Buzzword of 2011: Capacity Building

Ok, so it’s only May but I’m going to put my neck out early and call ‘capacity building’ the buzzword of 2011.  A big call, especially with so much talk of ‘transparency’ lately.  Call me cynical but I do worry that capacity building will be to 2011 what ‘collaboration’ was to 2008-2009.  We in the philanthropic sector can talk the good talk but turning the rhetoric into reality is actually bloody hard work. When I talk to my colleagues about ‘collaboration’ more often than not what we end up discussing is ‘co-funding’. And while there are excellent examples of genuine collaborations between trusts and foundations over the last few years, somewhere the definition of what collaboration is has been lost in the noise.

I don’t want to see capacity building lost from the philanthropic agenda.  It’s important for philanthropy in Australia to examine not just the ‘why’ of supporting non-profit capacity building but also the ‘how’.

But first the basics, what is capacity building? The Human Interaction Research Institute which operates the Philanthropic Capacity Building Resources (PCBR) Database describes capacity building as:

“the term used to describe funding, and services such as staff and board training, technology or other capital purchases, fund-raising strategy development, and other activities that help strengthen nonprofit organizations”.

In some circles you might hear ‘capacity building’ referred to as its evil alter-ego, ‘core-funding’.  In philanthropy speak, when someone says core-funding the response you’ll get from a foundation is likely to be ‘you should be funding this yourself’. So for some in philanthropy capacity building is simply a no go area and that’s ok. For those that are interested in the value of funding in the capacity space there are a number of challenges, the biggest of which is the question of how.

Building the capacity of grassroots environmental organisations was the focus of a number of sessions at the 2010 Environmental Grantmakers Association (EGA) Fall Retreat in the US last October.  At the retreat Amanda Martin, Executive Officer of the Australian Environmental Grantmakers Network, brought together a group of Australian funders to hear from Paul Beaudet of the Seattle based Wilburforce Foundation.  Paul explained that at the Wilburforce Foundation they recognised that in order to build the strength of the communities they were working in, they needed to build the strength of the orgnisations they were working with. Rather than develop a grants program to allow organisations to access capacity funds, the Wilburforce Foundation developed a network of service providers that their programmatic grantees could access for support in their own areas of identified need.  The Foundation’s grantees did not need to tell Wilburforce what providers they were accessing for support.  In fact, the Foundation created an entire new entity to ensure they were completely removed from the process.  This allowed their grantees the freedom to genuinely address their areas of capacity need without fearing what their grantmaking partner might think.

What I like about the Wilburforce Foundation approach is that they recognise the imbalance in the power dynamic between grantmaker and grantseeker. As a grantseeker would you feel confident in telling a funder that your organisation’s capacity needs were in financial management? What about seeking support for conflict mediation? Or support to develop your governance structure? As a grantseeker, these might be genuine capacity needs but it’s understandable that many might find it difficult to share these needs with a funding partner.  So with this in mind, can philanthropy ever be directly involved with capacity funding? The answer of course is yes, but the ‘how’ of funding capacity needs to be carefully considered before a foundation dives in.

Ultimately, investing in capacity building is investing in the strength of the non-profit sector and that benefits everyone. If the philanthropic sector in Australia wants to ensure that recent conversations around ‘capacity building’ don’t become empty rhetoric then we need to invest some time and thought (and maybe even some capacity funds of our own) into the ‘how’s’ and ‘why’s’ of funding in this space.

You can follow Caitriona’s other musings via twitter @cat_fay