Words Atul Gandhi and Vijaya Balaji
Over time, we have come to acknowledge the enduring difficulties in fostering the growth of a non-profit organisation (NPO), and concerted efforts have been made to tackle these issues. The ecosystem comprises funders, subject matter experts (consultants and practitioners), and non-profit partners trying to develop solutions ranging from training sessions, learning resources, and investments in capacity-building programmes with the sole objective of enhancing the knowledge and skills of non-profit organisations.
However, capacity building for Non-Profits organisation begins with the diagnosis of the organisation, which consists of a needs assessment, an understanding of the size of the organisation, its budgets, geographical footprint, strategic goals, and growth aspirations. These initial assessments and knowledge form the basis for the design of capacity-building solutions, and their support mechanisms, such as cohort-based training, consulting support, or other elements, emerge. As capacity development is currently at the centre of efforts, unlocking philanthropic capital for such initiatives makes it imperative to unpack some fundamental questions:
- How do we define it?
- What change is envisioned as an outcome?
- How does one measure this change?
Evolving Capacity Frameworks
Our experience working with non-profit partners across diverse capacity development programmes has reinforced our approach to evolving frameworks, tools, and assessments. Capacity-strengthening programmes hinge on the absorptive capacity and adaptive capability of an organisation, which requires a deeper understanding and defined attributes. Conceptualising any capacity strengthening programme requires an intense diagnosis, going beyond the need to focus on size, lifecycle stage, vintage, and operating budgets. Team compositions, existing skill levels, and tangible assets, among others, need to be closely defined to enable more purposeful outcomes for the programmes.
New Paradigm in Capacity Building
It is our belief and understanding that a new paradigm in the diagnosing and designing of capacity building is well underway. This new approach focuses on the behaviours of organisations and their personas. The initial stage in establishing a foundation for developing capacity-strengthening solutions involves comprehending, evaluating, and defining non-profit personas.
Absorptive Capacities and Organizational Growth
The absorptive capacities of an organisation depend on the people and involve mindset changes. An organisation should possess the capability to critically assess itself through systematic review processes and a transparent reporting framework. This not only facilitates a comprehensive understanding of financial expenditures but also empowers the organisation to identify judicious avenues for fund allocation. Ultimately, such an approach enables informed decision-making regarding the necessity for organisational change. While deciding this, it is important to consider the organisation’s needs and its ability to stay on top of any periodic updates that such changes may require.
Strategic Technology Adoption
For example, an organisation does not have to incorporate technology merely because most other companies in their space are doing so. Adoption of such technology must be done only if the organisation requires it and foresees the benefits arising from using it. For such a change, however, the organisation must be cognizant of the fact that technological solutions will require continuous upgrades, which, apart from being a lot of work, will create dependencies that they might not be able to afford. Thus, at the heart of it, the absorptive capacity determination will enable an organisation to come up with capacity-building measures that they can execute and have the infrastructure and skill set to undertake.
Assessing an organisation’s absorptive capacity includes the following:
- Identifying changes is crucial for the organisation’s long-term sustainability. Further, consider not only immediate needs but also those that ensure enduring success.
- Calculating the costs associated with these changes, factoring in their potential long-term benefits. It is imperative to ensure that investments made today contribute to the organisation’s sustained viability.
- Understanding the current financial position is necessary to ascertain if existing resources can be directed towards essential changes and maintenance for the organisation’s long-term financial health.
- Strategically identifying and securing financial resources for sustainable development. And in turn, focusing on sources that guarantee continued support for ongoing initiatives.
Inclusive Mindset Shifts in Capacity Building
Any mindset changes accompanying the absorptive capacity building of an organisation should ideally involve all the stakeholders. This includes, but is not limited to, the team members, the board members, and everyone else in the organisation, down to and across levels. It is crucial for this process to be as inclusive as possible.
While undergoing mindset changes, it is important to realise and remember that there are associated costs that will have to be borne by the organisation. These are not just monetary costs, but resources, time, and effort. Thus, it is important to be cautious and objectively assess necessary changes according to the needs of the organisation.
Adaptive Mindsets and Organizational Capacity
A nuanced understanding will conclusively tell us that adaptive mindsets feed the absorptive capacities of any organisation and are interrelated concepts. Together, these enable any organisation to not just gauge and assess changes to be undertaken for capacity building but also enable them to execute such changes seamlessly.
Enhancing organisational development through capacity building becomes tricky with the varying perspectives and opinions from consultants, portfolio managers, as well as leadership and operating teams within the non-profit organisation.
Autonomy in Capacity Building Decisions
There is an imperative need to move away from the prevailing prescriptive approach towards capacity building. Rather than relying solely on the perspectives of consultants, portfolio managers, etc., there is a need to shift the power and discern for oneself whether capacity building is required and what the key areas are that must be addressed. The aim should be to equip organisations with the ability and autonomy to assess for themselves the capacity-building initiatives that they would undertake.
Strategic Principles for Grassroots Empowerment
In the realm of initiatives dedicated to enhancing the capabilities, resilience, and future readiness of grassroots organisations, a strategic approach involves embracing three fundamental principles.
- Firstly, entrust the discretion of fund utilisation to the recipient organisation, fostering a sense of ownership and accountability.
- Secondly, empower organisations to operate within domains they perceive as essential, recognising the intrinsic value of their expertise and local insights.
Finally, establish a robust monitoring and reporting system, intertwining financial support with organisational performance, thereby ensuring a symbiotic relationship between resource allocation and impact assessment. This multifaceted strategy not only encourages self-determination but also maximises the effectiveness of interventions, ultimately contributing to meaningful and sustainable positive change.
Empowering Self-Diagnostic Tools
The reinforcement of organisational autonomy needs to be incorporated from the get-go. The design of the organisation’s diagnostic tool can follow a non-evidence-based approach and allow for self-assessment by the nonprofits. When organisations are empowered to undertake the diagnostics themselves, it allows for a deeper understanding of their own strengths and shortcomings—a critical first step in their decision-making process.
Focus on Fundraising in Capacity Building
While capacity-building efforts are directed towards various organisational domains encompassing people’s function, financial sustainability, and communication, among others, the one area that historically organisations have identified has been fundraising.
The capacity building of organisations requires the following as fundamentals in any initiative:
- Availability of capital that is allocated specifically to capacity building and organisation development so that NPOs are not tempted to redirect the funds to programme or core expenses, as this would be a huge opportunity loss.
- Training-based support with an emphasis on application-based learning outcomes lends itself to the upskilling of NPO teams.
- Support that goes beyond diagnostics, assessments, and training when NPOs embark on their capacity-building or organisation-development journeys.
Aligning Capacity Building with Organizational Goals
Advisory support as sounding boards, domain knowledge, and review mechanisms enable these initiatives to progress in the intended direction. Tying in these initiatives with the larger organisational goals advances mission fulfilment.
As capacity building gathers more momentum, it is imperative to identify outcomes and reporting frameworks. The solutions designed by the organisation, across all domains, must contribute to the effectiveness and efficiency of the organisation’s operations. More importantly, we must be able to tie enhanced capacities with the quality of the organisation’s programmes that are delivered to the first mile in the communities they serve.
Continuous Capacity Building for NPO Resilience
Focusing on capacity building can help the non-profits align their efforts to reinforce the administrative processes. It also help adopt the latest technologies, upskill the staff, streamline financial management and human resources processes—all of this with an emphasis on future readiness and becoming resilient against any disruption. Working towards building capacity is imperative. It should be a continuous exercise. Thereby empowering NPOs to fortify their core capabilities and propelling their workforce towards creating a meaningful and strategic impact, besides strengthening their holistic organisational well-being.
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About the Authors
Atul Gandhi, COO, EdelGive Foundation and Vijaya Balaji, Founding partner and CEO, Social Lens
Atul Gandhi, COO, EdelGive Foundation
Image Caption: The image represents the journey from vision to action, showcasing a holistic approach to capacity building for non-profits. It visually conveys the transformative path from an initial idea to impactful community action, highlighting key stages of collaboration, learning, and technological adoption along the way.
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