By Marc Smithers, Grants Development Associate
Imagine two institutions of similar size, both pursuing grant funding for promising, mission-driven projects. At first, grantseeking falls to one or two staff who juggle it alongside donor engagement, research oversight, and other duties. They devote short bursts of effort—often one or two weeks at a time—to meet looming deadlines. While this team has won smaller grants over the years, limited investment from leadership means their capacity remains fixed and barely sufficient for their needs. Leaders may wish for bigger awards, but without intentional investment, those ambitions rarely translate into results.
The other institution, however, has won several large awards just over the last year despite having the same level of staffing as the first institution. Since this institution has established a culture of grantseeking, its leaders have aligned organizational resources, both human and financial, to ensure staff have time and support to prioritize grant activities. Leadership routinely assesses workloads and reallocates responsibilities to protect the grantseeking capacity of both frontline and supporting staff.
This disparity is common, and the reason is clear: institutions that intentionally build organizational capacity for grantseeking succeed more often than those that treat it as an occasional task. Too many organizations view grant applications as an “as-needed” project rather than part of an ongoing strategy. Those who recognize organizational capacity building as foundational can position themselves to thrive in an increasingly competitive funding landscape.
Why is Organizational Capacity Important?
In the nonprofit world, capacity building is a familiar term. The National Council for Nonprofits defines capacity building as “whatever is needed to bring an [organization] to the next level of operational, programmatic, financial, or organizational maturity, so it may more effectively and efficiently advance its mission into the future.” Organizational capacity is often a deciding factor that grant funders use to assess an applicant’s ability to successfully manage a grant award and see a project through to its successful completion. Funders view grant awards as a type of investment, both in the cause they support and in the institution to which they award funding to address that cause. Funders want to ensure that the investment they make is worthwhile, and an awardee’s organizational capacity is an important way applicants demonstrate to funders that they are a good investment for that funder to make.
For organizations seeking to expand their grant portfolios, investing first in capacity is essential. Doing so not only strengthens alignment around mission and resources but also increases the ability to pursue larger and more complex funding opportunities.
What is Organizational Capacity?
While there is no single framework for measuring organizational capacity (see Nordin, Khatibi, and Azam, 2022, for a thorough review of existing literature), there are general principles to keep in mind. These principles typically fall into two categories: resources and capabilities.
- Resources: human resources (both internal staff and external stakeholders such as boards of directors), financial resources (grants, donations, and earned income), and structural resources (facilities, technology, systems)
- Capabilities: how successfully the institution uses its resources, such as management effectiveness, innovation, and the ability to adapt to economic threats and opportunities
Just as the principles that help understand an organization’s capacity have no universally agreed-upon framework, how an organization can grow its capacity can also take many forms. Online assessments that measure organizational capacity abound, and there are various types of leadership development, financial coaching, and strategic planning consulting options institutions can utilize. Whatever the approach, the first step in organizational capacity building is for institutional leaders and key stakeholders to make an intentional commitment to give their time, attention, and, if possible, financial resources toward the overall goal of capacity building. Increasing an institution’s human, financial, or structural resources or the capabilities of these resources does not happen by accident and requires the investment of time and energy for its intentional growth.
Grantseeking and Organizational Capacity
Organizational capacity has a direct impact on an institution’s ability to engage and be successful in grantseeking. Taking the time to build organizational capacity, then, should be viewed by institutional leaders as a worthy investment of both time and energy that will pay off in future grantseeking success. Funders know how important organizational capacity is to their ability to do the best they can with their money, which is why there are several opportunities that fund capacity-building initiatives for awardees. In a future issue, we will highlight a few of these opportunities and strategies your organization can use to submit a competitive application for these programs. In the meantime, encourage those in leadership at your institution to begin the work of committing to an organizational capacity assessment. This can be one of the most effective strategies your institution undertakes to advance its mission and expand its funding potential.+