What the Heck does "Capacity" Mean for Nonprofits?
What the heck does “capacity” mean?
The word “capacity” is nebulous for many people. It’s like saying “organizational infrastructure” or “intersectionality.” It can seem like jargon; it may be hard to define but you kinda think you’d know it when you see it…maybe. For folks newer to these terms, or afraid to raise their hand to ask, “what exactly do you mean by ‘capacity’” here’s a list!
“Capacity” means the “ability to do” whatever it is you want to do. So for nonprofit organizations, capacity typically means the “ability to reach its mission.” Whatever you could use more of, in order to reach your mission, is capacity you want or need. I have provided a list below. Use it like a checklist to help you with grant writing or in explaining to funders why you need general operating support; so you can build capacity. Or better yet, this list can help you find a capacity-building grant.
· Money – This one is obvious. Money is needed to build or acquire all the items below. Don’t be shy about admitting that money does help your capacity.
· Training – This one is huge. You may have a great team already, but with more training you could accomplish more and be better at what you do. Consider training on technology, leadership, management, fundraising, diversity, or advocacy.
· Leadership development – Sometimes this comes from traditional training, but it also comes from cross-training at other organizations, mentorship, coaching, classes, or through collaboration with peers. The stronger your leaders, the stronger your organization.
Leadership development helps build a pipeline of talent, should you lose key talent in your organization. Internal talent = less jarring transitions.
· Financial management - You need to know how to create budgets and cash flow projections. Financial data is power to see the future. If you are using a checkbook instead of QuickBooks, you have limited capacity. You need people with knowledge of nonprofit GAAP principles and someone who can assist with your tax filings and audits. If you don’t have a CPA on your board’s finance committee, you probably have less capacity to provide oversight, checks and balances on transactions.
· Space for your work – This can be office space, or theater space, or even just storage. Having a place to receive mail, have meetings, broker deals, and collaborate with your staff and volunteers is vital.
· Technology – This is critical. Technology can range from hardware (computers) to software (Microsoft Office, cloud storage or collaboration tools like Gmail). This also includes software for bookkeeping, website, donations or a CRM.
· Relationships – The more people you know and who like you, the more capacity you have to ask for help. This is why coalitions are so powerful.
· Flexibility – The organization can make a choice to be nimble or bureaucratic. What happens when you need to make decisions quickly? Do you need a unanimous vote from a committee that only meets quarterly? If so, you have less capacity than if you have clear decision-making roles and permissions. Does your mission allow you flexibility with how you reach your mission? If so, you have more capacity to find funding. And so on.
· Foundational Documents – This includes a mission statement (potentially a vision statement), a theory of change, and goals (perhaps even a strategic plan). Without these things you are aimless. Sometimes structure and direction helps with capacity.
· Program delivery – Are you only able to deliver your programs in one place? Can you offer programs online? Do you need someone with a particular certification like an MSW to deliver programs? For greater program delivery you will need things like experts, trained professionals, standards, policies and procedures, forms and more.
· Fundraising – Do you have what you need to raise and accept donations? If you don’t have fundraising software or a full-time development person, you have low fundraising capacity. Does your website accept recurring donations? Do you have a development plan and case statement? A brochure?
· Board –Boards set policy, provide expertise, make valuable connections, and raise funds. They provide pro-bono services, too. The stronger your board the stronger the organization. A board that has a CPA, an attorney, an HR expert and a IT rock star will bring way more capacity to an organization than one with a rag-tag bunch of well-intentioned friends with no special skills. No offense, but it’s true. Board capacity also means a board that is trained, collaborative, healthy, and has systems like board agreements and functioning committees.
· Communications – Are you able to tell your organizational story through newsletters, media outreach, infographics and regular updates on your blog? Are there experts helping you on these tasks or do you have the expertise in house?
· Time to think – Believe it or not, running around like a chicken with your head cut off is not conducive to capacity building. You need time and emotional space for putting day-to-day tasks aside and really thinking about the work. A key question to ponder during this time is “Are we just doing things right, or are we doing the right things?” Having the room to step back and plan, think and really ask tough questions - is organizational capacity. Most small and resource-strapped organizations don’t think they have this.
I would love to hear your suggestions for other categories of “capacity.” Send them to me, or just your thoughts on this article to Sean@MindTheGapConsulting.org.
Check out more about capacity with Holly Rustick’s Episode 125
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