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.