In Supporting Grantee Capacity: Strengthening Effectiveness Together, we look at how funders approach building capacity with grantees. Through examples from foundations ranging in size, mission, and geography, we explore various strategies for capacity building and the types of awareness that funders can choose to incorporate in decision-making to facilitate informed, thoughtful judgments about strengthening organizations.

What's in the Guide?

• Broadening the Grantee Capacity-Building Conversation: Funders worldwide are thinking about how to strengthen grantee organizations. We provide our definition and approach to capacity building and share important frameworks for the conversation.
• Exploring Investment Approaches to Capacity Building: Foundations approach grantee capacity-building efforts differently and agree that there is not one correct investment approach. We provide a menu of investment approach options along with several examples exploring how and why each has been used in various situations.
• Lenses to Focus and Inform Grantmaking: Decision-making around capacity-building support comes down to the ability to make sound judgments. We share important ideas for funders to consider before determining if an investment should be made and how.
• Knowing Your Own Capacity: Many funders do not truly have the capacity to undertake certain capacity-building efforts themselves. We share five important questions for foundations to reflect on to help inform what kind of capacity-building partner they would be.
• Acknowledging Power Dynamics: Every funder-grantee relationship has power dynamics, which become especially important to recognize in conversations about capacity building. We share suggestions from funders about tuning in to these dynamics and how to create an environment that is as candid and level as possible.
• Assessing the Impact: The Holy Grail: Measuring the impact of capacity building is challenging but important to encouraging greater investment within foundations and to the recipient organizations themselves. We provide process-oriented advice from funders about how to investigate impact from the beginning of a capacity-building engagement and what to do with what you learn.
• Putting It All Together: This guide shares many perspectives about how to approach the capacity building with grantees and also underscores that there are no right answers, only informed judgments. In these two composite case studies, we put you in the analysis and decision-making seat and encourage you to see how your ideas align with those of your colleagues.

Plus, special insert sections on:

• When you're the lone voice for capacity building
• Engaging the right capacity builders
• How to address issues of grantee capacity

The crises affecting our nation and the world have prompted philanthropists to become more organized, focused, and, perhaps above all, "strategic" in their efforts. The movement toward "strategic philanthropy" has already contributed to greater philanthropic effectiveness. Yet, despite important contributions to education, health, the arts, and the environment, it is clear that philanthropy's ultimate impact is still limited. Great disparities along the lines of race, gender, class, and other identity markers persist and, in some cases, are even exacerbated.  NCRP researchers Jagpal and Laskowski draw on common themes seen in a series of reports to demonstrate how a social justice approach produces concrete results and society-wide benefits regardless of issue focus.

Nonprofit organizations face a long list of challenges that start with fundraising and can include everything from meeting increasing demands for services to utilizing technology most effectively. Who do they turn to for assistance as they grapple with these issues? One source of assistance and support can be foundations, which have a vested interest in nonprofits’ success—and the resources to help.

To help foundations understand whether nonprofits feel their challenges are well-understood and to raise awareness of the areas in which more foundation assistance could be beneficial, The Center for Effective Philanthropy (CEP) surveyed a panel of 296 nonprofit executives directors. CEP asked these leaders to reflect on how challenging each of the 25 issues is to their organizations. For issues not related to contributed revenue, they were asked to indicate whether or not they believe foundations are in a position to help, and whether they are looking for more help from foundations. The data clearly show that nonprofits are not looking to foundations to solve all their problems. But in some crucial areas, they are looking for more help and do not believe foundations are doing all they could. 

With the complex challenges our nation faces, the need for grassroots leadership is urgent, and there's a lot at stake. Cultivating Nonprofit Leadership: A (Missed?) Philanthropic Opportunity looks at how supporting grassroots nonprofit leaders can smash silos, create unforeseen alliances, and boost the impact of the nonprofit sector.

The report provides critical information about the state of leadership development in the nonprofit sector, explaining its importance while assessing current rates of foundation grantmaking. The report profiles leaders who have benefitted from leadership development training analyzes leadership development programs that are leading social justice movements and identifies ways that funding for this strategy directly helps foundations achieve their goals.

Findings from an analysis of Foundation Center data between 2003 and 2012, which include:

• Leadership development funding comprised just 0.9 percent of total dollars granted and 0.8 percent of total grants.
• 3.9 percent of "social justice" grants go toward leadership development.
• 54 percent of leadership grants qualified as social justice grants.

Finally, the report addresses misperceptions that often keep foundations from funding leadership development programs. For foundations that wish to effectively support these activities, the report offers the following recommendations:

• Increase or begin support right away.
• Integrate leadership development with program strategy.
• Engage grantees as true partners.
• Use a culturally inclusive approach.
• Build organizational capacity that supports leadership development.

Board members and staff of philanthropic institutions regularly reach out to CMF to learn more about “tipping” and the public support test. Grantmakers of all types may encounter the public support test, whether in respect to their own organizational status or the impact of their grantmaking on public charities. As good partners, grantmakers should help nonprofits be aware of the potential impact of large gifts and grants on their public charity status.

This resource is intended to explore frequently asked questions involved in preventing and managing through challenging operational and grantmaking situations, primarily around situations of financial mismanagement and fraud. 

While every situation is unique, this document contains general guidance that may provide a starting point for grantmakers facing this type of crisis internally or in connection to a foundation partner. This resource may also be of benefit to nonprofit organizations broadly, as much of this content is relevant for all sector leaders working together in support of their communities.

This resource provides guidance for foundations on making grants to a variety of institution types, informed by frequently asked questions submitted via Ask CMF. While grantmakers are automatically allowed to make grants to public charities (501(c)(3) organizations), they may or may not have the infrastructure in place to make grants to other institutions, such as businesses, individuals or other non-501(c)(3) organizations. Some of the categories of grantmaking described in this resource are relatively rare or impermissible for certain types of grantmakers, as designated in the comparative chart and descriptive sections of this document.

This document is a reference tool for those who are considering establishing a scholarship program or other grantmaking program that benefits individuals.

It provides an overview of important distinctions for establishing scholarships among the three primary institutions that house scholarship programs:

• Community Foundations and Other Public Charitable Entities
• Private foundations
• Corporate Giving Programs

Growing numbers of charities are using the theory of change as a strategy and evaluation tool. This popularity is partly a symptom of funders asking charities to provide a theory of change in their application or evaluation. But can the approach also be useful for funders themselves; and how does the tool differ in this setting?

The theory of change describes the change you want to make and the steps involved in making that change happen. It also captures the assumptions behind your reasoning, and where possible, provides evidence to back them up. It is enormously helpful as a tool for both strategy and evaluation—and yet most funders do not use it.

Without the kind of strategic thinking it encourages, our concern is that funders could be missing opportunities to identify neglected issues and join up funding with others.

Theories of change are not for all funders; the benefits will differ depending on how far a funder is able to go in completing one. Some funders are able to draw out a full theory of change, whereas others are only able to do a partial theory of change.

This report talks through three different types of theories of change, each relating to one type of funder impact:

• a theory of change for impact on beneficiaries;
• a theory of change for impact on grantees; and
• a theory of change for impact on a social problem.

For each theory of change, the report discusses the associated benefits, how the theory of change should be used, and what types of funder it is useful for.

Project Streamline helps grantmakers reduce the burden of grantmaking requirements, so grants management professionals can obtain the information they need to make good grantmaking decisions and help their organizations and their grantseekers dedicate more time to mission-based work.

Project Streamline addresses the cumulative impact of grantmakers’ distinct and often laborious application and reporting requirements, which can undermine nonprofit effectiveness. Often, grantseekers devote excessive, untold time to pursuing funds (many times without a payoff) and reporting on grants (many times without benefit) at the expense of helping those they serve.