Capacity-Building Efforts for Nonprofit Organizations

3 3 AS S OCIE T Y REL IES more on nonprofit organizations to p r ovide critical services, advocate for public policy, and stimulate innovation, leaders in the nonprofit sector share common concerns: how to make better use of limited resources in the face of growing need; how to increase the accountability of nonprofits to donors and regulators; and how to stay the course and reach established goals in a volatile world. Increasingly, nonprofits and funders alike are turning to the same strategy to address these concerns – enhancing organizational effectiveness. Growing numbers of grantmakers believe that investing in organizational capacity building helps leverage the impact of their philanthropic resources (Porter and Kramer, 1999 ) . Over the past several years, funders who support nonprofits, consultants and trainers who work with them, and nonprofit groups themselves have become more interested in strengthening the management and governance of nonprofit organizations through organization development activities, such as leadership development, strategic planning, program design and evaluation, and board development (De Vita, Fleming, and Twombly, 2001). More and more, they are realizing that stronger nonprofit organizations can lead to greater program impact. What makes a nonprofit organization effective? Ac c o r d i n g to Grantmakers for Effective Organizations, it is the “ability of an o r ganization to fulfill its mission through a blend of sound management, strong governance, and a persistent red edication to a chieving results” (Grantmakers for Effective Orga n i z a t i o n s , 2000, p. 2). Like all organizations, nonprofit organizations are dynamic systems. Nonprofit organizational capacity is multif a c e t ed and continually evolving. As Exhibit 1 s h ows, mission, “Growing numbers of grantmakers believe that investing in organizational capacitybuilding helps leverage the impact of their philanthropic resources ”