Choosing a Collaborative Grants Management System

In our last post - Defining a Collaborative Grants Management System, Laura outlined our vision for a “collaborative grants management system”, which would allow our two organizations-- the Social Sector Accelerator and CIVICUS World Alliance for Citizen Participation—to collaborate together, with grantees, and with the sector as a whole.  In this post she describes the four-step process for how we moved from that vision to a decision as to which vendor would work best for us.

Defining Minimum Viable Requirements

Based on the overall vision of a collaborative grant process and platform that moved more resources into organizations in the Global South, we pulled together an Excel document of 60 key requirements for the system, and prioritized them as to what was “Critical”, “Important” and just “Nice to Have”. These requirements were based on interviews with existing and potential grantees, grants management staff at both organizations and drawn from the best practice we reviewed from Peak Grantmaking and Grantmakers for Effective Organizations.

This prioritization allowed us to define our “Minimum Viable Product” (MVP)—a concept taken from the corporate software development sector.  An MVP is a very stripped down first release which serves as a starting place to iterate from—truly, the minimum product it makes sense to put out into the world. In our case, the MVP requirements were a set of core features to manage information on organizations and constituents, grant monitoring, and a grantee portal, leaving off some of the more aspirational pieces of our vision.

Pulling Together an Initial Short List

With these MVP requirements in hand, we then considered what type of software tool we were looking for. Was it a general Constituent Relationship Management system (like Salesforce or Dynamics)? The Accelerator was already using Salesforce for another purpose, so that was appealing. Or did the set of requirements look more like a Grants Management System, or some other kind of tool?

We quickly decided that our requirements were much more akin to a Grants Management System than a general CRM or other kind of tool. The need for an online grantee portal, as well as transparency in the grant and payment monitoring made this decision an easy one.

We used the Idealware Consumers Guide to Grants Management System to pull together a short list of systems that seemed to meet our requirements. We initially focused in on systems that allowed a lot of flexibility, with the thought that this would be necessary to meet some of our more unusual requirements (such as detailed, multi-step reviews of grantee reports), but after demoing some systems, we realized that our needs were in fact less unusual than we had thought, and went back to add in some lower-priced systems. The systems that we demoed were:

Keep in mind, of course, that this isn’t a list of systems we think are “best” in any general way, but rather a list of those that had potential for our quite specific requirements.

Defining Key Tradeoffs

As we demoed systems, it became clear that most of the systems supported the majority of our requirements. Rather than score each system against each requirement, which seemed overly detailed, we focused in on some key tradeoffs that emerged. The key differentiators between systems came down to, for us:

  • Someone with limited permissions can easily review and approve a report (as opposed to a grant proposal)
  • Staff can log calls and interactions with grantee contacts, and have that tracked against grants and organizations in a Constituent Relationship Management type model
  • We can get started with an investment under $15K for implementation and the first year, but then have the ability to support multi-million-dollar programs with substantial complexity in the future
  • Grantees and staff will find it easy to use
  • We or the vendor can customize the platform to meet relatively complex unknown future needs
  • We can get started relatively quickly, without a huge implementation effort

Selecting a Partner

Who did we choose after weighing these tradeoffs?  GivingData.

We’re excited to be moving forward with GivingData. They’re a comparatively new product, but the company has a long track record in the sector and several large clients. For us, the product is a great combination of:

  • An established set of features that will require minimal custom implementation—including support for all our online portal, grants and payments, and report approval workflow needs
  • Substantial support in the near future for features such as logging interactions with grantee contacts and collaboration about reports via the online portal
  • A well designed and friendly interface for grantees and staff
  • A willingness to build custom features as needed in the future

We look forward to collaborating with GivingData on our collaborative grants management system!

Improving Our Understanding of Impact - Experimenting with Surge Measures

This past week I spent two days with 11 leaders who are funding solutions to social challenges and know that strong social sector partners are essential to their success. They spent two days together with me and my colleagues in the Social Sector Accelerator’s first Organizational Strengthening Program Design Workshop discussing strategies for helping the organizations they work with have even greater impact.

Brian Treece - Program Director of Community and Organizational Development and Evaluation at Findlay-Hancock County Community Foundation

Brian Treece - Program Director of Community and Organizational Development and Evaluation at Findlay-Hancock County Community Foundation

Each of the leaders who participated in the workshop already invests, in different ways, in strong partners. Brian Treece is one of them. Brian is the Program Director of Community and Organizational Development and Evaluation at Findlay-Hancock County Community Foundation in Findlay, Ohio. For the last 10 years, Findlay-Hancock has supported nonprofits in their community to become stronger, more effective organizations by providing in-depth coaching, workshops and targeted support such as board development and strategic planning. With a budget of $100,000, this “organizational strengthening” program supports around 30 organizations each year.

Brian and I had the good fortune of meeting in Chicago at the GEO Funders 2017 Learning Conference.  Brian attended a breakfast discussion I led where we talked about how to improve our understanding of the impacts of organizational strengthening.  Our discussion focused on how to understand what we call a “Capacity Surge” – the changes in their organization that support greater mission impact. At the breakfast I shared the “Capacity Surge” measures we had developed. These measures were drawn from our own experience and a range of evaluations, studies, and assessments that described the changes organizations and grant makers sought when building stronger nonprofits. Surge measures include organizational changes such as increase in overall budget size, engagement of stakeholders in the design and implementation of their services or number and quality of Board meetings. Not rocket science, maybe, but the essential building blocks of a strong organization delivering on their mission and helpful for clarifying what nonprofit leaders and their supporters are trying to achieve when they make investments in an organization’s strength.

After the breakfast, Brian asked if he could use the Surge Measures to help assess the effectiveness of Findlay-Hancock’s organizational strengthening program.  At the time, they were interested in three measures - grantee satisfaction, quantity of support they provided and and the impact of that support on the organizations. Though Brian and his colleagues were ahead of many foundations, they were not satisfied with the way they had been measuring the effectiveness of their organizational strengthening program. They had been asking a lot of open-ended questions but wanted to target their measures to ensure their support was achieving what they intended.  

Last year Brian organized the Surge Measures into five categories:

  1. Financial
  2. Quality and Quantity of Program or Service Offerings
  3. Collaboration
  4. Systems Thinking and Advocacy
  5. Internal Process Improvement

He then created an online survey and asked their grantees how useful the Organizational Strengthening (OS) support they received had been in each of the 5 categories. Changes to Internal Processes received the highest marks followed closely by Systems Thinking and Collaboration. 

Respondents were asked to rank the top 3 categories where the OS support had the greatest impact for their organization. With their top 3 in mind they were asked to select 2-3 specific Surge Measures where they saw improvement and describe the change.  For example:

1. Surge Measure - Our overall budget increased.

6 of 14 attributed this type of change to the OS support they received. One grantee reported that because of the support to improve their fundraising strategy their overall budget increased from $240k to $540k per year.

2. Surge Measure - We understood and influenced the system in which we are working.

6 of 13 attributed this type of change to the OS support they received. One grantee reported, “We've engaged in more advocacy at the state level in Columbus meeting with legislature addressing concerns with SNAP, TEFAP and farm bill. Held face-to-face meetings with our state legislatures at the West Ohio Food Bank and participating with a food distribution and interaction with constituents and clients.”

3. Surge Measure - We demonstrated consistent quality financial reporting. 

6 of 14 attributed this type of change to the OS support they received.  One grantee report, “From our individual coaching sessions, we determined we needed a higher-level Finance Director in lieu of an accountant. We made the staff transition and have improved financials and reporting to our board and staff.”

4. Surge Measure - We created new services.

10 of 15 attributed this type of change to the OS support they received. One grantee report, “We didn’t expand but instead we streamlined services and cut back on programs that have measurably been unsuccessful.”

5. Surge Measure - the number and quality of the board meetings we held increased.

13 of 19 attributed changes in their internal processes to the OS support they received. One grantee reported, “Board meetings are more effective because committees meet prior to board meetings and committee chairs send reports to board members in advance.” 

6. Surge Measure - We incorporate the perspective of stakeholders who are directly affected. 7 of 16 attributed changes in their collaborative practices. One grantee reported, “We have incorporated stakeholder stories and quotes into our marketing materials and use their feedback from regularly administered surveys to improve and adjust services.”

Besides the improved quality of response this survey received the highest response rate from all previous surveys (there was a 90% response rate!) and generated the greatest detail on the impact of the Findlay-Hancock OS program. It provided Brian, his colleagues and their Board with the information they needed to better understand the impact of their OS support.  The results sparked an internal discussion about how they can align their OS support with other initiatives of their foundation.

At the Accelerator, we care deeply about increasing investment in strong social sector organizations who are capable of tackling some of the world’s greatest social challenges.  One path to increasing investment is improving our understanding of what types of organizational strengthening support does and does not work. Part of our time together in the Design Workshop was dedicated to developing program specific Learning Agendas to support the leaders in better understanding which of their interventions were generated the greatest impact. 

Brian’s effort is a modest first step to building a framework for learning about OS programs. We all recognize the shortcomings of funder administered surveys. They must be complemented with other learning opportunities especially those that help to rebalance power in the funder/grantee relationship. Next Brian plans to share the data back with their grantee partners and ask them for their feedback on how to improve the way he used the measures. He wants to try at least one more survey for 2018. He’s particularly interested to see if the workshop topics they have planned for 2018 will influence the responses on the Surge Measures (in the case of this year, will they see an uptick in responses around fundraising, planned giving, storytelling, and advocacy), or if those remain stable regardless of the workshop topics.

We'd love for others to experiment with new ways of learning about the impact of their Organizational Strengthening support using Surge Measures. You can download our 'Capacity Surge" measures and the Organizational Strengthening Learning Questions generated by grantmakers at the Learning Conference. 

Defining a Collaborative Grants Management System

In our post, Unlocking Investment in the Social Sector, we described the research we conducted with CIVICUS to better understand the infrastructure needed to unlock investment in the social sector. But we’re not just researching and strategizing. we’re working together to define and implement a grants management process and platform that will increase the amount of resources flowing to social sector organizations in the Global South. Who better to work with to support this work then Laura Quinn, the founding Director of Idealware. Idealware publishes the industry bible on grants management systems – Consumers Guide to Grant Management Systems. This post, written by Laura, describes the process we’ve undertaken together with the CIVICUS team.

As a consultant to the Accelerator, I’ve been translating their vision and grants management best practices into a technology roadmap and a set of requirements for a grants management system.  It’s an interesting challenge. In what ways does the vision overlap with the features of a typical grants management system? In what ways does it extend beyond?

What we ended up defining was a system that is essentially a collaborative grants management system — one in which the Accelerator and CIVICUS can collaborate with each other, with grantees, and with other funders to reduce duplication, streamline steps in the grants administration process and support lower resourced organizations to access funds. 

i-love-it-when-a-cross-team-collaboration-plan-comes-together.jpg

What are the primary characteristics of the system that we defined?

  • Easy access to all organizational information.  The system must allow us to easily see and manage all information about each organization, the people affiliated with it, the impact they’ve had and interactions we’ve had with them. We can’t build a useful collaboration with each other without knowing what conversations we’ve had, what we’ve accomplished together, the grants we’ve worked on together, and all the documents and history which has been shared.  
     
  • Ability to build out an organizational profile from external data. Our roadmap includes knowledge and information sharing that goes well beyond the grant portfolios that the Accelerator and CIVICUS are managing together. We envision centralizing information that’s collected from each of the two partners independently and other publicly available sources of information, such as grants published through IATI. Eventually, we’d love to be able to let grantees share their profile—including our formal risk assessment for them—with other grantmakers.
     
  • True online collaboration to better understand risk. Knowing our own tolerance for risk (Thanks Open Road Alliance for the Risk Management Toolkit) and then together, with a grantee, assessing the uncertainty and risk of a grant —understanding the context, the possible challenges to implementation of activities and a potential partner’s governance and financial controls, and more—by necessity requires discussion and the sharing of a lot of information. Our system will need to facilitate collecting information from potential grantees via an online portal—but more than that, we want to make sure that it allows staff to be truly helpful and tailor grants with the greatest likelihood of success.  We need to be able to pre-populate information that we already know (for instance, through information from another partner). If the materials submitted aren’t complete, we need to be able to have a real dialog to work together to complete them and to see in the system where we are in that process together.
     
  • User-friendly online portal and grantee workflows. We need to be able to collect not only risk assessment information but discuss ongoing financial and activity progress. It’s important to us that we can do that easily online together, with a system that works intuitively even on slow internet speeds and for users who may not be native speakers of English.
     
  • Detailed grant monitoring and payment workflows. For our grants to newer organizations with a shorter grants management track record we need to make the payment and approvals process transparent and predictable. The system must be able to track payments, requirements and approvals in detail, and let all involved easily see what’s been paid and what is still to come and when.
     
  • Multi-organization approval of grant reports. In the grants management model that we’ve defined, the Accelerator staff will do day-to-day grants administration, but CIVICUS staff manage the grants program. They will need to easily view and approve progress reports from grantees.   This means the system will need to support CIVICUS staff’s ability to easily see what they need to review without wading through a lot of extraneous information.
     
  • Adaptive grants management that tracks both formal and informal feedback.  True collaboration with a grantee involves more than just structured reports.  The system should let us share feedback, make changes to activities, deliverables and agreements. The platform should capture call logs, site visits, and other interactions. It has to support processes for addressing issues raised by grantees and conducting more formal evaluation down the road.
     
  • Internal and external reporting. To close the collaboration loop, we need to be able to easily
    generate reports—to allow CIVICUS and the Accelerator to understand the status of grants and grant cohorts, to provide status back to donors and to the international aid community as a whole through publication of grants via IATI standards.

We’ve taken to heart the challenge raised by our friends at Thousand Currents and written about by Jennifer Lentfer at How Matters. She challenged us to develop a process and platform that is genuinely grantee-centric and shifts power. A platform and process that is responsive, flexible, aligned with grantee strategies, tolerates risk, supports collaboration, acts on feedback, supports quality dialogue, focuses on long-term outcomes. With this platform we are figuring out how to do that at scale. Once we move to the next phase of platform development we will work with a range of users to collect their feedback and ensure the system meets their needs.

And finally, perhaps more important than any specific requirement, we’ll need a system that will allow us to start small and build out over time. In keeping with our iterative development approach we plan to roll out an alpha version of the system for just a handful of grantees, and need to be able to do that without breaking the bank. At the same time, the system needs to be able to scale with us to be able to handle many more grants and grantees over time. We know that some of our future needs won’t be completely typical, so we need a vendor partner who’s willing to build features for custom needs in the future.  

What vendors did we consider? Who did we end up choosing? Stay tuned for the next post.

Saving mangroves, one of the world’s most carbon rich habitats, requires evidence and market driven solutions

We launched the Social Sector Accelerator to seek out, design, and test market-driven and evidence-based solutions to the world’s most pressing social and environmental challenges. We’re excited to announce the launch of our Blue Forests Initiative, an effort to combine advances in behavioral science, innovative finance, and the conservation of one of the world’s most important habitats: mangroves. Here’s why:  

  1. Mangroves sequester carbon at a rate 4 to 5 times higher than tropical upland forests. They store some of this carbon in the vegetation, but most of it is stored in the soils in which they are rooted. Mangrove soil is inundated by tidal water that defines mangrove habitat, but if you reach down and pull out a handful of that soil, you find that it is more like a dense, black paste than like the clay or dirt you might find in your backyard. In healthy mangroves, you can literally feel the carbon in this soil, granular and elemental. Some mangroves in the Dominican Republic store over 1000 tons of carbon per hectare, equivalent to almost 4 tons of CO2.
  2. Mangroves also provide essential habitat for fish. For many species of fish - including those of interest to commercial and artisanal anglers, sport fishers, and scuba divers - mangroves are the “nurseries of the sea.” Mangroves provide protection from predation for young fish until they grow large enough for the journey to a coral reef or the deep sea. Even today, scientists working in mangroves continue to identify new, previously unidentified fish species. Local fishermen of course, are well aware of how important the mangroves are to their livelihood; in places where mangroves are being removed it is common to find conflict between fishermen and those doing the removing.
  3. Mangroves stand in the transitional zone between land and sea like mediators protecting the terrestrial from the aquatic, and vice versa. As rainwater carries sediment or chemical runoff from agriculture or other human activity towards the sea, much of it is filtered out as it passes through the mangroves before it reaches the water, protecting essential marine habitat for coral, fish, and human use. Mangroves could be considered the “kidneys of the coastal landscape” as they remove impurities and make life possible.  Ever impartial, mangroves also protect the land and those living in coastal areas from storms. As storms surge, mangroves blunt their blow, limiting flooding and damage in coastal communities. And as sea levels rise, mangroves help to dramatically slow erosion, limiting the amount of land reclaimed by the sea.

So, this is what we know:

  • Mangroves sequester carbon at an astonishingly efficient rate.
  • They are essential for the health of fisheries that much of the world depends on for food.
  • And they help coastal communities to weather violent storms and rising sea levels.

Unfortunately, we also know this:

Around the world, mangroves are being lost at a higher rate than the Amazon and other upland forests. For all the well-placed concern about terrestrial deforestation, mangroves are being lost at a rate of approximately 1% a year while their upland counterparts are lost at much lower rates. As far as carbon impact goes, the deforestation of mangroves results not only in the loss of their sequestration abilities, but also results in the release of the carbon that has been stored in mangroves for perhaps centuries. Furthermore, as is the case with upland forests, the alternate uses of areas previously covered by mangroves such as shrimp and salt ponds and cattle grazing land tend to be sources of greenhouse gases. The net change can be enormous.

Our task then is to develop approaches to mangrove conservation that are replicable and cost-effective. We then need a business model that enables private investment, tapping into the vast sums of capital searching, with limited success, for worthy investments in conservation. And, given that well over half of the world’s mangroves have already been deforested, we must devise a similar approach for their restoration.

Uncovering these approaches requires experimentation. Current efforts have been characterized by a mix of educating landowners and communities about mangrove benefits, government regulation and the establishment of protected areas, and, in the case of restoration, replanting campaigns. Demonstrable impact is hard to come by though, in large part because these interventions rarely consider the motivations behind deforestation or effectively incentivize different behavior, and governments, in most of the countries with mangroves, lack the ability to enforce protections. Because mangrove ecosystems are resilient, their restoration should be relatively simple; unfortunately, replanting campaigns often fail to first reestablish the hydrology mangroves require and thousands of young plants end up dying. Furthermore, because these interventions lack a well-defined methodology, they are difficult to replicate.

As in all our work, our Blue Forests Initiative prioritizes cost-effective, measurably impactful approaches for several reasons:

  1. Evidence-based approaches are easier to scale. Evidence based approaches prioritize isolating the variables of success. By isolating the variables, the approaches tend to be more persuasive to policymakers who need something more than just good intentions to guide where they direct scarce resources. For this reason, we also tend to favor simple interventions where isolating variables is simpler, because we find that they tend to be easier for people in other places to scale.
  2. In a world where climate-change mitigation and adaptation are going to require far more resources than are currently available, we need to make every dollar count. We must implement approaches and activities that get the biggest bang for our buck. Isolating costs and determining the cost-effectiveness of an intervention is often overlooked but essential. For this reason, mangroves are ideal sites in which to work
  3. Sustainable conservation is complicated in a world where immediate human needs are often in tension with the need of future generations for healthy of ecosystems and livable climate. We need to approach our work with humility and curiosity, and in a way that allows us to experiment to learn what works best. This is especially true when we’re talking about interventions that rely on shaping human behavior. If we’re going to encourage landowners and communities to conserve and protect mangroves for both themselves and for future generations we must incentivize alternate behaviors and offset economic losses.

In partnership with the NAMA-Facility and the Government of the Dominican Republic, we are working toward the launch the world’s first Nationally Appropriate Mitigation Action (NAMA) that includes mangrove conservation and restoration at a national scale. To accomplish this, we will apply a decade of research into conservation approaches to assist the Dominican Republic to achieve their sustainability goals in a changing climate. We will accomplish this through conservation and restoration to achieve greenhouse gas emissions reductions while enhancing the sustainability and productivity of coastal communities and ecosystems.

In terms of conserving existing mangroves, we are experimenting with:

  1. Cash payments to landowners or local communities conditioned on their conservation of existing mangroves. As far as we know these payments have never been tested for mangroves before, but a similar approach used to protect upland forests in Uganda proved to be highly cost effective. In Ghana it was found that cutting deforestation rates in half and the resulting costs of delaying the release of that carbon amounted to payments of $0.46 per ton of CO2. Given their simplicity and relatively low cost, cash-based approaches are highly efficient, and are hard to outperform with more complex interventions.
  2. A more traditional, education-based approach. It is important that landowners and coastal communities living near mangroves understand the benefits mangroves provide, the long and short term impacts of their actions on mangroves and what they can do to conserve them. This is why, wherever possible, we work with high schools, universities, and other local actors to teach youth about mangrove ecology and give them hands-on experience with carbon sampling and monitoring.
  3. A combination of cash and education. Our bet is that cash payments can be effective for mangrove conservation because they provide landowners and communities with a tangible incentive to change their behavior and offsets the opportunity costs of mangrove destruction for shrimp farming or grazing land for cattle. However, we think that a simple, easy to replicate education protocol will provide an additional benefit at relatively low cost, while also making the work more sustainable long-term.
New black mangrove growth. Photo: H. O'Donnell

New black mangrove growth. Photo: H. O'Donnell

For its part, mangrove restoration may be more complicated than conservation. Finding a cost-effective solution is nonetheless critical for future generations of coastal residents, so we will be experimenting with a similar strategy of education and incentives for managing restored sites. Again, finding ways to minimize costs to ensure cost-effectiveness will be essential as we refine our approach and develop a financial model to ensure sustainability of impact. As we go, we’ll be working on a framework to help policy makers select the most cost-effective sites for restoration to maximize the return on their investment – whatever its form. 

Experimenting in this way will help us uncover what works and quantify our impact not just in terms of carbon, but for other ecosystem services such as fisheries and storm protection as well. Quantifying impact in this way can help us to monetize the resulting ecosystem services, and develop creative ways to support the scale-up of this work throughout tropical coastal ecosystems over the long-term. This can help countries and even communities participate in the global carbon markets of course, but it may unlock even more creative solutions as well. We will model the economic benefits of increased height, density, and coverage of mangroves as storm buffers for infrastructure such as hotels. This may create an opportunity to insure their conservation and even restoration, similar to what The Nature Conservancy and Swiss Re have done with coral reefs. We expect that demonstrating the impact on fisheries will present similar opportunities.

Our Blue Forests Initiative has started in Dominican Republic but are hungry for opportunities to expand to other places – particularly other Small Island Developing States (SIDS).

The Social Sector Accelerator was formed a bit more than two years ago by its parent organization, Counterpart International. Counterpart has worked with Dominican coastal communities, community based, national and international non-profit organizations, academic and government institutions for nearly 15 years, on everything from sustainable agriculture in the hills to coral gardening in the sea. In building on Counterpart's work, the Accelerator’s mission is to find new business-models to support conservation and sustainable development – business models that are themselves sustainable and do not rely on grants. We’re experimenting with impact bonds, pay for results approaches, and other financial mechanisms. Working at the intersection of science and development we prioritize quantifiable measures of social and environmental impact. If evidence of impact is important to you, we’d like to talk with you as well. We’re always interested in helping others think through their own experimental approaches and learning, and to hear their thoughts on ours.

We hope you’ll get in touch – Hugh O’Donnell, Associate Director: hodonnell@counterpart.org.

Do Capacity Building Programs Help Nonprofits Achieve Better Results?

If you know me or have worked with me before you know I like to plan. It is so part of my personality that even on vacation my kids wake up in the morning and ask what’s the plan for the day. So, imagine how I must have felt two years ago when I became the Executive Director of the Social Sector Accelerator. All the planning was ahead of me to deliver on our mission to increase investment in the social sector, improve partnerships – particularly between local actors and their supporters – and provide support for strong, resilient and impactful nonprofits.

In addition to the countless lunches, coffees, roundtables, focus groups and other opportunities for feedback and discussion I engaged in I also dug into the evidence on the impacts of capacity building on organizations. I dug into the link between the wider theories of capacity development and building strong, resilient nonprofit organizations capable of achieving impact in their communities and on the issues they tackle every day. Answering these two questions is important to us at the Accelerator. We believe that any measurement of the impact of investment in strong organizations should ultimately come back to demonstrating the additional impact organizations are able to achieve after receiving this kind of support.

In all our research, we found 3 challenges to making sense of the evidence:

  1. Capacity Building Divorced from Results

Last year we worked with a team from IO Sustainability to look at what the literature had to say about linking organizational strengthening to mission impact. Of the 50 studies we reviewed just one started with the question – “What skills, capacities are needed to help us achieve our mission? How will we build those skills and capabilities” The rest of the studies we reviewed made the assumption that stronger organizations lead to increased impact. But this was left as an unexamined assumption.

The results of this dive into the literature left me feeling very dissatisfied. Why do we do what we do if not to make people’s lives better, their communities safer or increase access to quality education? If organizations are focused on those types of measurable results then why aren’t investments in organizations focused on helping groups achieve the durable results they define?

  1. The Forgotten Roots of Capacity Development in the Movement for Ownership and Empowerment

Besides diving into the literature on evidence of impact we also spent time reviewing our own approaches for supporting leaders, organizations and networks. Our practice emerged (and it truly emerged – our parent organization Counterpart International developed its theory of change after over 50 years of working in communities around the world) and was grounded in community led development. When we focused our attention on supporting organizations and networks we built an approach that emphasized their ownership and leadership of the process.  Our role was to coach, support, mentor where necessary – but never to lead.

Much of the current language and practice around capacity development seems to have forgotten the roots of the capacity development movement of the 1980s.  Capacity development as a practice emerged from the dissatisfaction with externally led, paternalistic, technocratic support offered by donors and Western nations. The lack of results achieved through an expert led model led to the emergence of a new way of working where leadership of change and the definition of results was in the hands of the countries and organizations doing the work.

While some of the existing programs, tools and approaches still prioritize experts and prioritize investments in groups disconnected from the communities they serve, I was heartened by the discussion taking place around Kathy Enright’s blog post on redefining effectiveness and the comments from Vu Le in his post. Who is defining results anyway?

“The ability to assess and achieve results does not mean that an organization is inherently effective – especially if program models and theories of change are rooted in false narratives about the causes of inequity, or if the results are not those most desired by the people and communities being served.” – We Need a New Definition of Effectiveness – Kathy Enright – GEO Funders

Investments in organizational strengthening have to begin with an organization led formulation of the results they are seeking in their programs and related to their mission.

  1. Tools, Tools, and more Tools

When social change issues are complex, we can sometimes default to creating a set of tools to make sense of them. We are not the only sector that falls into that trap. One set of resources that I didn’t find lacking was the plethora of tools available to organizations and foundations who want to improve the way they function. Thanks to the Hewlett Foundation team and their colleagues at Informing Change for putting together an amazing list of all the tools they could find.

While we may be swimming in tools there are several significant gaps –

  1. Overall the tools were weak on measuring commitment and practice related to diversity, equity and inclusion.
  2. Most had weak measures of accountability especially towards clients, beneficiaries and community.
  3. Few were accompanied by a strong statement about commitment to process that prioritizes ownership and empowerment.
  4. Most, besides the great Leap of Reason Performance Imperative tool, had weak links between organizational strength and results measurement.

The old adage remains true – we measure what we care about.

As a result of our research, discussions, experimentation and after spending two years with our own programs and their data and the programs and data of colleagues in the Grantmakers for Effective Organizations community we’ve come full circle on the discussion of organizational strengthening.

We believe that properly supported capacity development is itself important because it places local organizations at the center of the solution. We think this makes for greater impact, but more importantly believe it is the right thing to do.”

We are convinced of the importance of inclusive and participatory design and planning of organizational strengthening interventions. A successful intervention must demonstrate that stronger organizations can achieve greater impact. Its only by clearly defining and focusing on a shared understanding of results that we can have any hope of learning what does and does not work in our quest to build strong nonprofits.

I am happy to say that after two years we, at the Accelerator, have a much stronger plan. We are coaching foundations to adopt a capacity building mindset and provide more relevant support to their grantee partners. In February 2018, we are hosting our first Organizational Strengthening Design Workshop. We will be building on the concepts laid out above to help foundation leaders build a useful and impactful program. We are building a cohort of peers leading programs in their foundations to reenergize people around building strong, resilient and impactful organizations in the social sector.

This post originally appeared on Beth Kanter's site, and was written by the Accelerator's Executive Director, Teresa Crawford

Unlocking the Right Investment in the Social Sector

At the Social Sector Accelerator and CIVICUS World Alliance for Citizen Participation we spend a lot of time thinking about how more financial resources can flow to organizations and individuals that are focused on social change.

One of the goals of the Social Sector Accelerator is to increase the flow of social investment that reaches civil society organizations. One conduit of social investment is from grants from foundations. The width of this pipe depends on ability of foundations to identify partners that share their values, vision, and can deliver on the social impact they promise.

Similarly and as articulated in our new 2017-2022 strategy, at CIVICUS we are focused on the changing resourcing landscape and the need for greater equalization of civil society funding between north and south, particularly at the grassroots level.

Most organizations still rely heavily on the expertise of their program officers and formal and informal networks of advisors to give them feedback on potential grantees.

Last year together we reviewed 50 different donors and platforms undertaking ‘partner qualification’ – the process by which they determine whether a nonprofit makes a sound partner.  We have a shared goal - to enhance a network’s  members’ (in this case CIVICUS) access to resources from donors and international non-governmental organizations (INGOs), plus find collaborators for their projects and programs. Their theory is that qualification is a precondition to expanding their members’ access to resources.

Through the review process, we culled several lessons about current the practice of qualifying organizations for funding – and have identified an important gap that needs filling.

First, the gap is not around the basics of qualification.  Every platform or donor we reviewed relies on one of three things to aid them in basic qualification -

  1. an external database or registry,
  2. an external service or
  3. documentation of legal registration and matching bank account information provided by their grantees.

This includes the United States  Internal Revenue Services registry of organizations with tax exempt status or third-party services which issue equivalency determination letters (certifying non-US organizations as equivalent to a US-based tax exempt organization). Similar tax exemption models are emulated in other countries, as well.

But beyond basic verification of an organization’s status (such as tax exemption or banking status), few donors or platforms have automated the more substantial parts of their partner qualification process. This is still a largely manual process – as described below- and limits their ability to gain efficiencies, qualify more partners, or help applicants learn through the application process. 

Two platforms – DonorsChoose and Global Giving – are exceptions: they have rapid verification processes supported by technology that enable them to dig deeper into a potential partner’s values, impact, or alignment to a donor’s funding priorities.  DonorsChoose has gone the furthest in capturing and using data to increase automation of the qualification process. They are qualifying over 350k grants per year on their platform and they expect to double the number of projects on their platform in 2017. Global Giving has built a robust system and uses Amazon Turk to streamline one aspect of their process.  Using Amazon Turk they turns components of their process into micro tasks which can be outsourced to reviewers around the world at a fraction of the cost thus freeing up their grants officers to focus on verifying the fit of organizations with their values and gaining insights into impact.

What are the other platforms using?  One group crowd-sources input – relying on users to flag organizations using the platform who do not meet minimum requirements. This is similar to how Facebook relies on users to report organizations or posts that do not adhere to their terms of service. Another, NGO Source, has created a service for grant makers to verify that organizations are equivalent to a US 501c3. This solves one part of the qualification challenge but doesn’t go far enough. And in some ways it goes in a direction that’s not most pertinent to organizations who are not necessarily operating according to US tax compliance frameworks, and never need to. With the rise of global philanthropy, US tax equivalency is but one dimension of qualification.

Most other platforms we reviewed rely on a basic technology infrastructure and the human resources in their grants and programs offices. Most organizations still rely heavily on the expertise of their program officers and formal and informal networks of advisors to give them feedback on potential grantees. Others have formed consortiums that allow them to tap into the networks of consortium members. In some cases these human powered processes can take up to 18 months to qualify a new partner. Those who move faster do so by limiting the number of potential grantees qualified.

Overall, we have identified a solution that deserves attention – using business intelligence tools and technologies to gather and share information on organizations applying for funding. We believe this can go further than all of the approaches above to unclog the qualification bottleneck and increase the number and diversity of groups who receive funding.

How can a business intelligence approach improve qualification? It allows five things to change:

  1. Move beyond reliance on legal registration and bank account documentation - given the politicization of civil society in some parts of the world we have to move beyond reliance on registration and bank account confirmation. In some countries, it takes months if not years and thousands of dollars to register, receive tax benefit status and secure a bank account. For some groups registration is impossible because of the type of work they do.  How else might we satisfy ourselves that an organization is doing what it says and will spend the funds we give them in a way that matches our expectations? There are approaches to gathering business intelligence information used by the private sector to manage risk that helps them understand their supply chain partners. What information could we gather from publicly available data sets such as those now available because of IATI (International Aid Transparency Initiative)? What information is available via social media platforms about organizations and their work? What does their Twitter feed say about them? Could we decentralize and place more money in local institutions to regrant? Many national organizations have a greater knowledge of which organizations are legitimate? Could we loosen our requirements to give to organizations and give to individuals?
     
  2. Take advantage of shared data to aid rapid qualification - could we take better advantage of shared resources such as the Bridge Registry? The Registry, a partnership between GlobalGiving, TechSoup, Foundation Center and Guidestar, assigns numbers to organizations that have been vetted by consortium members and allows others to see which organizations have been vetted by which consortium member.  For example, Counterpart International, the Accelerator’s parent organization, has been vetted by Guidestar, Foundation Center and TechSoup. Bridge numbers could form the backbone of a decentralized system that other organizations use to create, maintain and share organizational records. Using newly available data from grantmakers on their grantees we could collect and analyze existing investments in organization and use that as a basis for qualification. For example, if 5 foundations have already made grants to an organization what additional questions might we ask to satisfy ourselves that this is a qualified group? How might we place greater emphasis on values and impact while also automating some of the analysis?
     
  3. Improve our data collection to gain insights - How might we mine our grantmaking data to improve the qualification process?  DonorsChoose is using Looker to capture data from ‘no’ answers to applications so they can more quickly give teachers feedback on what part of their application did not meet their criteria and provide them supports to reapply successfully.  Ashoka has taken a community based approach to address this same issue.  Applicants to their ‘Challenges’ who are not successful have access to the community of all applicants - including winners - who help coach them to a successful application. 80% of those who were unsuccessful in the first round are successful in the second round. How might grant makers mine the data from thousands of their ‘yes’ and ‘no’ decisions to improve the quality of applications they receive and support grantees to develop successful applications? What if they shared information on their yes and no decisions across their organizations? Michelle Granias, CEO of Peak Grantmaking, predicted the move towards this new operating model in 2015 in her article Predictions and Possibilities; Grants Management in 2025
     
  4. Lessen the repeat burden on CSOs – Could we ‘de-risk’ donor investments and help to rebalance the power dynamics between donor and grantee by lessening the burden on grantees? We could create an online briefcase or profile that any organization around the world could use to store their relevant documents and begin to build out their organizational record with reviews from donors, staff, beneficiaries, partners. This moves beyond the Guidestar profiles to a credit report for civil society organizations. While new organizations might begin with a thin file based largely on the reputation and relationships of their founders, board and staff they could build their ‘trust credits’ over time. Donors of all types could use this profile as a starting point when determining the organizations match and qualifications to receive funds. Non profits would save time repeatedly submitting the same documents and focus more on demonstrating value and impact and accessing investment.
     
  5. Develop new lean approaches to getting at values and impact, and scale- everyone we interviewed was dissatisfied with the current approaches to understanding the values of the organizations they were funding and approaches to understanding the impact the organizations were realizing.  Some organizations such as Charity Navigator are well on their way to providing a standard for governance and financial values. Other organizations such as GiveWell have developed strong approaches to getting at impact but their efforts are largely confined to the health sector and because of the cost and length of time required for their process they can qualify a limited number of organizations in a year. At the very least we could be asking groups to describe the ways they are measuring impact of their work, what impact measures they are tracking and how they are/are not adjusting their approaches based on what they are learning about their impact.

Better use of technology is only part of the answer and still does not address the challenge of getting funds to newer, smaller, less well resourced organizations. We believe every platform or donor should implement a diversity policy or fund whose aim is to get more organizations ‘investment ready’. The most recent complete statistics from the Foundation Center are available for 2013. In 2013, US foundations made almost $6.4 bil in grants for international causes with $2.5 bil to organizations outside the United States. 44.8% went to organizations in Western Europe leaving just 55.2% for the rest of the world. Only $185 mil or 7.4% went to neighbors in Central and South America. How much more money and how many more organizations could receive funds if we could make the system more efficient, equitable and accessible? How much greater impact could be realized by the philanthropic community?

While DonorsChoose could spend more of their time and money automating more and more of their process they will always prioritize staff time spent getting underserved schools and school district successfully using the platform and securing donations. The Ashoka ‘re-application’ pool is one way to lessen the burden on applicants and improve the quality of applications. Providing other donors access to ‘rejected’ proposals is another way – an application that wasn’t successful to Macarthur Foundation’s challenge might be a great application for another donor with different criteria or priorities. More foundations and funding platforms should be asking themselves how they could be getting more of their grant funds out to grantees in a way that lessens the burden on organizations and diversifies their pool of potential grant recipients.  Shared solutions for the sector and better utilization of tech enabled partner qualification are two possible ways.

As a follow on to this research we are working together  to improve grant making capacity and together we are experimenting with new approaches to qualify partners for grants. In the next few months we will be learning out loud through that process and sharing additional blog posts about our efforts.

*This blog was co-written by Teresa Crawford (@capdividend) at the Accelerator and Alex Sardar (@alexsardar) at CIVICUS

How will we know what kinds of investment in organizational strengthening lead to increased mission impact?

In 2016 we supported community leaders in Zambia to organize a series of community-government dialogue forums to surface issues and advocate for improved health and education services. Our team supported community leaders to conduct citizen outreach and formulate shared concerns. The dialogue led to the provision of new and more accessible health services.

What I love about this story is that it speaks to both our values and the effectiveness of an approach based on the empowerment of local leaders. In 51 years of working to ensure that citizens have a voice in the decisions that impact their lives, Counterpart’s approach has always reflected our belief that those living in a community are the ones best positioned to create meaningful, lasting social change. We also recognize, though, that while local leaders have the best ideas for bringing about change, they do not always have the tools, resources or relationships they need to be successful. This is why our mission is to help other organizations achieve theirs. We’ve built an organization dedicated to helping others strengthen their organizations, build networks of allies, and broaden their funding sources. Community leaders in Zambia knew better than we did how to solve their healthcare access challenges; we just helped them smooth the road so they could get there more quickly.

We believe this sort of “capacity building” is one of the most important things donors, foundations, other philanthropists, and global development organizations like ours can do to help our partners around the world bring about meaningful and lasting change. But over the last few years, we’ve increasingly been asking ourselves how to prove the value of this sort of support to convince others to join us in this work. How can we demonstrate that organizations we work with are actually stronger as a result of our partnership with them? What metrics can help us learn what approaches achieve the outcomes we seek?  What impact does our support have on their social impact? How are the communities where they work benefiting?

In 2015  we took a deeper look at our own data and developed a “Scorecard” for partners who had received capacity building support from us. From 11 countries 123 partners responded, and of those organizations Counterpart worked directly with (versus an affiliate partner), 63% noted that they saw increases in all four areas we view as important to gauging our impact: the number of beneficiaries served, the number of services offered to beneficiaries, annual revenues and the number of funding sources.

63% noted that they saw increases in all four areas we view as important to gauging our capacity building impact: the number of beneficiaries served, the number of services offered to beneficiaries, annual revenues and the number of funding sources. While these were promising results, we were left wondering, what about the other 37%?  How could we improve our approach so that all of our partners report similar success? 

While these were promising results, we were left wondering, what about the other 37%?  How could we improve our approach so that all of our partners report similar success? How could we expand the survey to get beyond the question of just whether our partners themselves are doing better after working with us, but that their communities are also benefiting from our support?

To take on these questions and improve our practice, in 2016, the Social Sector Accelerator, a wholly owned subsidiary of Counterpart, launched the “Capacity Dividend” learning partnership and worked with IO Sustainability (best known for their work on Project ROI) to study the “Capacity Dividend” – the increased value created for foundations and organizations and their beneficiaries because of capacity building support. The Accelerator decided to look beyond Counterpart to see, first, what our colleagues  in academia had to say, and, second, how our peers were measuring or thinking about their capacity building efforts.

While the existing research did a good job of describing a range of organizational strengthening initiatives and dug deeper into approaches surprisingly, we found little in the way of concrete insights or guidance from the academic research.

With our peers, it was a different and welcomed story.  Many of the most dynamic thinkers in our field were asking many of the same questions we were. In conversations the Accelerator had with 11 key foundation thought leaders from Ford Foundation, David and Lucille Packard Foundation, S.D. Bechtel Jr. Foundation and others, we found people equally passionate about moving the field forward by engaging in discussions of impact both for organizations and their missions. Packard found through surveys of their grantees that their capacity building efforts were having a “significant” or “transformational” and measurable impact for two-thirds of their grantees and were wondering how they could reach the other third. Ford Foundation launched the $1billion BUILD program in 2016, testing out a new investment and cohort model of capacity building. Lori Grange from the William and Flora Hewlett Foundation has developed some interesting insights into the conditions under which support for organizational effectiveness can be successful.

Each of these are important steps forward because in addition to providing useful insight into strategies for building stronger organizations as a valuable goal these leading organizations are also interested in learning how capacity building contributes to greater impact for the communities their grantee partners serve. This is critical because we seem to be at a key juncture. On the one hand foundations are increasingly seeing the value of capacity building support; on the other hand, we can’t ignore the skepticism or impatience many others have with this type of support. Anyone who works in this space has encountered eye rolls at the mention of “capacity building”, a term that suffers from sounding stale and lacking in meaning.

All of this points to the importance of evidence and data, but what should a learning agenda look like? The following questions emerged from our discussions:

  • How might foundations structure organizational strengthening initiatives to return the greatest results?
  • What is possible with a grantee-centered approach with a focus on organizational strengthening that focuses on the abilities needed to achieve a clearly defined mission?
  • What might change if foundations place organizational strengthening in the context of the larger system the groups are trying to change/effect/work within? Are there different strengths to be built for different organizations within the system? ? 
  • How might we measure the impact of organizational strengthening support on organizations and their ability to achieve their missions? What do we measure?
  • How might we determine “predictive indicators of success” – a small number of predictive indicators that allow quick analysis of whether organizations need additional strengthening to be effective?

We’re not only asking these questions to improve our own work, but also to move the field forward with a deeper understanding of the Capacity Dividend. As one of our peers explained in our conversations, nonprofit executives need their funders to move from prodding them with whatever is de jour in SSIR to providing them with evidenced based support that will help them do their work better.

*Stay tuned over the next few weeks for our announcement of a Organizational Strengthening Design workshop planned for February 2018 where we will put some of this learning to the test.

Constructing an Impactful Organizational Strengthening Program

Over the past few years, foundations of all types have embraced “capacity building” for their grantees as a core part of their strategy for generating social impact. Their strategies include providing a range of supports for their grantee partners from add-ons to existing program grants to larger scale organizational strengthening programs. What these foundations all have in common is a belief in something we call a “capacity dividend”: the notion that investments in their grantee partners’ capacity offers “returns” in the form of greater efficiency, effectiveness, and ultimately greater social impact.

But how does this understanding of the power of ‘capacity building’ change for foundations that have an outsized influence in their community? Does being the primary funder in a particular domain or location come with special responsibilities? Should this dynamic change a foundation’s investment strategy?

“Capacity building is “the funding and technical assistance to help nonprofits increase specific capacities to deliver stronger programs, take risks, build connections, innovate and iterate.”

— Grantmakers for Effective Organizations

The Accelerator team is working with the Paso del Norte Health Foundation of El Paso, Texas to develop options for them to expand the already robust capacity building they offer the nonprofit community in their region to include support for staff at all levels. Their hope is that by reaching deeper into the nonprofits they support, the services those organizations offer will have a greater impact in the community and will be less vulnerable to the disruption that can occur when leaders transition. What’s remarkable about PdNHF’s approach, however, is that with each iteration of their capacity building program they have sought to provide value for the broader nonprofit community– extending their reach beyond merely their own grantees to be major players in cultivating a robust community of dynamic nonprofits in their region.

PdNHF operates in a challenging context: El Paso once struggled with “brain drain” as young people left the region seeking different and better paying jobs. In 2015, the U.S. Census Bureau reported that the city of El Paso had the highest rate of domestic migration in the United States. This trend appears to now be slowing, but has been a challenge for leaders of all types of organizations – perhaps especially for nonprofit organizations, a group typically reliant on people with deep connections to their community. Furthermore, the region lacks much of the nonprofit support infrastructure that exist in other cities. There was once a vibrant Nonprofit Enterprise Center that provided training and other resources to nonprofits in the region, but it faced some struggles of its own and is now gone. There used to be a consulting group made up of some of El Paso’s most dynamic nonprofit leaders, but that group has been dormant for some time as each of its members took on new leadership roles in the nonprofit community. Add to that dynamic that PdNHF is one of a handful of large-scale donors in the region and the challenge facing the Foundation becomes clear.

Fortunately for the region, PdNHF recognizes these challenges and has demonstrated its commitment to playing a major part in providing nonprofit leaders and their teams the support and resources they need to best serve their communities. As they do this, we’re working closely with PdNHF to define the impact the foundation and their partners hope to achieve and tailoring the capacity building program to help them achieve those goals. With their capacity building support, they aim to help grantees become more adaptable, design and implement stronger, evidence-informed programs, and develop and maintain strong internal structures and culture.

We believe PdNHF can best support their grantee partners and the development of the broader non-profit sector by implementing a program that is underpinned by two primary considerations. The first is to prioritize catalytic investments in the organizations whose missions and activities most closely align to PdNHF’s goals. PdNHF’s goal is to lead, fund, promote and leverage opportunities to assure that all people in its service region achieve good health. This is an important goal, and urgent in a region with, for example, a diabetes rate 27 percent higher than the national average. Thus, the value of investing in the strength of organizations with a high degree of alignment with PdNHF’s strategy to improve regional health is clear.

At the same time, however, PdNHF recognizes the challenges the nonprofit community as a whole is facing, and that strong nonprofits of all types are critical for the overall well-being of folks in their region.  So together with PdNHF, we’ve co-designed strategies for simultaneously supporting these organizations and strengthening the region’s nonprofit support infrastructure. To do this while not becoming distracted from their primary mission is the trick, though, so we’ve developed strategies designed to create efficiencies and leverage the support going to their core organizations. When a consultant is flown in to work intensively with a PdNHF grantee on developing evidence-informed programming, that same consultant may also offer a workshop on Lean Data during their time in El Paso that is open to all nonprofits, and a separate, private training for local consultants so that they can continue to offer support on an ongoing basis.

Much has been made about major foundations that are dedicating increasing resources to capacity building. Ford Foundation, for instance, recently launched the BUILD program, which will provide approximately $200 million a year for organizational strengthening efforts, in addition to including at least 20 percent overhead funding in every project they fund. Packard Foundation has invested over $150 million in almost 3,000 organizational effectiveness grants to their grantee partners.  While those foundations certainly deserve the applause they are receiving, we are hopeful that they are part of a bigger trend that includes everyone from large international grant makers to smaller place-based foundations, like PdNHF. We’ve taken great inspiration from our work with the folks at PdNHF, and hope others do too.

 

Building a Capacity Building Program with a Purpose

The Accelerator team has spent the last several months working with the staff of the Paso del Norte Health Foundation to explore options for a foundation supported program to support their grantee partners in the El Paso region.

We are spending the week with foundation and partner staff to explore the challenges and opportunities to building organizations that can weather changes in their operating environment. In what ways can increased capacities and capabilities deliver improved health outcomes in their communities? What key capacities do they need to be more resilient? How can they improve their impact through increased use of data and experimentation?

Using design thinking approaches we are helping grantee staff identify their key staff knowledge, skills and capability needs. Using 'What's on Your Radar' with a range of organizations and staff is helping us identify areas of shared need and opportunities for collaborative skill building.

Prioritizing key knowledge, skills, capabilities that would improve their impact

Prioritizing key knowledge, skills, capabilities that would improve their impact

We built a Capacity Building Strategy Game to help foundation staff achieve alignment around the Purpose of the support they want to provide, the range of Activities or ways they might go about achieving that purpose and the Impacts they would like to see achieved. Will there be agreement between what the foundation thinks the purpose should be and what their grantee partners think? In what areas is there agreement and in what areas is their divergence?

Coming to agreement on Purpose, Activities and Impacts with Paso del Norte Health Foundation

Coming to agreement on Purpose, Activities and Impacts with Paso del Norte Health Foundation

Our work with Paso del Norte Health Foundation is part of our work promoting, understanding and developing the 'Capacity Dividend'. How much greater impact could an organization have if they and their funding partner invested in increasing their capacity and capabilities? What skills and capacities are needed to create a region driven by the power of healthy living?

Measuring the Capacity Dividend

One of the values that underpins the work of the Accelerator is placing a priority on evidence. If we are going to invest in something we want to have a sense of how much impact it will have. We also want to consider if an alternative investment would pay off in a bigger way.

In 2014 , our parent organization, Counterpart, embarked on a journey to improve their understanding of the impacts of the organizational strengthening services and coaching they provide to nonprofits around the world. In any given year Counterpart's teams in 30 countries are coaching upwards of 2,500 organizations who range from informal community based groups to some of the leading non-governmental organizations in their countries. 

Counterpart wanted to know, is it possible to effectively measure the impact such "capacity building" services have? Do these services truly lead to a "Capacity Dividend" - accelerating nonprofits' ability to pursue their purpose? If so, what approaches lead to the greatest impact and under what conditions? 

To get at these questions Counterpart conducts a biennial survey with the organizations it has provided services. While the data these surveys has generated supports the notion that capacity building is a smart business decision, it is not enough to truly evaluate impact. In addition to strengthening its own internal learning capacity and gathering regular feedback from the groups they support, Counterpart tasked us in the Social Sector Accelerator - Counterpart's innovation arm - to "learn out loud" with our peer intermediaries and foundations in the Grantmakers for Effective Organizations community.  

As a first step we partnered with IO Sustainability last year to conduct a landscape analysis of existing research on the impacts of capacity building on organizational strength and social impact. We reviewed research from nearly 60 academic, think-tank, and thought leader sources published after 1990. We also interviewed 11 leading practitioners from both grant-makers and capacity building service providers. The research was not limited to those sources that explicitly reference "capacity building," but also included any materials related to strategies for strengthening non-profit organizations. As part of the research we held formal and informal discussions at the 2016 GEO Conference and at Opportunity Collaboration. We held a brownbag in DC and a webinar with GEO members.

Questions from GEO Members: Where do funders pull their data from - anecdotal evidence or standards?

Questions from GEO Members: Where do funders pull their data from - anecdotal evidence or standards?

What we've learned is that the existing research, both anecdotally and qualitatively, largely supports the notion that organizations that receive capacity building support can achieve greater social impact. Beyond organizational strengthening, five studies provided findings on the social impact of capacity building. In four of the studies, these outcomes are not quantified. Instead the studies make an assumption that if organizations report improved effectiveness, then it is likely that they have enhanced their mission-related impacts. The fifth study looked at capacity building for Australian nonprofits working on improving farming and agricultural processes, where the goal of the interventions was to improve their R&D capacity. The results, over a three-year period, estimated $150M in economic and social benefits vs. $20M in capacity building program costs. These studies provide promising insights into how we might structure programs to better measure both organizational strengthen and mission impacts.

Unfortunately, on the whole, the review unearthed a lack of robust empirical research linking capacity building support with improvements in measures of organizational effectiveness, and even less research linking capacity building with greater social impact. We know Counterpart and other donors, foundations and non-profits need stronger evidence that investments in capacity building - instead of or in addition to - other forms of support pays off.

The landscape analysis suggests that the question is not whether certain types of capacity building are better or worse than others. Rather, the question grant-makers and nonprofits should ask is what kinds of capacity building will achieve the desired outcomes and optimize mission-related impacts.

We are taking what we've learned and applying it to our work. Next month we are starting work developing capacity building program options for a healthcare foundation. Each program option will include suggestions for how the foundation and their grantees can generate evidence of both organizational and mission impacts. We are also thinking about new ways to systematically measure the impact of our own capacity building efforts. More on this to come, but let's just say it has something to do with comparing ourselves to cash.

In the spirit of sharing you can find more on our Capacity Dividend research here:

If you will be at the GEO Funders Learning conference in Chicago in May and want to geek out over organizational strengthening and impact let me know.