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How Funders Can Actively Support Nonprofit Capacity Building

Wednesday, February 5, 2014

Dear Colleagues,

Recently, SCG members from the Weingart Foundation, The Ralph M. Parsons Foundation, and the California Community Foundation organized an SCG Leadership ExChange on a critical issue that confronts many of us as funders: nonprofit capacity building and the role of philanthropy in helping grantees overcome fundraising challenges. Below is a brief recap of this SCG event, including the dynamic discussion moderated by Belen Vargas, Weingart's Vice President of Programs.

During the program, we heard from Linda Wood of the Evelyn and Walter Haas, Jr. Fund’s Leadership Initiative, and Jeanne Bell of CompassPoint Nonprofit Services, who collaborated on the recent report, UnderDeveloped: A National Study of Challenges Facing Nonprofit Fundraising. Wendy Garen, President and CEO of the The Ralph M. Parsons Foundation, and Nike Irvin, Vice President of Programs at the California Community Foundation, helped to lead a conversation on funder engagement. Additionally, the Annenberg Foundation's Sylia Obagi shared some of the innovative work being done to support nonprofit capacity building through the Annenberg Alchemy program. We were also joined by a panel of nonprofit leaders, who shared how they each successfully changed their organizational approach to fund development and the challenges along the way:

  • Kay Buck, Executive Director, Coalition to Abolish Slavery & Trafficking (CAST)
  • Angelica Salas, Executive Director, Coalition for Humane Immigrant Rights of Los Angeles
  • Lisa Watson, Chief Executive Officer, Downtown Women’s Center

Several key takeaways for foundations to help support grantees’ fundraising efforts emerged from the discussion:

  • Allow for experimentation. Provide more unrestricted giving and longer-term funding commitments that give nonprofits the opportunity to invest in change and growth.
  • Have honest conversations with grantees. What are your intentions as a funder and how can you support tangible efforts for the nonprofit to improve its financial stability?
  • Encourage grantees to create a longer-term financial plan, not just year-to-year. This allows nonprofits and their funders to see the trade-offs if money is not raised. (Before embarking on a new fundraising model, nonprofits and their boards should develop long-term strategies and business plans.)
  • Support a culture of philanthropy. Fundraising is part of everyone's job at a nonprofit, and staff, volunteers and board members must all be able to speak about the impact, needs, and direction of the organization. Capacity building consultants and resources can also help to change a nonprofit’s organizational culture.
  • Help nonprofits invest successfully in fundraising. Support leadership development for the development director, not just the executive director. Bring together development directors for shared learning. Support board member training and education.
  • Educate and engage foundation trustees about nonprofit fundraising. Coordinate efforts among funders to support initiatives in order to help a cluster of nonprofits in the field, rather than one or two at a time.

Next steps: Participants were very interested in keeping this capacity-building conversation going among funders and nonprofits. SCG will develop more programs and opportunities for candid discussion around this topic.

Downloadable resources: SCG members can access the presentation and handouts from this program in our resource library. Not a member? Click here for membership information.

Thank you for being part of the SCG community and our shared efforts to help nonprofits raise the resources they need to succeed.

Sincerely,

Christine Essel
President

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