Grantmaking Strategy

Supporting Organizational Strengthening (SOS) Self-Assessment Quiz

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Looking Back on 2018 and Ahead to 2019

At the Social Sector Accelerator, we're heading into the new year like


2018 has been amazing year for our team, thanks in large part to our partnerships with many of you!  As we kick off 2019, there are a couple things we’ve been thinking a lot about that I’d love your feedback on. First, in workshops we’ve run this year, we’ve introduced a module on “capacity building as a substitution for a market.” At the Accelerator, we believe strongly that grant funding is an important tool in helping us build a better world. That said, we also know that the grant model often suffers from a shortcoming that nonprofits must manage: those that fund our work are often not the same people as those we are trying to benefit. Too often, this skews the incentive structures for nonprofits, creating a breakdown in accountability when nonprofits focus more of their attention on pleasing a donor than on satisfying those they are meant to serve.

For a company, beneficiaries are customers, and companies that fail to meet customer demands either adapt to meet those demands or they go out of business. One way we can think about capacity building is that it is designed to fill a role ordinarily played by the market. We are trying to systematically identify obstacles to customer satisfaction, develop strategies for overcoming those, and build mechanisms for learning that ensure funding and impact are more closely linked. 

The second concept we’ve been talking a lot about has been risk and return in capacity building. Where are limited funds for capacity building best placed within a community? Is it with the weakest organizations for whom the risk might be greatest but the payoff in the form of a stronger organization might similarly be greatest? Or are we better off channeling capacity building funds to organizations that are stronger and may be more able to make effective use of those resources, even if additionally, funding will be less catalytic for them? When should we throw a lifeline to a failing organization and when should we let it go? Is this typology even the right way to think about whether and when to make these investments? Where do questions of diversity, equity and inclusion lead us in the risk and return discussion? We continue to draw inspiration from the team at the Open Road Alliance who are digging deep into risks and philanthropy.

Both of these are concepts that we are still workshopping, and we’d love your feedback on them. You can always write Teresa or Hugh with thoughts or, better yet, join us for one of the workshops we’ll hold in 2019 to share in the learning with us and others there! Either way, we look forward to the conversation!

Some highlights from 2018

  1. We worked with two Kenya-based organizations, Adeso and the Network for Empowered Aid Response (NEAR). We supported NEAR to develop their Organizational Strengthening Strategy for their members based on their goals, needs of their members and past experience.

  2. Back in the U.S., with support from Methodist Healthcare Ministries, we are supporting a coalition of Texas-based health providers to improve their impact and achieve their mission to improve health along the U.S.-Mexico border.

  3. We’ve spent the year working with the team at the Resilience Initiative to better understand the types of grant maker support that help organizations improve both their organizational and staff resilience.

  4. We built and launched a new approach to grantmaking for the CIVICUS network that lessens the burdens on grantees and improves communication between CIVICUS and its partners.

  5. We continued to refine our thinking on results-based-financing, designing the world’s first development impact bond (DIB) for mangrove conservation.

Looking ahead to 2019

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For 2019, we are developing a peer learning and design workshop for domestic grantmakers looking to amplify the impact of their capacity building grantmaking. This workshop is primarily targeted at health foundations in the southern and central U.S., but the lessons we share there will be broadly applicable so don’t be shy! If you are interested in spending time with us in Austin, TX in 2019 let us know! 

Looking further ahead, let us know if you are interested in co-designing a session or workshop with us on organizational strengthening and learning, impact measurement, strategy, etc. in your area.  We need just 10 interested participants to make it work and are always happy to come to you or to host you in one of our two locations (Washington, D.C. and Portland, Oregon). 

We are also looking forward to the GEO Learning Conference in Seattle where we will host a learning ‘speed geeking’ session, introducing a range of approaches to improving our understanding of how to support stronger, more capable nonprofits.

What we've been reading

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  1. Want effective capacity building? Get rid of the incubation mentality – Vu Le shares his thoughts on a new way of thinking of capacity and where it can come from

  2. Monitoring organizational capacity development efforts -  Our friends at USAID put together a short brief on how to link improved organizational performance to project outcomes

  3. Reflecting on Innovations in Training Impact Assessment – RedR and the University of Sussex shared their results for improving understanding of how individuals learn and what impacts behavior change

  4. Community Wealth Partners and Center for Effective Philanthropy both released research on what makes for a successful capacity building program.  The CWP research on Five Elements for Success in Capacity Building findings mirror the early research from the Human Development Institute published back in 2000 .  The CEP research on Foundation and Nonprofit Perspectives on Capacity Building echo some of the same issues.

  5. Global Accelerator Learning Initiative (GALI) on Measuring the Value for Money of Acceleration. While this report is primarily about social enterprise startups, there are some interesting lessons here for how we think about acceleration/capacity building for nonprofits and how we measure the effectiveness of those efforts.

  6. amplify ii, the latest report on INGOs and impact investing (look for a quote from Hugh about why the Accelerator has not launched a fund on page 60!)

  7. And finally, for those who want to geek out on some amazing data drawn from 1800 grants and 120 interviews, an amazing report on What Facilitates [Nonprofit] Financial Sustainability from the team at LINC. We will be experimenting with regular rounds of small amounts of unrestricted funding with partners in Dominican Republic this year and discussing their efforts towards financial sustainability

We look forward to speaking with, working with, sharing with many of you in 2019.

If Grant Making Needs to Change so too Does Capacity Building

Last week, both Vu Le and Kathy Reich wrote and shared articles with lessons for how to improve the way grant makers support nonprofits tackling issues of inequality and justice. This topic is one we think about constantly in our work at the Accelerator, and these are two thinkers whose insights we invariably find valuable.

Kathy Reich leads BUILD, the Ford Foundation’s 6-year, $1 billion investment in 300 nonprofit organizations in the United States and around the world. This investment is intended to help these nonprofits become stronger, more sustainable and more durable organizations.

Vu Le is the Executive Director of Rainier Valley Corps. Rainier Valley Corps promotes social justice by cultivating leaders of color, strengthening organizations led by communities of color, and fostering collaboration between diverse communities.

In a report reflecting on a year of her work with BUILD, Kathy identifies 6 lessons they have learned thus far with BUILD.  Last week on Vu Le’s blog, Nonprofit AF, he shared his perspective that conservative foundations have been more effective than progressive foundations in achieving their objectives. This perspective was reinforced in a recent Inside Philanthropy article, How Top Foundations Failed to Defend Their Values.

While Vu is drawing lessons that can be applied to grant making writ large Kathy is drawing lessons from grant making that supports organizational strengthening. Although written separately there is an intersection between the two that caused us to reflect on our own practice and the way we support nonprofits and grant makers. 

Below I’ve lined up their lessons to highlight the overlap and why we should all pay attention. 

Kathy’s Lessons

Vu’s Lessons

Lesson 2: Grants should be significant and unrestricted.
Lesson 3: Grants should be minimum 10-years in duration.
Lesson 1: Nonprofits thrive with larger, longer, more flexible grants.

Lesson 9: Focus on the big picture and get out of the weeds

Lesson 2: Long-term, flexible grants work best when they closely align with strategy.

Lesson 1: The funding relationship must be grounded in trust and partnership.

Lesson 3: Grants like these can foster deeper relationships between grantmakers and the organizations they support—but money can’t buy trust. It takes work.

Lesson 5: At least 75% of all grant funding should go to organizations led by and serving communities of color and other marginalized communities, as reflected by their staff and board.
Lesson 6: Foundations must diversify their boards of trustees to reflect the community they serve; at least half of most foundation boards should be of color.

Lesson 4: Grants like these can work anywhere in the world.

Comment: While not an exact match between Vu and Kathy’s lessons, for grants such as those made by BUILD to work anywhere in the world what has to be in place? A diverse team? Contextual understanding? Organizations and staff with a particular set of experiences?

Lesson 8: Support leaders, movements, and institutions, not specific issue areas.
Lesson 10: Be engaged in policy and politics.

Lesson 5: Supporting institutions is critical—but so is catalyzing and supporting networks.

Comment: While Vu does not have an evaluation lesson in this post he wrote an extensive post this time last year, How the Concept of Effectiveness has Screwed Nonprofits, that bears rereading. Both patience and evaluation are important, So too is a discussion of what is being evaluated and by whom.
Lesson 6: Patience is a virtue. So is rigorous evaluation.

During a time of social, political and economic upheaval there is an opportunity for those of us who work with leaders, organizations and networks in the social sector to create new ways of working that align with our values and help to create positive change. Unfortunately, there is also the opportunity for the lessons shared by Vu and Kathy to remain lessons observed but not learned. The lessons Vu describes are not new. He traces the roots of his lessons to an article written by Karen Paget almost exactly 20 years ago.

Failing to make the types of changes Vu and Kathy argue for is to perpetuate and reinforce systems that undermine the leaders and organizations doing the lion’s share of the work to eradicate inequality. Kathy’s belief that grant makers should award more general operating support is one we share. Unfortunately, grant makers seem to be trending away from general support grants. Kathy points to a Grantmakers for Effective Organizations report that finds, “The median percentage of grant dollars awarded as general operating support has actually decreased in the last several years, remaining at roughly the same rate since the 2008 recession.”

At the Accelerator, we follow both Vu and Kathy’s work closely as we support nonprofits and grant makers. How should the lessons Vu and Kathy point to influence grants aimed specifically at organizational strengthening? If grant making more broadly needs to change, don’t many of the same reasons why apply to  ‘capacity building’ and the way ‘organizational strengthening’ support is provided? 

To reinforce the changes in grant making, at the very least, organizational effectiveness support should be: 

  1. longer term, as a general rule; 

  2. more focused on supporting organizations to achieve their mission and less in the weeds;

  3. co-designed with organizations and provided by a diverse set of technical assistance providers;

  4. understanding of the larger context and networks in which organizations work, and; 

  5. designed in a way that fosters trust and deeper relationships between grantees and funders.

Do Capacity Building Programs Help Nonprofits Achieve Better Results?

What is the evidence base available on the impacts of capacity building on organizations? 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
  2. The Forgotten Roots of Capacity Development in the Movement for Ownership and Empowerment
  3. Tools, Tools, and more Tools

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

What might a 'Learning Agenda' look like for an organizational strengthening program?

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?

Building a Capacity Building Program with a Purpose

What does a week together with foundation and partner staff look like as we explore the challenges and opportunities to building strong 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?

Measuring the Capacity Dividend

What can nonprofits and the organizations who support them expect as a return for investing in stronger organizations? Are organizations better able to achieve their missions? Are they more resilient to shocks? Do the people they serve receive better support? The Accelerator dug into the existing research to see what we could learn about the return on investments in organizational strengthening.  The blog post summarizes our findings and shares the knowledgebase of research.