Capacity Building Grants for Nonprofits: Grant Writing 101
As a nonprofit leader, you’re always looking for ways to improve your organization. Often, fundraising and project expansion is the spotlight of your efforts. Looking into capacity building grants for nonprofits is equally important as a tool to maintain operations and administration of your organization.
In this article, we’ll share why considering capacity building grants is a critical tool for nonprofit sustainability and growth. We’ll cover what capacity building grants are and how to write them, where to find capacity building grants, and examples of foundations providing capacity building grants.
Let’s jump in.
What are Capacity Building Grants for Nonprofits?
If we were to simplify a nonprofit down to two distinct parts, we would identify operations and administrative tasks as one part and projects and community-facing efforts as the other. Grant funding tends to focus on the latter. Nonprofit leaders and executives know their organization cannot grow or efficiently function without the former.
Enter capacity grants. According to the Council of Nonprofits, capacity building is “an investment in the effectiveness and future sustainability of a nonprofit.” It is the strategic planning and implementation of operational and organizational structures and long-term goals.
Capacity building is also building efficiencies and sustainability into a nonprofit, providing resources to grow and realize its goals.
Capacity building grants, therefore, focus not on the outward-facing work of a nonprofit but the inner workings of the organization. A capacity building grant recognizes the need for effective management within nonprofits and provides funding to support administrative systems and operations.
Ultimately, capacity building grants for nonprofits build organizational effectiveness. These funds come in a few different forms, and it is important to distinguish between capacity grants that have space for flexibility versus those that target specific organizational functions.
Restricted Versus Unrestricted Grant Funding
Grant funding can be classified into two categories: restricted and unrestricted funding. Capacity building grants can be found in either category; however, they tend to primarily come through unrestricted grants. The difference between these two types of grants is in the specificity of spending requirements.
Restricted grants require you to spend funds in a clear and outlined way while unrestricted grants allow grantees to spend the funds for whatever legal purpose they choose.
There are more and more grantmakers recognizing the need for unrestricted grant funds for nonprofits in order to allow leaders the flexibility to grow their organizations. Even within restricted grants, grantmakers are seeing the value in the integration of capacity building across all grant monies. This growing body of understanding has led to the increased availability of capacity building grants for nonprofits.
Why are Capacity Building Grants so Valuable?
The Center for Effective Philanthropy has posted a number of blogs relating to the importance of capacity building grants. In one article showcasing the efforts of the Children’s Investment Foundation, they emphasized that the structure and operations of an organization are often more critical to impact than program design.
Capacity building grants are valuable because they provide the ability for a nonprofit to dedicate resources toward internal systems development which is the backbone in the effectiveness of nonprofit programs. Capacity building grant funding goes toward efforts to innovatively build organizational effectiveness, provide general operating support, contract with external learning providers, develop communities of best practice, and collaborate (NPCrowd).
Capacity building is not what will make up flashy and impressive testimonials of the impact of your nonprofit. However, without a focus on capacity building, those impact statement outcomes will likely be challenging to accomplish.
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How to Write an Effective Capacity Building Grant
While capacity building is critical in ongoing effectiveness in a nonprofit, it is no less challenging to position your organization to articulate your need for funding these efforts. Many grantmakers still find paying for capacity less appealing than funding innovative and impactful programs.
Nonprofits need to approach capacity building grant requests from a place of strength and confidence in their organization, rather than an ask to be rescued (Susan Chandler).
Each capacity building grant will outline specific application requirements to follow, as do all grant applications. But, for some nonprofit leaders and grant writers who are familiar and experienced writing grants to fund programs, capacity building grant applications may seem challenging.
Prior to completing these applications, it is important to examine your nonprofit through a capacity lens rather than a program lens.
The following considerations will help you identify key facets of your organization as you approach writing an effective capacity building grant:
1. Identify the areas of need in your organization that may be most impactful in achieving your long and short-term goals.
Where are the gaps or areas for improvement that can move your nonprofit from good to great? For the purposes of capacity building, these needs should not include things like program development and expansion or capital expenditures. Instead, start framing critical needs that reflect organizational effectiveness, such as:
- Strategic planning
- Human Resources
- Fiscal management
- Technology improvements/ systems innovation
2. Identify actions and measurable outcomes.
Many grantmakers struggle to see what specific actions their funding supports when awarding capacity grants or unrestricted funding. Operational support can be ubiquitous and difficult to clearly define. For a strong capacity-building grant application, clearly identify the action steps you will take with the addition of financial resources.
It is also important to apply measurable outcomes to these action steps. Just identifying your intended efforts does little to show the impact you believe these steps will have on your nonprofit.
Determine and share your SMART goals related to your funding request (Specific, Measurable, Achievable, Relevant, and Time-Bound).
Being able to show you have considered the measurable outcomes tied to capacity funds shows grantmakers there is a valid and tangible need in your organization.
3. Link to the grantmaker’s mission and vision statement.
Similar to the challenge in defining outcomes as a result of funding capacity building, general operational efforts are not easily linked to a foundation’s philanthropic goals. Make the link for them.
Research the grantmaker and learn more about their mission and vision. When you write your capacity building grant, directly reference how your organizational growth or expansion reflects the mission of the grantmaker; describe how their investment in your organization’s capacity will better position you to continue to carry the mission of the grantmaker.
4. Articulate sustainability.
Being able to describe sustainability is not new in grant writing. Writing a grant for a program can prove challenging when asked to articulate sustainability, as often the program is funded entirely by the grant monies.
Capacity building grants may actually be one type of grant that makes the question of sustainability a bit easier to define. Your hope for an infusion of capacity building funds is likely centered around sustainability for your organization.
This is the grant that will let you really highlight the vision and strategic planning efforts you have to grow and sustain your nonprofit.
Where to Prospect and Find Capacity Building Grants
There are many places to find capacity building grants. You need to know what to look for when searching for capacity building grants. We will cover some example foundations that provide capacity funding grants in the next section.
First, we will explain some of the key features to look for when looking for capacity building grants and where to search.
Prior grant awards
One place to consider starting your search for capacity grant funding is through the foundations that have already awarded you program funding. You may have the ability to articulate your need for capacity funds in tangent with your proven, successful program outcomes.
You may also find it useful to dig into the past grantees of a funder. You can use Instrumentl to quickly identify good fits for you.
Here’s an example of data Instrumentl can show you about a funder:
From this view, you can see that this particular funder has given roughly 23% of its grants each year to new grantees within the last three years. You can also see how new grantees are averaging slightly higher grant amounts than repeat grantees.
Online grantseeking tools
Take advantage of online tools like Instrumentl to discover and research grant opportunities in one place. Instrumentl is the only institutional fundraising tool that helps you bring grant prospecting, tracking and management to one place. Other tools will often only cover one aspect of the grantseeking process. Instrumentl shows you active grant opportunities that fit your nonprofit’s profile so that you can save time every week and increase your grant applications 78% within a year of use.
For federal grants, a single searchable tool like Grants.gov is a good starting point to find capacity building grants.
Know the keywords
We have been referring to these funding streams as capacity building grants. It is important to note that you might see funding for operations and general organizational support under a few key terms. Be sure to consider multiple search queries when looking for non-programmatic funding. Some common keywords in addition to capacity building to consider include:
- Unrestricted or nonrestricted funding
- Organizational development
- Organizational effectiveness
- Funding plus
- Leadership development
- Technical assistance
Check out this list of grants for more general categorizations of grant opportunities.
Example Foundations Providing Capacity Building Grants for Nonprofits
There are several foundations that provide capacity building grant opportunities. In fact, in 2020 many foundations signed on to a pledge to improve their grantmaking support of nonprofit capacity building. Leveraging Instrumentl and searching for “capacity building” brings up a wide berth of grant opportunities. Some foundations providing capacity building grants are:
Citi Foundation provides funding for a multitude of grant efforts that focus on improving economic progress, especially in low-income communities around the world. Their grant efforts often include less restrictive funding that could be utilized for capacity building.
Disabled Veterans National Foundation
Example capacity grant: Capacity Building Grant Program
The DVNF is an example of an open-ended, unrestricted grant for capacity building. The terms are defined as any organization that is working to support veterans and disabled veterans. The only constraints are around applying solely for salaries, overhead costs, or general expenses exclusively. There are multiple examples of prior spending through this capacity building fund.
Example capacity grant: Technical Assistance Grants
The Ford Foundation is a well-known foundation offering millions of dollars in grants. This foundation has pledged to support grantees in their capacity needs as well as innovative program development. They are also offering grants intended to help organizations build their internal capacity.
National Science Foundation
Example capacity grant: EHR Core Research (ECR): Building Capacity in STEM Education Research
The intent of this grant is to build research capacity in STEM Education. The National Science Foundation infuses grant resources into career development for those who may be interested in STEM education research.
New York Life Foundation
Example capacity grant: Grief Reach Grants: Capacity Building
New York Life Foundation has multiple grants available for capacity building. The listed uses of these grants are right in line with the categories outlined in this article: planning activities; staff/board development; strategic relationships/collaboration; internal operations; technology improvements; or new organizations.
Foundations across multiple industries provide capacity building grant opportunities. Explore familiar foundations’ websites and look for grants that provide opportunities to build your organizational capacity. There are also many foundations that are more local to your specific region. Be sure to look for regional foundations that provide capacity building grants as well.
Wrapping Things Up: Capacity Building Grants for Nonprofits
Nonprofit leaders are tasked with managing and sustaining their organizations while innovatively pushing programs and services forward. Often, supporting the behind-the-scenes functions of sustaining and expanding nonprofit organizations is left out of traditional grant scopes.
However, more and more foundations and grantmakers are including capacity building as part of their philanthropic effort to support nonprofit organizations. These capacity building grants are a valuable resource to explore in order to better serve your stakeholders through improved organizational structures.
In this article, we covered what capacity building grants are, where to find them, and what to consider when writing for capacity building funding.
To start finding capacity building grants for your nonprofit, create a 14-day free account on Instrumentl.