A Need for Accessible Nonprofit Capacity Building
A for profit business is expected to build a business plan that includes careful tending of its operations, business systems and human resources. Putting every ounce of resources into production without planning to build the business's capacity to grow and adapt for the future, is a recipe for business failure. Yet nonprofits, charged with addressing many of society's greatest challenges, struggle to prioritize the building of their organizational capacity. Historically public and private funding sources for nonprofits support special programs and direct services to clients but not the business and organizational development of the service provider. Less than 3% of funding from foundations, corporations and individuals is specifically directed toward capacity building in nonprofits.

As the CEO of a trade association of nonprofits charged with building the capacity of nonprofits located throughout California I was grappling with how to achieve this cost effectively. While the trade association was able to provide training in various locations throughout the state and keep the costs low by securing contributions from funders, participation was still limited because of the high cost and time to attend. Even if staff could attend training, the time and resources to implement the learning topic were limited. The trade association experimented with one on one consulting with nonprofits throughout the state but found the consultant's cost of travel prohibitive.

Crafting a New Approach
These challenges spurred the evolution of a program design dubbed the "Virtual Learning Cluster," which offered ways to reduce the costs of capacity building for everyone, while increasing the implementation of learning through a supportive, goal centered process. The Virtual Learning Cluster program design utilizes four primary capacity building tools:

a. web-based teleconferenced workshops
b. goal-focused action steps to reinforce a learning topic
c. technical assistance from experienced peers
d. teleconferenced peer support group meetings

It was hypothesized that the web-based approach of the Virtual Learning Cluster would allow more nonprofit staff to participate in the training and therefore enable more of an organization's staff to be prepared and motivated to achieve the learning goal. Advice from experienced peers acting as consultants, would help accelerate the learning and achievement of the work goal. Nonprofit staff would be able to meet by phone and web conferencing as well as share knowledge and resources via email. This virtual networking and resource sharing would help keep the participants motivated and accountable.

The goal in developing the Virtual Learning Cluster approach was to make a contribution to the field of nonprofit capacity building by exploring the potential of a new program design utilizing technology and peer learning clusters. The benefits of identifying effective low-cost methods for delivering training and technical assistance to nonprofits could change the delivery systems of nonprofit capacity building. An improved learning model for nonprofit capacity building could increase:

a. the number of nonprofits who are able to participate in capacity building efforts,
b. the quality and effectiveness of capacity building, and
c. a nonprofit's ability to learn and adapt to change on its own.

However to test the Virtual Learning Cluster program design, it needed to be implemented in a real-world scenario.

Putting the Virtual Learning Cluster to the Test
To examine effectiveness of the Virtual Learning Cluster model, ten microenterprise development nonprofits enrolled in a program called the "Data Collection Learning Cluster" (DCLC). The purpose of the program was to improve the data collection systems of the nonprofits. Efficient data management systems are particularly important for microenterprise nonprofits in order to effectively report their program outcomes to funding agencies and to better track the progress of their small business clients.

The experimental process of the Virtual Learning Cluster, implemented over a nine-month period, incorporated a web-based training, goal setting and implementation with the help of experienced peer consultants, and support group meetings held by teleconference.

Overall, the participants of the Data Collection Learning Cluster were pleased with the program components and generally felt that their participation helped them achieve or at least get the momentum to achieve their program goals. The strongest areas of satisfaction came from the:
1. Opportunity to access experts such as the trainers and peer consultants in a convenient way.
2. Accountability of the program. Having to report to their peers and to a program consultant kept them motivated.
3. Framework of the program design that included the basic training, workplan development, consultant work and peer support group meetings.
4. Supportiveness of the program trainers, consultants and peer participants.

The major aspect of the program that needed some improvement was the element of connectivity. Several of the participants requested better opportunities to connect with each other as a way to benefit more from the networking. Several other recommendations for improvements in the program design were suggested by the participants and these improvements were incorporated in subsequent programs.

Teaching Nonprofits to Fish: Self-Sufficiency in Capacity -Building
This study also revealed some surprises and prompted questions that can be examined in future studies. Notably, the participants felt their organizations had been empowered to solve their own capacity building challenges. Is it possible that by removing the need for "experts" as the driver of capacity building, we could empower nonprofits to create their own learning communities within their own organizations and among themselves, tapping experts as needed? Does this empowerment encourage nonprofits to take more of a leadership role with funders in securing capacity building support?

Lessons for Funders
Funders can also create their own incentives and pressures to develop nonprofit organizational capacity. Funders may choose to make participation in capacity building programs a condition to receiving support. Negative pressures such as the threat of reduced funding or financial losses may lead the nonprofits to seek capacity building programs. Funders can also provide incentives in the form of special grants to nonprofit grantees for the purpose of capacity building and provide financial support to capacity building organizations such as trade associations and nonprofit resource centers.

A Promising Approach
Could the reduction of the cost of capacity building encourage both funders and nonprofits to invest in the effort more often and in greater scale? The low-cost and high level of participant satisfaction with this model is encouraging. With an increased appreciation for the value of improving nonprofit capacity to achieve its mission, it is hoped that both funders and nonprofits will support further development of creative and accessible methods of nonprofit capacity building.