About Capacity Building

Among the first grantmakers nationwide to invest in capacity-building, The Forbes Funds recognizes that, while no single prescribed model or philosophy leads all nonprofits to perform efficiently, effectively, and excellently, four central principles should guide our capacity-building investments:

1. Strengthen organizations’ capacity to govern, plan, and manage, as well as to anticipate the future;
2. Enhance sector-wide knowledge so as to advance organizational and sector effectiveness;
3. Convene common stakeholders to discuss and address timely community issues; and
4. Ensure that the region’s consultants and educators are knowledgeable, skilled, and responsive.

As described by Grantmakers for Effective Organizations, organizational capacity is "the ability of an organization to fulfill its mission by measurably achieving its objectives through a blend of sound management, strong governance, and a persistent rededication to assessing and achieving results." As such, six components of organizational capacity are necessary for high performance: governance and leadership; mission, vision, and strategy; program delivery and impact; strategic relationships; resource development; and internal operations and management.

Governance and Leadership: The organization’s board of directors is engaged and representative, with defined governance practices. The board effectively oversees the policies, programs, and organizational operations, including progress toward achieving strategic goals, financial status, and executive director performance. The organization is accomplished at recruiting, developing, and retaining capable staff and technical resources. The organization’s leadership is alert to changing community needs and realities.

Mission, Vision, and Strategy: The organization has a vital mission and a clear understanding of its identity. It is actively involved in regular, results-oriented, strategic, and self-reflective thinking and planning that aligns strategies with the mission and organizational capacity. The planning process involves stakeholders in an ongoing dialogue that ensures that the organization’s mission and programs are valuable to the community it serves.

Program Delivery and Impact: The organization operates programs that demonstrate tangible outcomes commensurate with the resources invested. Programs are high quality and well-regarded. The organization utilizes program evaluation results to inform its strategic goals. The organization has formal mechanisms for assessing internal and external factors that affect achievement of its goals.

Strategic Relationships: The organization is a respected as well as active participant and leader in the community, and maintains strong connections with its constituents. It participates in strategic alliances and partnerships that significantly advance its goals and expand its influence.

Resource Development: The organization secures support from a variety of sources to ensure that its revenues are diversified, stable, and sufficient for the mission and goals. The resource development plan is aligned with the mission, long-term goals, and strategic direction. The organization has high visibility with key stakeholders and links clear, strategic messages to its resource development efforts.

Internal Operations and Management: The organization has efficient and effective operations and strong management support systems. Financial operations are responsibly managed and reflect sound accounting principles. The organization utilizes information effectively for organizational and project management purposes. Asset, risk, and technology management are strong and appropriate to the organization’s purpose.

Simply put, the underlying assumption is this: A nonprofit organization is more likely to fulfill its mission and reach its goals if it is well-managed. That said, any nonprofit that seeks to achieve the highest possible level of service must invest appropriate amounts of time and energy in developing innovative leadership, sound management, and a strategic vision.