Organizational capacity has been defined by the Panel on Accountability and Governance in the Voluntary Sector as “the human and financial resources, technology, skills, knowledge and understanding required to permit organizations to do their work and fulfill what is expected of them by stakeholders.”

Building organizational capacity is a prerequisite for achieving a sustainable increase in the quantity and quality of the programs and services offered by your organization. The challenge has been to cost effectively build capacity. The most obvious solution is to increase revenue. The more revenue available, the greater the opportunities for building capacity. However, increased competition for funding, donor fatigue, and reduced levels of government support have made the acquisition of funding difficult for many organizations.

A second potential solution to building capacity is through our volunteers. Yet we all know that recruiting, training, and retaining volunteers is not a simple or easy process. In addition, more organizations are finding that fewer volunteers are taking on the increased workload. This is causing some organizations to worry about volunteer fatigue. The Canadian Centre for Philanthropy’s Highlights for the 2000 National Survey of Giving, Volunteering and Participating indicates that the total number of volunteer hours has dropped from 1,108.9 million in 1997 to 1,053.2 million in 2000, which is equivalent to a loss of about 29,000 full-time jobs.

While many organizations are doing well, there are many more that are unable to build the capacity required to deliver the full range of programs and services being asked of them by their stakeholders. And, unfortunately it is not uncommon to hear about an organization that, although it does good work, is in difficulty and unable to keep the doors open. Consequently, many managers and funders in the not-for-profit sector are spending more time in determining how to build and sustain their organization’s overall capacity.

Understanding The Key Determinants of Successful Capacity Building

Despite this trend, there is still a general lack of information about what works and does not in building organizational capacity in the not-for-profit sector. ABARIS Consulting Inc. set out to develop a definition of organizational capacity in the not-for-profit sector and develop a proprietary framework and tool, called the Performer®, to use for assessing capacity and benchmarking capacity between organizations. ABARIS Consulting Inc. tested the Performer® model with almost 20 organizations and gained valuable insight.

Each organization was provided a detailed self-assessment questionnaire that was provided to all Board members, staff and several key external stakeholders (that knew the organization well) and a series of in-depth personal interviews with staff, board and key stakeholders was conducted to validate the results. While the research captured a significant amount of information regarding the determinants of capacity building in 55 different areas, there are some key lessons learned that could be applied to benefit organizations within the not-for-profit sector.

Lessons Learned

Please note that the following lessons and findings from our research are not provided in any particular order of importance.

1. The act of revitalizing the organization’s vision and developing its strategy to achieve it is often the first step to improving an organization’s capacity. It is important to note that it is the organization’s Vision and not its Mission that is the key. An organizational Vision is a statement or description of the ideal organization of the future, while its Mission is a statement of its purpose (it may also state the what and how). The key differentiation is that “mission focused” organizations focus more on today and the delivery of their existing programs and services, while the vision driven organizations inspired stakeholders with endless possibilities for the future.

2. Manage the whole organization. This means, the revenue stream, expenses and delivery of programs and services. As an individual you probably have, (as we all do), specific areas that you prefer and have a natural comfort level with. This may be the programs or services you offer, the fundraising your organization does, its communication efforts, addressing advocacy issues or even dealing with board governance issues. Regardless of your personal preferences, we discovered that those managers who take a wholistic and proactive approach to managing their organization with an attitude of getting it done generally were more successful. In other words, we found it was worth the investment in getting good management into the organization.

3. The areas within which organizations demonstrated the greatest need of improvement included:

• Human resources – the extent to which the organization has comprehensive policies and practices. The areas of volunteer management, performance management for staff, and clarity of individual objectives (staff) stood out as key areas needing to be addressed.
• Processes – the internal processes of the organization and the extent to which they facilitate productivity and achievement of performance objectives.
• Organizational effectiveness – the extent to which the organization’s interpersonal and inter-group operations are effective; and
• Quality – the extent to which the organization uses and integrates quality management into its day-to-day operations.

 

4. While many organizations did not have the latest in computer systems and technologies, the organization’s managers did not see these areas as being a major impediment to improving their organization’s capacity in the next one to three years.

5. The Board of Directors generally had a more positive perspective of the organization than the staff.

6. The senior most staff member of the organization (e.g. Executive Director, CEO, President, etc.) generally was most critical of the organization and also was usually the most positive about the organization’s future.

Ron Robinson is the president of ABARIS Consulting Inc. He can be reached at (519) 472-9788 or rrobinson@abarisconsulting.com. This article is provided free of charge, for information purposes only and is not intended, represented or to be inferred as providing advice. ABARIS Consulting Inc. makes no warranty, express or implied, or assumes any legal liability for accuracy, completeness, or usefulness of any information provided in whole or in part within this article.

ABARIS Consulting Inc. is credited as the source on all copies, reproductions and distributions, and CharityVillage.com is credited as the original publisher.