Effective and Cost Efficient Capacity Building for Nonprofits
By Catherine Marshall
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
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
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
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
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.