Organizational Capacity Building
A Literature Review
Saskatoon Collaborative
Funding Partnership
Second Draft
March 10, 2011
by
Loraine Thompson
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Contents
1. Introduction ..................................................................................................................1
Purpose of This Literature Review ....................................................................................................1
Overview of the Saskatoon Collaborative Funding Partnership’s Pilot Project................................1
Definitions .........................................................................................................................................2
The Importance of Capacity Building ...............................................................................................3
2. The Organizational Capacity Building Process.........................................................4
Capacity Building Models .................................................................................................................4
Stages in the Capacity Process ..........................................................................................................6
Best Practices in Capacity Building ..................................................................................................8
Barriers to Effective Capacity Building ……………………………………………………..……..8
3. The Capacity Assessment...........................................................................................11
External Assessment vs. Self-Assessment.......................................................................................11
Purposes of a Capacity Assessment.................................................................................................12
The Capacity Assessment Tool .......................................................................................................12
The Capacity Assessment Process...................................................................................................14
4. Issues in Organizational Capacity Building.............................................................15
Power Imbalance .............................................................................................................................15
Working with Consultants ...............................................................................................................17
Approaches Used by Capacity Building Consultants ...................................................................... 17
Issues and Barriers to Effective Use of Consultants........................................................................ 18
Assessing the Impact of a Consultant Intervention ......................................................................... 19
Capturing and Sharing Learning......................................................................................................19
References.........................................................................................................................21
List of Figures
Figure 2.1: Key Features of Three Models for Capacity Building ................................................ 4
Figure 2.2: The Capacity Building Process ................................................................................... 7
Figure 2.3: Characteristics of Effective Capacity Building Programs........................................... 8
Figure 2.4: Barriers to Capacity Building...................................................................................... 9
Figure 3.1: Possible Purposes of a Capacity Assessment ............................................................ 12
Figure 3.2: Example From McKinsey Organizational Grid ........................................................ 13
Figure 4.1: Approaches Used by Capacity Building Consultants................................................ 17
Figure 4.2: Issues in Managing the Funder/Consultant/CBO Relationship................................. 18
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1. Introduction
Purpose of This Literature Review
The Saskatoon Collaborative Funding Partnership has initiated an organizational capacity
building pilot project which will run from mid-March 2011 to late June 2011.
This literature review has been prepared to inform planning for the pilot project. This literature
review presents information about the theory and current practice of organizational capacity
building in order that the Saskatoon pilot project will reflect best practice or innovative practice
and will contribute to our understanding of organizational capacity building.
Overview of the Saskatoon Collaborative Funding Partnership’s Pilot Project
Four to six community-based organizations will participate in the pilot project being planned by
the Saskatoon Collaborative Funding Partnership.
A facilitator will lead each organization through a three-phase process.
• In Phase 1 – engagement – the organization will learn the details of the pilot and prepare for
participation.
• In Phase 2 – self-assessment – board and staff members will complete a self-assessment tool
that examines various aspects of capacity, for example, governance, finances, and program
delivery.
• In Phase 3 – priority-setting – each organization will review its capacity profile and identify
those aspects of capacity that are priorities for growth and development.
This process will stimulate discussion among board and staff members about capacity and draw
their attention to specific aspects of capacity. It will help board and staff to develop a picture of
what higher capacity looks like. Most importantly, it will enable each organization’s leaders to
plan for further capacity building.
At the end of the pilot, findings and results will be reviewed and the self-assessment tool and
process will be revised as needed. The resulting organizational capacity building process will
then become a permanent part of the Saskatoon Collaborative Funding Partnership’s toolbox for
working with community-based organizations.
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Definitions
In much of the literature the terms “organizational capacity” and “organizational capacity
building” are undefined. The readers are left to bring their own meaning to these terms.
Capacity – The Canadian Government’s International Development Research Centre is one
organization that does provide a definition of capacity.
In simple terms, an organization’s capacity is its potential to perform – its ability to
successfully apply its skills and resources to accomplish its goals and satisfy its
stakeholders’ expectations (Evaluating Capacity Development: Chapter 2, 2003, p. 1).
Capacity Building – Backer (2000) provides a definition of capacity building which has been
adopted by several other authors.
Capacity building involves strengthening nonprofits so they can better achieve their
mission (p. 8).
The definition above is just one of several that appears in the literature (Canadian Centre for
Philanthropy, 2001; Doherty & Mayer, 2003; Reid & Gibb, 2004; Woodland & Hind, 2002). These various
definitions of capacity building (also called capacity development) have the following features in
common.
• Capacity development is an ongoing process;
• Capacity development aims to increase the ability of an organization to carry out
its functions and achieve its objectives;
• Capacity development increases the ability of an organization to learn and solve
problems;
• Capacity development includes creating the ability to deal with the issues of today
and also to remain relevant in the future (Evaluating Capacity Development: Chapter 2,
2003, p. 10).
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The Importance of Capacity Building
Capacity building has particular importance for community-based organizations, because the
majority are “relatively small, running on limited resources. It is important, therefore, that they
are able to make the best possible use of their existing capacity. Capacity building is important
also because the environment in which voluntary and community organizations operate is
characterized by change and uncertainty” (Reid & Gibb, 2004, p. 1). The support that comes
through a capacity building initiative can help strengthen an organization so it can more
effectively achieve its goals, “or enable an organization to take full advantage of opportunities
for growth and development, while maintaining its sustainability and autonomy” (Reid & Gibb,
2004, p. 1).
“Capacity” is not just a fad; it’s the key to long-term sustainability. If an
organization is working well in governing and managing itself, in developing assets
and resources, in forging community linkages and in delivering valued services, it is
a sustainable enterprise. It’s taking care of business. It has the full array of options
working for it. An organization that works on all these points is increasing its
chances of survival.
We believe that increasing an organization’s overall effectiveness will contribute
greatly to its programs, and that without strong internal operations (Board,
management, staff, fund development, communications, accounting, community
linkages, etc.), it’s difficult to do a good job of delivering effective programs.
(Doherty & Mayer, 2003, p. 2)
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2. The Organizational Capacity Building Process
Capacity Building Models
There are three main ways that funders deliver capacity building programs – through capacity
building grants, development partners and structured programs. The main features of these
three different approaches are summarized in Figure 2.1.
Figu re 2.1: Key Featu res of Th ree Mod els for C ap acity Bu ild in g
Delivery Option
Key Features of Delivery Option
1. Capacity Building
Grant
•
•
•
•
2. Development
Partner
• Grantmaker funds development partners (e.g., consulting firm) to provide
capacity building service
• Grantees referred to development partner by grantmaker
• Consultants involved in problem diagnosis
• Consultants can develop long-term relationship with grantees
• Consultants can provide ongoing coaching
• Consultants have incentives to focus on long-term improvement
3. Structured
Program
• Grantees required to engage in specific educational steps, e.g., organizational
assessment, setting performance goals, comprehensive planning
• Grantees receive long-term support, e.g., consultancy, mentoring, coaching
and often financial support/incentives
• Grantees helped to set long-term goals for change
• Performance improvement monitored and continued support depends on
progress towards goals.
Grantees define the project and apply for a grant
Grantmaker reviews the project, decides if worthwhile
Grantee selects consultant from the marketplace
Projects are generally short term
Source: Open Universities …, 2008, p. 12, Adapted from Blumenthal, 2003.
The reality is not quite as clear-cut as Figure 2.1 might suggest. Many organizational capacity
building programs combine features of two or all three of these models of capacity building.
“Organizational capacity building is a demanding and complex activity for funders to undertake.
There is no one model or approach to successful capacity building, each has their potential
benefits and challenges and varied needs demand a considered choice of funding model” (Open
Universities …, 2008, p. 6).
A quick survey of current capacity building initiatives across Canada suggests that the first
model described in Figure 2.1 – providing capacity building grants – is probably the most
common approach. Organizations that submit applications for a capacity-building grant appear
to do so for one of two reasons: they see the grant as an opportunity to reflect on the
organization’s practices and to ask whether these practices are the most appropriate for users, or
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the organization is experiencing a specific problem that is reaching crisis level and the grant will
facilitate an intervention (Reid & Gibb, 2004).
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In late 2009 to late 2010, “the United Way of Saskatoon and Area, in partnership with an
anonymous donor, extended its ‘capacity development for community impact’ agenda by offering
consultancy support for organizational effectiveness to seven funded agencies” (VADIS, 2011).
The model used for this initiative was similar to the second model in Figure 2.1. A consulting
group was contracted to work with each funded agency, to guide them through a capacity
assessment, to identify priority areas for capacity building, and to implement strategies to
enhance capacity.
The pilot project that is being undertaken by the Saskatoon Collaborative Funding Partnership
will also be similar to the second model in Figure 2.1, in that one or more consultants will be
contracted by the Partnership to lead community-based organizations through the process.
Stages in the Capacity Process
Capacity building is an ongoing process not a one-time event. It is a process that occurs over
time. VADIS (2011) states that community-based organizations need to experience development
work as having discrete steps. There are many descriptions of the capacity-building process in
the literature. Although the descriptions of the process vary somewhat, they all include stages or
steps such as those listed below. It is important to note that the list below is a compilation from
several sources. All of these stages may not appear in every description of the capacity building
process.
1. Engage with community-based organizations (may involve a memo of understanding)
2. Assess community and organizational needs
3. Acknowledge the funders’ values (in order to identify the areas the funder wishes to support)
4. Determine available resources (financial and human resources and intellectual capital)
5. Set goals and objectives
6. Select appropriate capacity building strategies
7. Monitor and assess progress regularly
8. Evaluate results (Connolly, 2001; De Vita et al., 2001; VADIS, 2011).
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Create the Future (2011) (a private consulting company) describes capacity building as a
four-stage process. (See Figure 2.2.)
Figu re 2.2: Th e C ap acity Bu ild in g Proces s
Source: Create the Future, 2011.
The steps in the four-stage capacity building process described by Create the Future (2011) are:
Assessment – Using asset-based forms and processes, nonprofits complete an assessment,
“examine results, and use the results to develop action plan priorities and goals, and measure
progress”.
Action Planning – “Using a format that aligns with the assessment, nonprofits then complete
action plans that prioritize growth areas and include goals and action steps. The action plan
guides the nonprofits’ use of resources to address priorities.”
Action Plan Implementation: Resource Linkage and Technical Assistance – “Based on the
action plan, nonprofits then identify resources, choosing from a range of options.”
Evaluation and Learning – “Finally, nonprofits reassess their capacity periodically, comparing
their new capacity levels to those in their initial assessment. They monitor, document and report
their progress on action planning and capacity development, and engage in learning
opportunities.”
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Best Practices in Capacity Building
There is a shortage of rigorous research in the process of capacity building and its impact (Open
Universities …, 2008). Nevertheless a number of characteristics of effective capacity building
programs have been identified. These characteristics are listed below in Figure 2.3.
Figu re 2.3: C h aracteris tics of Effective C ap acity Bu ild in g Programs
1. A comprehensive but targeted service – While narrowly defined intervention can work, those
capacity builders that have the most impact are able to offer a range of services such as assessment,
technical assistance, financial aid and other kinds of support. However, it is also suggested that
grantmakers do need to choose a primary focus for their work and the size and type of grantee they
are targeting.
2. Assessment led – Capacity building work should start with a systematic assessment of the needs of
the organization in order to accurately diagnose the type of support that is needed. …
3. Client readiness and competence – Capacity building is more likely to be effective if the client is
ready to receive the support. For example they are not in the midst of some major project or crisis
where they are unable to devote sufficient time and attention to the intervention. They also need to
have the capacity and competence to manage the consultancy and other support they receive. It is
suggested that capacity builders may be more effective if they focus on those with the most potential
to improve, such as those with a good record of success or with particularly innovative or effective
programs, rather than choose clients with the greatest needs.
4. Competent providers – Not surprisingly the importance of having well trained foundation staff and
consultants is emphasised. However, Blumenthal (2003) is critical of the quality of much
consultancy support in the US and argues for the importance of consultants with process skills who
are able to take a developmental approach. She suggests one of the major challenges for capacity
builders is to find a way of assuring the quality of consultants.
5. Customised and contextualized service – Effective capacity building services should be tailored to
the needs of the particular organization, for example the type of organization, the environment it
works in and the stage in the organisation’s lifecycle. In addition capacity builders should look at
what other support might be available within the context of each case and consider playing a role in
bringing about other support if required.
6. Timely – Getting the timing right both in terms of when the support starts and its duration is
important for successful capacity building. For example, delays in awarding grants can mean
missed opportunities for effective intervention. Equally, setting too short a time scale for grants can
undermine opportunities to develop staff or see long-term changes through.
7. Peer Support – Building up peer support networks for sharing information and mentoring can
greatly enhance the effectiveness of capacity building interventions.
Source: Adapted from Open Universities …, 2008, pp. 13-14.
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Barriers to Effective Capacity Building
Backer et al (2010) conducted interviews with 87 funders, analyzed a large database of several
hundred capacity building projects, and identified the barriers to capacity building that appear in
Figure 2.4.
Figure 2.4: Barriers to Capacity Building
1. Staff turnover both for funders and nonprofit recipients of capacity building.
The challenge – Staff turnover is one of the two most frequently noted challenges to effective
capacity building.
The opportunity – To be successful, capacity building efforts need to recognize and be prepared for
staff turnover within both agencies and funders. Flexible project design, tutorials to get new
participants up to speed, peer mentoring and strong volunteer involvement are all potential strategies
for moderating the impact of staff turnover.
2. Inability to get needed support from other funders for a capacity building program.
The challenge – For a variety of reasons, needed financial support beyond that which the initial
funders can provide is not always forthcoming.
The opportunity – Sometimes receiving a capacity building grant from one funder enhances an
organization’s ability to secure funding from other sources.
3. Diverse needs and interests of recipients.
The challenge – Participant diversity brings significant differences in the learning needed and the
results that are possible.
The opportunity – Having a diversity of participants in a capacity building effort can create valuable
opportunities for peer learning and mentoring. Participants from widely varying backgrounds,
groups, and professional disciplines add creative thinking and richness to the effort and lead to
unexpected opportunities for collaboration.
4. Inadequate staffing or lack of other resources by both funders and recipients.
The challenge – The number of hours that funders and nonprofit staff must devote to make
significant progress, and the length of time required over months or years, are often more than
anyone anticipates in the beginning.
The opportunity – Some funders recognize the labour-intensive quality of much capacity building
work and address their own limited staffing by bringing on consultants or part-time staff to manage
this work, or by engaging a management support organization. Funders also can provide funding for
extra staffing to nonprofits during a targeted capacity building project, so they can free up the staff
needed to carry out the work without causing service or administrative problems for participants.
continued on next page
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Figure 2.4: Barriers to Capacity Building (Continued)
5. Cumbersome requirements for recipients to participate in capacity building.
The challenge – Many funders have unique requirements or interests that lead them to believe they
need special information in their proposals. Additionally, the increased attention to accountability
has led to a plethora of requirements for in-depth, frequent reporting.
The opportunity – Streamlining and unifying application processes through common application
forms used by a number of funders, refining reporting requirements so they are not overly
burdensome in frequency or content, decreasing the amount of information requested for subsequent
applications by previously funded organizations, making sure that time spent at required activities is
well used, and other approaches can save funders, grantseekers and project participants tremendous
amounts of time (which often translates into money as well), enabling them to invest more time into
the capacity-building work itself or their services to the community.
6.
Capacity-building goals set too high for any reasonable expectation of success.
The challenge – Nonprofits may set overly-ambitious goals in order to make sure their applications are
viewed favourably, or unanticipated barriers such as staff turnover or a downturn in the economy may
occur after goals are set. Funders may develop goals at the start of an effort that sound good but simply
are not achievable, given the amount of time and resources available or the presence of unforeseen
barriers.
The opportunity – What can funders legitimately expect their capacity building funding or activities to
achieve? Using information from other capacity building efforts and from baseline information gathered
at the start of a project, as well as anticipating that unforeseeable roadblocks will be encountered along
the way, can help funders (and participants in the capacity building effort) create realistic goals.
7.
Limits on impact of workshops and other one-time capacity building activities.
The challenge – Stand-alone educational sessions such as workshops, conferences or even a short series
of sessions, often do not have a significant, sustainable impact in creating practice change.
The opportunity – Workshops that have been shown to have solid impact have the following
characteristics: (1) plan a workshop series that includes follow-up to each session at the next session;
(2) conduct a series of sessions on the same topics: (3) involve more than one person from each
participating organization, and facilitate their planning for implementation of ideas generated from the
workshop; (4) design some sessions for specific homogeneous groups to enhance the content’s relevance
and cover a topic in depth; (5) provide handouts, including a list of attendees to facilitate later
networking; (6) structure and facilitate discussions; and (7) use peers as workshop facilitators, working
in teams of two to provide different perspectives, with outside speakers on occasion.
8.
Scarcity of evaluators with needed skill sets and knowledge of appropriate evaluation methods.
The challenge – In many communities, local expertise to evaluate capacity-building programs or
activities is not readily available.
The opportunity – Evaluation of capacity-building is a relatively new field. This may be an opportunity
for staff members, consultants and academics to develop new skills.
Source: Adapted from: Backer, Bleeg & Groves, 2010, pp. 16-20.
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3. The Capacity Assessment
Many experts recommend that an assessment component be part of every significant capacity
building initiative (Backer, 2000; Backer, 2011; Backer, Bleeg & Groves, 2010; Connolly, 2001; Create the
Future, 2011; Doherty & Mayer, 2003; Open University …, 2008; VADIS, 2011). Some organizations
may be unclear about their capacity building priorities. They may want to focus on everything at
once, or they may identify priorities that won’t affect their ability to serve the community or
operate effectively. A formal assessment will help to identify key priorities for capacity
building.
The assessment is not a precursor to capacity building. It is an integral part of the process.
Learning occurs and new skills are developed as the staff and board of an organization work
through the assessment (Gutherie Preston, 2005; VADIS, 2011).
External Assessment vs. Self-Assessment
There are two general approaches to the assessment of an organization’s capacity. The
assessment can be done by an external evaluator or the organization can self-assess.
• External assessment – With this approach, a consultant visits the organization “to perform an
assessment of several key areas of organizational tasks and functions (e.g., vision, operations,
human resource, networking etc.). The final report is usually shared with an organization in
the form of a written document” (Bloom, et al., n.d., p. 1).
• Self-assessment – With this approach, the staff and board of the organization (and sometimes
clients and other stakeholders) assess the organization’s capacity in key operational areas.
Sometimes a blend of these two approaches is used.
Although a few experts recommend external assessment (Open Universities …, 2008), there is a
strong trend toward self-assessment. Below are some comments about the benefits of
self-assessment.
A self-assessment can help engage managers, staff and external stakeholders in
assessing an organization’s capacity and its capacity development needs. It also
builds their understanding of organizational strengths and weaknesses as a basis
for development commitment to implementing organizational changes where
needed (Evaluating Capacity Development: Chapter 2, 2003, p. 13).
Self-assessments have become quite popular in recent years because they
encourage greater ownership of the results by involving staff in the assessment
process. Based on principles of participation, staff members are recognized as the
main agents of organizational change (Bloom, et al., n.d., p. 2).
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Purposes of a Capacity Assessment
Assessment of the capacity of a community-based organization can have benefits for both the
organization and for funders. “Before engaging in any capacity assessment, funders first need to
clarify their goals for the assessment process” (Gutherie & Preston, 2005, p. 6).
The possible purposes for a capacity assessment are identified in Figure 3.1.
Figure 3.1: Possible Purposes of a Capacity Assessment
1.
To enhance grantees’ understanding of their own organizational capacity and serve as a catalyst
for action
The process of completing the assessment can expand grantees’ knowledge because it draws attention to
components of capacity they may not have considered. For less developed community-based
organizations it provides a vision of what capacity can look like. The assessment instrument also
provides CBO staff with a common framework and vocabulary for talking about organizational capacity
both among themselves and with their funder. When multiple staff and board members participate, the
assessment process also stimulates critical dialogue on capacity.
2.
To increase funder knowledge about grantee capacity
Funders can use data from their assessment instruments to better understand grantee capacity at three
levels: the individual grantee, cohorts of grantees, and an entire field of community-based organizations.
3.
To inform technical assistance plans and marshall new resources
The portrait of grantee capacity that is created through an assessment becomes a natural springboard for
planning a capacity-building intervention, whether for an individual grantee or across a cohort of
grantees. Understanding the capacity of a cohort of grantees can help funders identify opportunities for
group training and other group approaches to capacity building.
4.
To track growth over time
If the same assessment tool is used every year over a period of years, it enables community-based
organizations and funders to track growth (or declines) in specific capacity elements over time.
5.
To enable funders to set program-level goals for their capacity building initiatives
For example, funders could commit to helping all their grantees reach a minimum level of capacity or to
raise average capacity levels in specific key areas over a defined period of time.
Source: Adapted from Gutherie & Preston, 2006, pp. 6-8.
The Capacity Assessment Tool
A quick survey shows that dozens of capacity assessment tools are available, ranging from
simple checklists to complex questionnaires. Some are designed for use in North America and
Britain, while others are designed to assess the capacity of organizations in the developing world.
(Collins, n.d.; Levinger & Bloom, n.d., Van Zyl, 1996)
One of the best known and most frequently used capacity assessment tools is the McKinsey
Organizational Grid. This grid was developed for Venture Philanthropy Partners (an American
philanthropic investment organization) by McKinsey and Company. It appears as an appendix in
the book Effective Capacity Building in Nonprofit Organizations (McKinsey, 2001).
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The McKinsey Grid was designed to assess seven broad areas of capacity:
1. Aspirations
5. Systems and Infrastructure
2. Strategy
6. Organizational Structure
3. Organizational Skills
7. Culture
4. Human Resources
On the McKinsey Grid, a number of capacity elements are identified within each of the seven
categories, and each capacity element is described at four different levels of performance. A
sample of one capacity element in the grid is provided in Figure 3.2.
Figure 3.2: Example From McKinsey Organizational Grid
1. Clear need for
increased capacity
2. Basic level of
capacity in place
3. Moderate level of
capacity in place
4. High level of
capacity in place
Very strong
High dependence
Limited dependence
Reliance but not
dependence on
CEO/executive director.
Organization would
cease to exist without
his/her presence.
on CEO/executive
director. Organization
would continue to exist
without his/her presence,
but likely in a very
different form.
on CEO/executive
director. Organization
would continue in similar
way without his/her
presence but areas such as
fund-raising or operations
would likely suffer
significantly during
transition period, no
member of management
team could potentially
take the CEO/executive
director.
dependence on
CEO/executive director.
Smooth transition to new
leader could be expected.
Fund-raising and
operations likely to
continue without major
problems. Senior
management team can fill
in during transition time.
Several members of
management team could
potentially take on
CEO/executive director
role.
Source: McKinsey, 2001, p. 100.
The McKinsey Grid has become very well established as a foundation for capacity assessment.
More than a dozen different organizations have used it “as is” or adapted it for their particular
situation. Several universities have incorporated it into their curricula. For a listing for these
uses go to www.vppartners.org/learning/mckinsey-vpp-ocat.
Two significant adaptations of the McKinsey Grid were done by the Marguerite Casey
Foundation (n.d.) and Feeding America (2011). The Marguerite Casey Foundation is “dedicated
to creating a movement of working families advocating on their own behalf for change”
(Marguerite Casey Foundation, 2011). The Foundation organized the content of the assessment grid
into four categories and created new questions on community organizing and constituent
involvement, as well as strengthening questions on evaluation, communication and marketing.
Feeding America is an umbrella organization representing American food banks. It reorganized
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the content into six categories and added many questions about the technical aspects of food
bank operations.
The United Way of Saskatoon and Area, in its work with seven funded agencies (VADIS, 2011)
used an adapted version of the Marguerite Casey Foundation Capacity Assessment Tool.
The Saskatoon Collaborative Funding Partnership, in its 2011 pilot project, plans to use an
adapted version of the original McKinsey Grid.
The Capacity Assessment Process
The individuals who participate in a capacity assessment virtually always include staff and board
members and may also include individuals who use the services of the agency, representatives of
the agency’s community partners, and other stakeholders.
With the McKinsey Grid, its many adaptations, and other capacity assessment tools as well, there
are basically two approaches to completion of the assessment tool.
• Do it yourself – With this approach, each participant completes the tool on their own, without
discussion with other assessors, and sends it to a coordinator who tabulates all the ratings and
produces a master chart. This process may be followed by a group meeting to discuss results
or set priorities.
• Facilitator led – A facilitator leads a group through the capacity elements in the assessment
tool, explaining each one and answering questions as needed. Members of the group usually
complete the assessment individually, and then have a group discussion about their ratings.
In actual practice, most organizations use a combination of these two approaches. For example,
Feeding America asks the staff and board of each food bank to complete the assessment privately
and then to come together as a group to establish a single set of priorities for that food bank.
This single set of priorities is then forwarded to the national organization, where a set of regional
and national priorities is established.
VADIS Consulting Group (2011) in its work for the United Way of Saskatoon and Area used a
mixed approach. “One agency completed the tool as individuals at a group sitting. Another
agency used an electronic version, and another was a combination of group and individual
completion” (p. 18).
The Saskatoon Collaborative Funding Partnership, in its 2011 pilot project, plans to use a
facilitated process, the details of which are still to be determined.
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4. Issues in Organizational Capacity Building
Three issues that often arise in organizational capacity building are described below.
Power Imbalance
A fundamental imbalance in power exists between a funding organizations and communitybased organizations that are seeking funding. This power imbalance is even greater when the
funder is encouraging or requiring community-based organizations to participate in capacity
building initiatives as a condition of receiving funding. Despite this reality, power imbalance is
discussed infrequently in the literature on organizational capacity building.
De Vita et al. (2001) describe this imbalance but give limited suggestions for addressing it.
Ethics of capacity building revolve in large part around the inherent imbalances of
power between foundations and nonprofits. These power balance concerns
manifest themselves in many technical ways; for instance, community
foundations that also operate management assistance programs must be careful to
build appropriate “firewalls” between their grantmaking and capacity-building
functions, …. Otherwise, there may be not only ethical problems but also a
practical reluctance among nonprofits to use the foundation’s capacity-building
service, which typically requires them to be candid about their operating problems
and organizational shortcomings.
This leads to an ethical issue aptly described by a phrase from medicine: “First,
do not harm.” … there is more potential for harm to nonprofits in capacity
building than in any other types of intervention conducted by foundations.
Participating in capacity building requires a nonprofit to give information about
its weakest, most vulnerable elements and, in particular, to share that information
with one or more of its funders. Such vulnerability requires devoting
considerable energy to oversight though, … there is also a downside possibility
that too much hesitance to take risks can lead to “the assurance of a mediocre
approach.” What is important is that the risks of capacity building be managed
thoughtfully. (p. 70)
VADIS Consulting Group (2011) in their work with seven agencies funded by the United Way of
Saskatoon and Area suggest that the power differential be acknowledged and discussed.
The consultants encouraged both UWSA-as-funder, and the agencies to deal
openly with the inherent power differential between funder and recipient
according to their values. The UWSA approached its mission and the agencies as
facilitative leader intent on supporting an agenda of change, adaptation and
growth toward sustainability. The agencies were accustomed to funder-as-grant
maker. (p. 15)
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Two organizations (Open Universities …, 2008; Reid and Gibb, 2004) noted that because of the power
imbalance, community-based organizations are reluctant to give negative feedback to the funder
about the funders’ processes. CBOs tend to tell the funder what they think the funder wants to
hear (Open Universities …, 2008). Lack of criticism of the funders program may be linked to a
desire to please the funder given that many of the participating CBOs are likely to make future
appeals to the funder (Reid & Gibb, 2004).
Despite CAF collaborative approach there is still inevitably a degree of
asymmetry in the relationship. CAF like any grantmaker is providing the funding
which gives it a degree of power that can create particular dynamics, such as
unwillingness by some grantees to give negative feedback.
“It is basically a grant … it is a one-way relationship … the feedback you tend to
give is all positive. You are not going to give a funder a critique of their
organisation.” This is a common issue for any grantmaker. (Open Universities …,
p. 40)
In order to compensate for CBOs’ reluctance to give negative feedback to the funder, one
granting program commissioned an independent evaluation by a university (Reid & Gibbs, 2004).
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Working with Consultants
In its upcoming capacity building pilot project, the Saskatoon Collaborative Funding Partnership
plans to contract one or more consultants to work with pilot organizations (see Model #2 in
Figure 2.1 earlier in this report). “A neutral third party facilitator or coach can serve a very
useful role for the nonprofits involved in a capacity building effort. Such a consultant can assist
in assessing capacity needs, in developing plans, in providing accountability for ‘working the
plan’ and in sharing the learnings with other nonprofits” (Doherty & Mayer, 2003, p. 8).
Approaches Used by Capacity Building Consultants
Capacity building consultants tend to use one or more of three general approaches (see Figure
4.1). Some consultants might use all three approaches at different times and different situations
with the same CBO. The benefits of the three approaches are different. Facilitation and training
have the potential to produce organization-wide benefits, while the benefits of mentoring are
chiefly for individuals.
Figu re 4.1: A p p roach es U s ed b y C ap acity Bu ild in g C on s u ltan ts
Facilitation – Aims to empower the organization to achieve its own goals. Usually involves group
strategies for brainstorming or reflection on current practice. Rather than introducing new information
or transferring specific skills, facilitation aims to allow a range of people involved with the CBO to
clarify their own ideas about particular issues.
Facilitation has the potential to produce organization-wide benefits.
Mentoring – Centres on offering practical guidance to individuals and supplying feedback on actions
subsequently taken. Tends to involve key staff members, who often hold much of the organization’s
expertise and knowledge.
Research shows that mentoring is successful in developing expertise in the individuals who work closely
with the consultants, but there is little evidence that these key individuals disseminate what they have
learned throughout the organization. There is a danger that expertise attained through mentoring may be
lost to the organization when the mentored individual leaves the organization.
Training – Focuses on knowledge transfer which stops short of providing practice assistance, for
example, a training day on fund-raising for managers of the branches of a particular CBO.
Training has the potential to disseminate knowledge throughout the entire CBO, but the potential for
depth of learning is not as great as with mentoring.
Source: Adapted from Reid & Gibb, 2004, pp. 8-9.
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Issues and Barriers to Effective Use of Consultants
When a funder contracts consultants to work with CBOs or provides money so CBOs can
contract their own consultant, the three-way relationship between funder, consultant and
community-based organization must be managed productively. Issues that may need to be
addressed are identified in Figure 4.2.
Figu re 4.2: I s s u es in Man agin g th e Fu n d er/C on s u ltan t/C BO
R elation s h ip
1. Time lag for capacity building – Many funders give CBOs opportunities to apply for grants to
contract capacity building consultants (see Model #1 in Figure 2.1, earlier in this document). When
this is the case, there may be a considerable time lag between submission of an application and
approval. Staff of the CBO may have turned over and potential consultants may have gone on to
other projects.
2. Having a sufficient number of appropriately skilled staff to recruit, maintain and manage
consultants – If using consultants is to be effective, the funding agency itself needs enough capacity
(in the form of skilled staff) to recruit and possibly train consultants and to manage the three-way
relationship between funder, CBO and consultants.
3. Matching consultants to community-based organizations – The funder may assign a particular
consultant to a CBO or may offer the CBO a choice of two or three consultants. Capacity building
through consultancy “requires skills in assessing the quality and appropriateness of a particular
consultant for each situation and to act as ‘matchmakers’ between the consultant and the grantee”
(Open Universities …, 2008, p. __).
4. Time demands for CBO – The staff and board of a CBO may already have great pressures on their
time and energy and may have difficulty fitting in the extra time needed to work effectively with the
consultant.
5. Setting realistic expectations for level of support to be provided – The funder may need to help
the CBO set realistic expectations for what can be achieved within the number of consulting days
available. Sometimes a CBO’s expectations are very high or the consultant may realize that an
organization’s capacity is more limited than they believed at the beginning of the process.
6. Promoting regular communication between the funder, the CBO and the consultant – It is
appropriate to formally establish communication processes, e.g., regular meetings or progress reports
at specific times or checkpoints rather than leaving communication to chance.
7. Mediating between CBO and consultant – Occasionally the funder may need to be a mediator
between the CBO and the consultant, for example, when a consultancy goes wrong, when the
consultant discovers ethical or whistleblower issues, or when the CBO and the consultant disagree on
the content of a final report.
Source: Adapted from Open Universities …, 2008; Reid & Gibb, 2004.
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Assessing the Impact of a Consultant Intervention
It is often difficult to attribute change in an organization to the work of a consultant because
many factors influence the way an organization functions. However, the questions below may
help to assess the impact of a consultancy.
1. Were particular outputs expected from the consultancy, e.g., business plan, operational
plan, improved IT systems, funding proposal? If so, to what extent were these outputs
completed satisfactorily?
2. What did the outputs of the consultancy mean for the CBO? For example, was the CBO
able to use a business plan when applying to funding bodies as evidence of its aims,
objectives and practices? Did a strategic plan allow the CBO to prioritize its goals and be
realistic about what can be accomplished within a particular timeframe?
3. Were there changes in the way the CBO operates as a result of the consultancy? For
example, when a consultancy focused on fundraising, were there changes in the way the
organization approached this task?
4. Were there changes in the knowledge and skills of staff and board? For example, in the
fundraising example above, did members of the CBO have more awareness of various
methods for appealing to funders and increased confidence in their approach to fundraising?
5. Did the staff and board of the CBO have greater insight into the effectiveness of the
organization’s structure and procedures in relation to its central mission or goals? This is
often a deliberate product or a by-product of work with a consultant (Reid & Gibb, 2004).
Capturing and Sharing Learning
The Charities Aid Foundation (Open Universities …, 2008) which has facilitated and/or sponsored
many capacity building initiatives states that more attention needs to be paid to capturing
learning from the work done. They say:
Funders need to think more deeply about how to capture and disseminate learning
from capacity building initiatives, what needs to be captured and how to
disseminate it. Routine monitoring can miss the trick and has the danger of
burying important lessons in too much detail. There can be a tension between the
requirement of due diligence and the freer approach implied by creative
philanthropy. The different points at which learning occurs and the meaning
attached to this demands a more personal and reflective process than routine
monitoring usually allows. The research also suggests that there is a need to
undertake more post-grant follow-up and evaluation work, for example, by having
face-to-face meetings between consultants, grants staff and grant decision-making
bodies to take stock after the grant has ended and follow up meetings with
grantees to assess long-term progress and benefits. In addition, opportunities
need to be created for sharing and disseminating learning between the partners in
the process and more widely in the sector. This also implies that funders need to
think much more carefully about their criteria for success. Of course evaluation
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can be expensive and the costs need to be weighed against the likely benefits (p.
52).
The Charities Aid Foundation (Open Universities …,2008) emphasizes, in particular, the need to
capture feedback from consultants who work with community-based agencies on capacity
building initiatives.
Although the formal monitoring was undertaken rigorously, the softer qualitative
learning was more easily lost. Mechanisms for capturing feedback from
consultants to individual grants officers have been strengthened to ensure stronger
learning and feedback for the programme as a whole. Consultants felt that they
needed more feedback on their reports than they got and opportunities to learn
from each other. Members of the grants panel would have benefited from hearing
the lessons the consultants had learnt to inform their decision-making
accordingly. Many organizations struggle with these issues, it is a neglected
aspect of the organisational environment rather than a particular feature of CAF
Grantmaking (p. 39).
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