that your grantee is in a stronger and more sustainable posture than when your relationship first began? 

The grantee perspective on capacity building:

As a grantee, you have developed a project that has captured the attention of a funder with whom you share a mutual vision of social impact.  Beyond the skill and experience to lead the project, how can you ensure that your organisation can reach the anticipated results and continue to affect the lives and communities you have earmarked? 

You know that most funders have rules and boundaries that apply to core support and that most funding is restricted to specific and measurable project targets, not organisational development and people skills. Project funding is what is available, and your priority is to fund your project. You might, at best, hope that the rest will fall into place somehow. Is this good enough? It wouldn’t be a sustainable model for a profitable business driven by shareholders; so, why should this uncertainty be good enough for a mission-driven organisation serving a social purpose? 

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Capacity building is essential to ensure the long-term performance and sustainable delivery of social impact projects in an organisation. It is not a luxury, but rather what makes organisations capable of delivering their knowledge and experience on the ground. Capacity building makes good sense to funders and their grantees who share a common vision to drive social change globally.