By James O’Sullivan
Director, Rockefeller Philanthropy Advisors
On January 25th, the experiences of funders and grantees in Africa were used as a lens on funding organizational capacity as part of the first session of our International Grantmakers Network program series. Nearly 30 Philanthropy New York members participated in this opportunity to focus on how we define and approach “capacity building” in an international context, including program staff, philanthropic advisors, and grants managers. The session was organized by International Grantmakers Network Steering Committee members Bonnie Potter (The Lester Fund) and Donzie Barroso (Rockefeller Philanthropy Advisors).
Recognizing that capacity is a buzzword with different meanings for different groups, Philanthropy New York members volunteered their organizations’ reasons for supporting capacity building. These included helping organizations become more effective, helping grantees be more competitive when responding to Requests for Proposals, trying to provide societal benefits through a stronger nonprofit sector, and helping to create stronger non-governmental organizations (NGOs) so that funders’ legacies are as robust as possible.
Niamani Mutima, Executive Director of the Africa Grantmakers’ Affinity Group (AGAG), led the discussion, drawing on key findings from AGAG’s recent study, Making the Right Fit: Supporting NGOs in Africa Using Direct and Indirect Funding.
Making the Right Fit gathered input from foundation staffs, African-headquartered NGOs, and intermediary organizations to create a shared definition of organizational capacity. The findings explored the ability of an organization to implement a project, achieve results, attract qualified staff, track results, and establish sound fiscal operations.
Respondents from each group, however, had important additions to the definition that showed how different stakeholders frame the issue. For NGOs, the ability to authentically engage communities was a preeminent component of organizational capacity. The intermediary organizations saw the importance of cross-organization relationships, by contrast, and foundation staff highlighted strong governance and advocacy ability as key to an NGO’s overall effectiveness. Common to all the definitions, of course, is that the components of capacity revolve around project implementation. This is paradoxical because grantmakers fund capacity building in order to help create stronger organizations, not projects.
To help build organizational capacity, three funding approaches were identified. Specific assistance could be provided via supplemental grants, or technical assistance could be integrated into project grants. A third tactic was to provide general operating support to allow an NGO to identify and obtain supports needed to strengthen its work.
For international grantmakers, capacity building has to also take into account varying local rules and norms. Regulations for expenditures and accounting may differ between the grantor’s country and the recipient’s; local culture will influence how organizations operate and the strategies they embrace; and local infrastructures will influence how organizations can allocate program resources. Even the availability of basic services such as electricity and clean water can vary across countries, especially in developing nations, so budgets and plans may need to be adjusted depending on what is being funded.
In recognition of the inevitable power differential between funders and applicants, Ms. Mutima suggested that donors need to be explicit with themselves and their boards about their own interests, and allow NGOs to define both increased capacity and technical assistance needs for themselves. The biggest single mistake a donor can make is to fund capacity building primarily to obtain better reports on its own grants. But at its best, grantees and funders can work in collaboration to identify impediments to an organization’s effectiveness and provide resources to address those needs.
A follow-up session will take place on Thursday, February 9th, at which organizational development consultant MaryKay Penn will facilitate a conversation to draw out the best practices of international funders engaged in capacity-building work with their grantee partners. We look forward to the increased knowledgebase that both programs will provide for foundations addressing complex grantee needs in complex funding environments.
Jim O’Sullivan is Co-Chair of the International Grantmakers Network and Director of Foundation Services at Rockefeller Philanthropy Advisors.