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Techniques to overcome internal and external barriers to nonprofit capacity building

Organizational capacity building is universally recognized as one of the most challenging parts of nonprofit management. Interestingly, challenges to capacity building typically come from the good intentions of nonprofit organizations themselves — you want to focus on the work and services you provide, not on yourself. These good intentions may have negative consequences, though, such as a weak infrastructure and budget deficits.

Attention to both external and internal barriers to capacity building — and techniques for overcoming them — will help you build a vital organization that delivers on its mission throughout its lifespan.


Barrier: Lack of resources

Studies of U.S. nonprofits by the National Council of Nonprofits and the Bush School of Government and Public Service have identified lack of resources as the number one obstacle to capacity building, particularly for nonprofits with small donor pools and those facing increased demand for services.

Strategy: Diverse portfolio of funding sources

Becoming too dependent on a small number of funders is an easy, but avoidable, pitfall. Cultivating a broad array of public and private donors can help provide insulation against changes in the economic and philanthropic environment. Also consider fee-for-service, earned income or other income opportunities (where relevant). Because this type of funding isn't tied to the wishes or requirements of a particular donor, it may be more easily used for capacity building.


Barrier: Stigma and hopelessness

The Bush Foundation cites intangible, yet very real, concerns of public stigma and hopelessness as significant challenges for nonprofits that attempt to address difficult issues, such as sexual assault, mental illness or poverty. Sometimes a sense of hopelessness extends to staff and volunteers, which may cause a lack of interest in or commitment to investing in building internal capacity.

Strategy: Measurement and communication

Measurement and attention to outcomes are the most concrete ways to combat hopelessness. Showing the ways in which your organization delivers services effectively, even on an individual scale, makes the case for success and provides solid evidence for strengthening your programs. Better yet, clearly communicate any success, whether big or small, to all stakeholders.


Barrier: Lack of specialized staff

Nonprofits depend on competent, well-educated staff and volunteers. However, many small organizations lack staff members with technology expertise or other specialized knowledge. In other cases, minimal staffing results in survival mode — with no time to focus on capacity building.

Strategy: Collaboration

Authors Jennifer Chandler and Kristen Scott Kennedy stress the increasing importance of networks to building capacity. In an article published in Stanford Social Innovation Review, they write:

"Leverage your participation in a network to learn from other nonprofit leaders. When you participate in a peer-learning cohort, even with others who do not share your specific job responsibilities, you often hear how other nonprofits approach challenges that your nonprofit may also be struggling with. Seeing the problem from their perspectives can offer another way to surmount barriers. Addressing diversity, equity, and inclusion is a classic example of how learning from others increases effectiveness."

Chandler and Kennedy also stress the importance of technology. Peer networks and collaborative relationships can utilize online connections as well as real world interaction.


Barrier: Lack of infrastructure

Lack of infrastructure is the origin of the so-called nonprofit starvation cycle, in which nonprofits tend to underestimate the cost of overhead and operations out of a well-intentioned desire to dedicate the maximum amount of funds to services. Ultimately, though, the cycle results in a breakdown of the ability to continue those services as equipment deteriorates and staff members become overworked.

Strategy: Honesty

Kathy Reich, Director of Organizational Effectiveness Grantmaking at the David and Lucile Packard Foundation, stresses the need for nonprofits to deal honestly with their supporters about costs and needs. In an article published by Social Velocity, Reich says, "We encourage each of our program officers to learn about the organizational strengths and challenges of their grantees, and to weave capacity building into grantmaking strategies." This approach — honesty and accuracy from the ground up — helps create a strong base on which to build a nonprofit organization.


Barrier: Lack of understanding

Lack of understanding regarding capacity building — including its importance and the various forms it can take — among staff, board and stakeholders is another common barrier to capacity building. That's not surprising, perhaps, given the typical complexity of capacity-building initiatives.

Strategy: Education

In an article published in Nonprofit Quarterly, Russell Willis Taylor, CEO of National Arts Strategies, advocates a whole-community approach to learning about organizational capacity building. People respond to and remember information better when they learn it in a group, Taylor says. Educating the team can help ensure that the learning "sticks."



MissionBox editorial content is offered as guidance only, and is not meant, nor should it be construed as, a replacement for certified, professional expertise.



Stanford Social Innovation Review: Building capacity through networks by Jennifer Chandler and Kristen Scott Kennedy (2016)

National Council of Nonprofits: 2015 trends to watch by Jennifer Chandler (2015)

Nonprofit Quarterly: Supporting nonprofit capacity: Three principles for grantmakers by Lori Bartczak (2013)

Nonprofit Finance Fund: Small nonprofits solving big problems by Angela Francis and Jennifer Talansky (2012)

Minnesota Council of Nonprofits: An analysis of the nonprofit capacity-building industry in Minnesota (2007)

Social Velocity: Weaving nonprofit capacity building into philanthropy: An interview with Kathy Reich



Baltimore-based writer and educator