Making progress on a worthwhile mission is where it’s at – it’s the bottom line of a nonprofit just as making money is the bottom line of a commercial venture. Nonprofits have a job to do, and that’s to make progress on their mission. When nonprofits neglect to seek development resources—and funders remain skeptical or restrictive in their support—missions are essentially set up for failure.

What is organizational capacity, and why is it important?

Simply put, organizational capacity is the organization’s horsepower or muscle – the infrastructure that every organization needs to make and show progress against its mission. And the demonstration of progress against mission is the bottom line of any nonprofit. Any organization that can show such progress is worthy of further funding.

Making progress on a worthwhile mission is what every nonprofit naturally wants to do. It’s what it was created to do, it’s why people want to work there, it’s why Board members care, it’s what community want to see, and it’s what prospective funders want to fund. Making progress on a worthwhile mission is where it’s at – it’s the bottom line of a nonprofit just as making money is the bottom line of a commercial venture. Nonprofits have a job to do, and that’s to make progress on their mission.

How does it work?

Making progress on a worthwhile mission means, ideally, seeing that its mission comes to life, becoming more of what it can be in full form. Organizational capacity is another way of saying “the ability to make progress in the intended ways.” or “horsepower” or “it’s what’s under the hood” or “the machinery that makes the whole effort go.” Said even more pedantically, making progress means that the nonprofit’s intended beneficiaries implied by the mission statement (sometimes called stakeholders) are actually benefiting in the ways intended.

Organization capacity building sounds complex, and it actually is complex. There’s lots of moving parts to an organization of people who typically aren’t at all on the same page even if they say they are. Here are the four basic features of a nonprofit organization that can best make progress on its mission: a) its activities are designed and conducted to create the benefits suggested by the mission, b) it’s managed with the intent to make progress, c) it communicates its progress to secure resources to further the mission, and d) it works with others to maximize the chances of shared success.

Said more simply, these four areas of organizational capacity are:

• Programming or activities
• Management and accountability
• Resource development
• Community connections

You’re right to think each of these can be broken down further and stated in ways suggesting what to look for, which is what we present in our one-page “Framework of Essential Nonprofit Organization Capacities,” which you can download below, free.

Growth in organizational capacity

When someone says their nonprofit has “grown” in recent years it should mean, in my view, that it has grown in each of the the twelve items in the Framework. Not just in revenues, or staff size, or office space, but overall capacity – the capacities that when combined just right advance the mission – the areas of capacities included in our Framework.

Growing to become stronger, more fit, more fully flowered (hoping that different metaphors work for you), more sustainable, more of what it takes to go the distance – that’s what building organizational capacity is about. What’s being built is the infrastructure that can better achieve nonprofit missions. It’s growth in effectiveness defined in that nonprofit bottom-line way: demonstrable progress against the mission. See my book, “How to Save the World: Evaluating Your Choices” for a fuller explanation.

Building organizational capacity that advances charitable mission is central to that nonprofit’s survival and value to the community. And publicizing these advances is a key to developing resources for the future. In my opinion, this dynamic holds for any organization in the nonprofit or philanthropic sector.

“Framework of Essential Nonprofit Organization Capacities”

Follow the link to our Organizational Capacity Framework, a one-page overview designed to provide a conceptual snapshot of an organization’s capacity. This framework organizes familiar elements into a structured format, highlighting the essential nature of each component. Our extensive evaluation experience over many years has consistently demonstrated the importance of these key capacities.

For each of these items, an organization can have very little going on, or quite a lot. It can be stronger in some areas than others. Some parts may be underdeveloped and others overdeveloped. Most likely they might not fit well together and act awkwardly, the left hand not knowing what the right is doing. But if there is steady growth in all of the areas, that’s a very good indication of increased ability to make progress on the mission – and that’s worth crowing about.

Of course, it should be clear that building capacity takes money, time, and effort. One has to dedicate time and effort, and in this economy time and effort take money. This is true in the for-profit world as well, and the money to do that is built into the sales price of their product or service; nonprofits have to build time and money into their budgets, so that donors know that they’re buying not only a service but also the opportunity to grow. Solicitations for support have to make that clear. Building organizational muscle doesn’t just happen by itself; it happens by an expenditure of resources, skill, and commitment – all of which have to be found somewhere.

To grow your capacity, start where you are

Continuous improvement is a universal aspiration for individuals and organizations alike, particularly those dedicated to achieving a mission. Just as every individual and community possesses inherent capabilities, every nonprofit organization has an existing foundation of capacity. When nonprofits neglect to seek development resources—and funders remain skeptical or restrictive in their support—missions are essentially set up for failure. Yet, due to historical and cultural factors, a cycle of nonprofit hesitance and funder paternalism persists, stifling progress and allowing vital missions to wither. Here‘s a bit of a rant on this subject.

To improve, start by learning what the organization is doing well, and how it could improve

For most individuals (especially young ones), striving to improve comes naturally. But strengthening an organization typically requires a number of intentional and sustained acts.

To start the process of intentionally getting stronger, there’s the exercise of “assessing your organization’s capacity – taking stock of current strengths and identifying opportunities for improvement.” There’s many different ways to do this, ranging from simple, intuitive, and cheap to more formal, systematic, and costly. It needn’t be an ordeal. We suggest going for a process that’s simple but systematic, and inexpensive.

The idea is to create a way your people can take the pulse of your organization to learn how it’s doing in each of the areas and items in the Framework. You’ll have to invent your own process that stands a chance of working in your organization. A workable process requires a bit of planning and sustained effort until it’s done. Start by scheduling time at your next staff or Board meeting to create a process where you (and/or others) can discuss each of the areas of the Framework and come to some temporary conclusions about your organizational strengths, as well as areas where improvement should be prioritized. It will probably take more than one meeting to clarify the steps of such a process. And then it will take some time to see it through to the end.

Second, see the plan through to the end. Creating a plan is the easy part; harder is seeing it through. In the beginning, someone in authority has to bless the plan in which it is agreed who will do what in collecting and organizing the information needed to make judgments in the twelve items of the Framework. Then your organization actually has to work the plan from beginning to end, with some check-in points along the way where progress is reported to the one in authority.

Third, write up what’s been learned and present these findings. We suggest there be a written report and oral presentation, where The Assessment is reported, perhaps first in draft form, to an internal audience – like the “Assessment Committee” that initially authorized or designed the plan. This presentation would focus on a “A list [or narrative] of our Strengths at this point in time – what we’re good at and proud of” and “A list of Areas for Improvement if we’re serious about making more progress.” It might take more than one presentation to one audience to get the buy-in to proceed.

Last (for now), those in charge should decide on steps needed to get to the next level of capacity. Ideally, the two principal narratives (Strengths, and Opportunities for Improvement) would be prepared with an eye toward the future – recommending the actions that should lead to more progress on the mission. Some of these would be actions where staff or committees get tasked with moving forward with the easier improvements. And some would be actions requiring resources from outside, from current and prospective allies to provide help with the heavy lifting. Both these streams require leadership to move things along.

Momentum is essential, so don’t take too long getting to this point

Unfortunately, what happens way too often is that forward momentum in producing this “Assessment of Organizational Capacity, and Plans for Getting to the Next Level” grinds silently to a halt long it’s finished. This is usually because building capacity doesn’t stay on anyone’s list of priorities long enough, and there’s not enough internal accountability to keep pushing forward.  Other things compete for its attention: day-to-day crises large and small interfere, and “there’s program to do.” These breaks in the effort, caused at root by insufficient money to buy time for it, are almost inevitable, but they can be crippling to efforts to grow the organization’s impact. And that’s a costly shame, especially at a time like this, when progress against worthwhile nonprofit missions is vitally necessary.

For a free download of our “Framework of Essential Nonprofit Organization Capacities,” click here.