Funding Capacity Building Through Grants & Campaigns

Capacity building for nonprofits is the process of improving and expanding your nonprofit’s operational infrastructure to strengthen your organization’s ability to deliver its mission and increase its impact. 

Ideally, your capacity should increase as your organization grows. As you invest in technology, bring skilled professionals onto your team, and shore up your reserve fund and financial portfolio, you should be able to expand your programs and reach. 

However, in some instances, an organization might need to take deliberate steps to align infrastructure with execution goals. That’s where dedicated capacity-building development comes in. In this guide, we’ll cover two options for closing the gap: funding capacity building through campaigns and grants.  

What are the costs of capacity building?

To grow your nonprofit’s infrastructure, you’ll likely need funding for initiatives like:

• Hiring and training staff, including leadership
• Board training
• Organizational assessments and planning
• Marketing, branding, and communications planning and implementation
• Technology updates  

Your nonprofit may allocate revenue from your annual fund towards these objectives, but to make major changes, such as launching a new program or scaling up service offerings, you will likely need to run a dedicated fundraiser. 

Some capacity-building initiatives involve one-time costs, like digital agency fees for a website redesign. Others represent ongoing costs, like hiring a new staff member. After securing the initial funding needed for launch, you’ll need to update your operating budget to account for new recurring costs.

What is a capacity-building campaign? 

A dedicated campaign can be a great way to secure the revenue needed for your capacity-building efforts. 

In most respects, running a capacity-building campaign is very similar to a capital campaign. 

You’ll approach major donors to secure major lead gifts before turning to the general public to gather the final donations needed to reach your goal. The main difference is that capital campaigns usually have a set end goal, such as constructing a new building or launching a new program, whereas capacity campaigns can help nonprofits make strategic investments in the people, systems, and infrastructure needed to achieve a larger vision for mission impact. Many capital campaigns strengthen organizational capacity, but some nonprofits also launch targeted capacity-building initiatives outside of a traditional capital campaign structure.

To ensure your general capacity-building campaigns still gain support, your nonprofit’s communication should fully explain the impact that increased capacity will have on your ability to serve your community. Here are a few promotion tips to keep in mind at different stages of your campaign.

1. Clearly define your objectives and goals. Before beginning your campaign, determine what roadblocks are holding your team back and what you need to overcome them. Then, identify what impact your success will have. Having solid answers for these questions will help you develop a case for support that will be key during prospect conversations and later marketing messages. When donors believe in your vision for the future, they’ll be excited to be a part of it. 
2. Conduct a feasibility study. Before you finalize your plans or begin reaching out to prospects, you’ll need to conduct a feasibility study. You’ll test your campaign’s plan and goals by gathering advice from stakeholders, like potential lead donors. Capital Campaign Pro’s guide to feasibility studies recommends leaning into this opportunity to connect with your major donors by having your team conduct these conversations themselves with the support of an experienced consultant. Not only will hearing donors’ opinions directly help shape your plan, but you’ll get an opportunity to strengthen these connections ahead of your campaign. 
3. Understand the role of marketing. After completing the quiet phase, it’s time to employ broader marketing strategies during the public phase. These include kickoff events, email appeals, social media campaigns, and even special matching gift challenges. Don’t lose sight of your marketing’s underlying purpose—connecting donors to your mission by clearly explaining their support’s impact. In all of your messaging, reinforce the reasons why you need your supporters’ help to prepare for the future. 

While your campaign goal is tangible (collecting a specific amount of donations), that’s not the only benefit. Launching a capacity campaign invites your supporters to be a part of your dreams for the future and gets them excited about the work you’re doing and the work that’s still to come. 

What are capacity-building grants?

Another avenue for funding capacity building is grants. Many grantmakers recognize that, for truly sustainable nonprofits, capacity-building is vital. 

Look for grants created for the purpose of investing in nonprofit infrastructure. This way, you won’t need to convince grantmakers of the importance of capacity building. However, there are specific considerations for capacity-building grant applications:

• Abundance mindset. Structure your application with a mindset of strategic growth, not desperation. This will lead to a stronger case for your nonprofit and present your organization as professional and trustworthy. Invite grantmakers to partner with your nonprofit in the good work you’ll do, rather than positioning the funding as a do-or-die situation.
• Missional alignment. Strong grant applications connect capacity building with mission impact and show how supporting your organization furthers the grantmaker’s mission. Make it easy for the funder to see how well your organization aligns with theirs. 
• Sustainability. Some capacity-building initiatives will require long-term funding. Grantmakers will likely want to know how you will continue to fund those initiatives after the grant is spent. Include your plan for adjusting your annual budget to account for the additional infrastructure. 

Many funders adopt a “trust-based philanthropy” model that gives nonprofits more autonomy when they receive grants. Beyond just the financial benefit of earning a capacity-building grant, often when grantmakers pursue a “trust-based” approach, they may also offer other means of support. Getting strategic perspectives from funders can be invaluable for your overall capacity-building journey. 

---

Campaigns and grants aren’t mutually exclusive. In fact, your nonprofit might employ both, and you may even translate elements from one funding endeavor to the other. For instance, the compelling narrative you share in your campaign’s case for support that connects your capacity-building activities to your mission can likely be easily adapted into a part of your grant application. 

For both campaigns and grants, view donors and funders as partners in your journey to growth. Capacity building isn’t just about financial resources. Your supporters might also be able to offer valuable wisdom for how to successfully chart the next chapter of your nonprofit.

This blog is an original work of the attributed author. It is shared with permission via Foundant Technologies’ website for informative purposes only as part of our educational content in the social good sector. This text’s views, thoughts, and opinions belong solely to the author and do not necessarily reflect Foundant’s stance on this topic.