Ensuring the stability and sustainability of non-profit organisations (NPOs) can help them to better support underserviced citizens and achieve a thriving society. Now more than ever, corporate partners and funders of the sector can strengthen the role non-profits play by assisting them to build the capacity they need, through financial and non-financial support.
The business case for capacity building
The role that NPOs play in society has never been more starkly illustrated than during the Covid-19 pandemic. Despite a lack of financial support from government and extraordinary resource constraints, they have gone to great lengths to ensure that people have been fed and have been able to access the services they need during a time of ongoing crisis. They have needed greater support to continue operating effectively. With a lot of funding directed to disaster relief, NPOs that are not working in this area have had their regular funding streams dry up, with a number on the verge of closing.
Looking beyond Covid-19, however, it is becoming increasingly important to think about how to make NPOs more resilient and self-sufficient, which will allow them to operate more strategically. Many NPOs lack the resources and capacity to look up from the daily tasks of providing services to their beneficiaries. This places them at risk because they spread themselves thin and are unable to focus on what they themselves may need. The tools and interventions they require range from improved technological infrastructure, training and upskilling, to implementing monitoring and evaluation, growing stronger leadership, and improving governance structures.
Investing in capacity building is important as it creates stability and sustainability in NPOs, which averts risk. For the Children’s Investment Fund Foundation (CIFF), two key insights emerged when it engaged with its partner organisations about matters other than funding. CIFF realised its partners had common capability deficits and that it had not established sufficient trust and credibility to work closely with its partners, who felt unable to ask for support outside of specific programmes.
CIFF recommends that funders do not apply a one-size-fits-all approach and rather look at what organisations need to achieve their goals, both in the short and longer term. Funders should help their partner organisations to connect the dots between capacity building and achieving their objectives. Capacity-building initiatives will then become critical to their organisations, rather than exercises to appease funders.
Companies should likewise consult their NPO partners to analyse what supportis needed. When companies focus on programmatic funding, they may unwittingly limit their partners’ efficiency, according to CIFF. “It took us a long time to realize that individual program funding could be myopic; that such funding could put a strain on the programme itself, because the rest of the organization would often be unable to keep pace, adapt, and deliver to what the program was trying to achieve,” CIFF argues, indicating that it has set up an organisational development team to support its partners with their capacity-building needs.1
Non-financial support can be extremely valuable to NPOs, from helping them to transition into social enterprises through workshops and training, to donating or bartering goods, products or services. This is a low-cost, low-risk way to assist organisations while developing a closer relationship with them. At the same time, it is vital to continue to listen to them as circumstances alter. During the pandemic, some NPOs pointed out that they would have preferred to receive help in specific areas rather than just donations of potatoes, for example. This rule of thumb applies to regular as well as new partners, since needs have changed so rapidly during the pandemic.
According to an article in the Stanford Social Innovation Review, capacity building should be viewed from the perspective of building on an organisation’s core strengths, rather than fixing its weaknesses. Identifying where NPOs deliver distinctive value to their stakeholders and partners is more important than trying to maintain a ‘just good enough’ standard by plugging gaps within an organisation. To do this, NPOs need to know what they do best, set themselves up to leverage their strengths, and use capacity building to unleash these strengths while addressing needs. In this way, NPOs can focus on their unique competencies and areas of expertise, giving their funders a more compelling reason to support them.2
“Funders should help their partner organisations to connect the dots between capacity building and achieving their objectives. Capacity-building initiatives will then become critical to their organisations, rather than exercises to appease funders.”
Types of capacity-building support
Trialogue’s 2020 primary research asked corporates about the types of capacity- building support they offer, and further asked NPOs which types of support they would like to receive.
Most companies surveyed reported providing NPOs with some form of capacity building, with almost two-
thirds providing workshops and/or training (64%), followed by mentorship programmes (46%). The least common types of capacity-building interventions were pro bono support (16%) and staff secondments (10%). While most NPOs surveyed said they had received capacity- building support, this was mainly in the form of workshops/training (49%).
What emerged, however, was the insight that flexible funding for internal capacity building was the intervention most desired by NPOs (35%), which only 20% of companies in the sample claimed to have offered. Such flexible funding makes it easier for organisations to include capacity building as part of their ongoing strategy. For almost one-quarter of NPOs (23%), the secondment of staff to their organisations was the least desired type of capacity building.
While there is no ‘right way’ to provide capacity-building support, GEOfunders suggests that the ‘three Cs’ be borne in mind – making such support contextual, continuous, and collective. Contextual support involves meeting the unique characteristics and needs of organisations, since no two are alike, which may require many listening sessions. Continuous support involves long-term commitment to organisational transformation, with once-off workshops unlikely to bring about meaningful change within an organisation or help it to become self- sustaining. Finally, collective support involves working together with other companies to increase impact and promote greater knowledge-sharing, making sure that all the parts add up.3
Various types of capacity building that organisations can and do offer are outlined below.
Workshops and/or training
These are opportunities to improve the skills of NPO staff on topics including governance, management, finance, marketing, fundraising, human resources, and monitoring and evaluation, usually in limited-duration training sessions or workshops. The NPOs in Trialogue’s research indicated that the most sought- after skills were fundraising (63% of NPOs), marketing (48%) and finance (30%).
Some companies arrange workshops for their NPO partners on a regular basis while others allow the NPOs to identify and choose the training most relevant to their needs.
In South Africa, The Resource Alliance tailors a capacity-building programme aimed at strengthening NPO sustainability through a 12-month bespoke programme led by a specialist consultant. In addition, Alexander Forbes supported its CoHubs programme with staff training and other forms of assistance to build capacity during the 2020 financial year, focusing on eight NPOs in communities across Gauteng, KwaZulu-Natal, the Eastern Cape, and the Western Cape.
The Social Enterprise Academy has partnered with companies like Remgro, Distell, and others to drive capacity- building support for their NPO partners. It designed a 12-month capacity-building programme for Distell’s grantees, with each NPO undergoing a sustainability baseline assessment and having to rate themselves across several variables. Structured interventions focused on leadership, income generation, and creating and measuring impact. Alternative financing approaches were also explored with board members and senior leaders of the organisations.
Inyathelo runs a non-profit capacity building clinic that provides one-on- one advisory, training and support
to NPOs, thanks to funding from the Charles Steward Mott Foundation. These clinics cover everything from bookkeeping and resource mobilisation strategies to governance, appointing and training board members, and how to attract funding. Community Chest Western Cape’s Leadership and Training Institute facilitates capacity-building training programmes for NPOs as part of its investment in the sustainability of the NPO sector. The training schedule for the year offers courses on women in development, grantmaking during a pandemic, project management, social impact and innovation in community development, governance during the pandemic, women, trauma and mental wellness during a global pandemic, and many more.
In the US, the Healthcare Georgia Foundation launched EmpowerHealth, a capacity-building grant programme
that assists health non-governmental organisations (NGOs). It aims to help NPOs strengthen their organisational capacity, which in turn helps them to “deliver stronger programs, take risks, build connections, innovate, and iterate”.4
These are interventions that create opportunities to improve skills in the partner organisations with an expert mentor and/or through peer mentorship programmes. Companies can provide mentors from within their organisation or can fund external mentorship programmes.
National Institute Community Development and Management (NICDAM) offers an HWSETA-registered Management Capacity Building and Mentorship Programme for Non-profit Organisations, which is designed to strengthen the institutional capacity of organisational management and enable managers to improve management systems. To date, more than 800 NPO managers have been trained in all nine provinces in South Africa.
Ziyo (formerly CMDS) works with several funders who pay the ‘accountants with heart’ to support their partner organisations in different ways, including giving advice and support to accountants, bookkeepers, and financial managers within the NPO sector. They run capacity- building workshops, with mentorship a large part of its business model.
Conferences, seminars, webinars, forums
Funders can provide access to industry events and networks, either through arranging the events or meetings themselves or by funding such access. For example, the Momentum Metropolitan Foundation, Sanlam, and the MTN Foundation all paid for ten NPOs to attend the Trialogue Business in Society Virtual Conference 2020. The Collaboration Dialogue has hosted a series of information-sharing sessions for NPOs in the past, covering the topics of risk and reputation, challenges when collaborating, what donors want, and how to unlock community philanthropy.
In May 2020, Trialogue held a webinar attended by over 300 NPOs on how Covid-19 was affecting the sector. This was followed in July 2020 by a Women in Philanthropy SA (WiPSA) webinar on surviving the Covid-19 crisis, helping organisations to navigate the risks and challenges. In August, CAF Southern Africa offered a webinar on how the NPO sector has changed during the pandemic, based on five surveys conducted between May and July 2020. In a post-pandemic world, such events (virtual or otherwise) could address some of the day-to-day challenges facing NPOs, like how to improve leadership, financial management, fundraising, strategic planning and more.
Companies can provide opportunities for NPO employees to upskill themselves through academic courses and leadership studies, which are typically longer than training/workshop courses and result in formal qualifications.
In South Africa, specialist NPO Siyakhula Trust focuses on capacity building and organisational development, offering interventions that meet a variety of needs. The Trust is an accredited training provider with the Local Government Sector Education and Training Authority (LGSETA) and holds programme accreditation with the Education, Training and Development (ETDP) SETA. It focuses primarily on courses that build institutional sustainability, looking at how to compile strategic and operational business plans and budgets, manage financial affairs, develop fundraising strategies, write effective reports, grow effective networks, institute good governance, ensure legal compliance, and more. Universities also provide academic courses suitable for NPO staff, including in public and development management, social entrepreneurship, sustainability, and monitoring and evaluation.
Flexible funding for international capacity building
Perhaps unsurprisingly, NPOs have been most appreciative of unrestricted or flexible funding during the pandemic, as it has largely helped them to conduct their programme work without interruption. Flexible funding means not being prescriptive about the use of funds, allowing NPO partners to determine how they can put them to use most effectively.
The Citi Foundation’s report Funding From a Place of Trust: Exploring the Value of General Operating Support and Capacity Building Grants indicates that providing long-term general support alongside capacity-building grants is the ‘gold standard’ funding practice to drive the best possible outcomes. It recommends grant terms of five to seven years with funding allocated to achieving broader impact rather than focusing on specific projects. This allows non-profits to strategise for sustainability and cultivate greater risk awareness, as well as more capable leadership.5
The Ford Foundation advocates for more general support through its BUILD programme, which supports greater organisational resiliency. This takes on the form of larger grants of longer duration (typically five years) to enable organisational mapping and institutional strengthening. General funding makes up 70% of the Ford Foundation’s giving, indicating that it is committed to building greater resilience in an often fragile sector.
Pro bono support
Companies or institutions can facilitate the process of professionals providing services such as auditing, marketing, legal, income tax and IT support for NPOs. The Southern African Institute for Business Accountants (SAIBA), the South African Institute of Tax Professionals (SAIT) and the Department of Social Development (DSD) have launched a volunteer project to help NPOs become compliant with their financial reports and tax returns – for example, around 80 000 NPOs are non-compliant, so this is a vitally important initiative.
Werksmans Attorneys launched a fully functioning Consumer Law Clinic pro bono in Diepsloot, Johannesburg, in 2012. Working with community partner Afrika Tikkun, which first identified the need for access to pro bono legal services in the area, Werksmans offers a basket of services to low-income consumers who are either unemployed or whose households earn R7 000 a month or less. Similarly, law firm Cliffe Dekker Hofmeyr offers a range of free legal services to individuals, NPOs and other entities, including public-interest litigation, education on the South African legal system, Constitutional law, refugee law, and advice and litigation services for vulnerable individuals.
Secondment of staff
Companies can make their staff in key areas available to NPOs as part of their CSI contributions and volunteer programmes. Secondments usually span a longer period than pro bono support, typically some continuous months or years.
In South Africa, the Vodacom Foundation’s Change the World programme pays for people to be seconded to NPOs for the period of a year. Vodacom facilitates the process, matches individuals and organisations, and pays the full salary of the seconded staff. The programme was launched in 2011, and 750 volunteers have supported 75 NPOs to date.
Other types of support can include human capital management support, joining the board of an NPO, extending loans and offering donations.
In addition to retention, human capital management support can be offered as a capacity-building tool
to assist organisations to manage the career progression, performance, and development of staff members. Many corporates have access to large human resources departments that can assist NPOs with succession and career planning, performance management, mentorship, and team-building exercises. This helps NPO management and staff members avoid burnout or stagnation in their work environment.
Non-profit GuideStar’s CEO, Bob Ottenhoff, has estimated that personnel costs in NPOs are roughly 50% or more of total expenses, which is why nurturing human resources is a crucial part of capacity building. Having ‘the right people on the bus’ can drive an organisation’s success in the long term. In South Africa, the Leadership Academy and Training Institute is offering a learning model designed to deepen the human capital of organisations through ongoing grassroots capacity building for organisations, accredited higher learning programmes and specialist courses for non-profit leadership.
“Perhaps unsurprisingly, NPOs have been most appreciative of unrestricted or flexible funding during the pandemic, as it has largely helped them to conduct their programme work without interruption.”
How companies can support NPOs through Covid-19
The Covid-19 pandemic has brought uncertainty to the fore, with few NPOs confident of being able to continue to work as usual. Organisational challenges have included trying to do more with less, dealing with fear and resistance in communities, struggling to stay safe while delivering services, and looking after the mental health of staff. Because NPOs’ needs have changed dramatically, companies have had to ensure they are capable of meeting those needs. However, it has been a balancing act to respond to the pandemic while maintaining and adjusting existing programmes. Many companies have helped NPOs extend relief to communities while ensuring those organisations could operate as close to normal as possible (even as most staff members work from home).
While NPOs serving communities have found support, it is worth pointing out that not all NPOs work directly with those in need, and a number of them are not top priority for funders during the pandemic. In July, photographer Omar Badsha made a plea for support for the 20-year-old South African History Online project, which is unlikely to survive without additional funding. Many such NPOs are facing an uncertain future and may well close down.
On 23 July 2020, Trialogue hosted a webinar on what corporate South Africa could learn from philanthropy’s response to Covid-19. The pandemic appears to have accelerated a trend towards less restrictive funding and helping organisations to build capacity.
“We need to be more deliberate about building internal resilience within organisations,” Noxolo Hlongwane,
Head: Philanthropy: Nedbank Private Wealth, told attendees. “We shouldn’t just focus on programmes without helping organisations to build the systems and processes that will enable them to respond better to disasters. I hope that the practices we have been pushed towards will stay with us and we will continue to advocate for those that empower organisations and communities.”
“Because NPOs’ needs have changed dramatically, companies have had to ensure they are capable of meeting those needs. However, it has been a balancing act to respond to the pandemic while maintaining and adjusting existing programmes.”
Part of this process is reflecting on how to strategically redeploy funding to allow NPOs and communities to strengthen themselves. RedR UK, an international NGO that provides training, mentoring and technical support to NGOs, aid workers and communities, identified the most urgent capacity-building priorities during a pandemic as management and leadership, safety and security, and needs assessment. Beyond that, it has recommended capacity building in the following areas:
- Staff mental wellbeing: training managers how to support the mental wellbeing of their staff, training aid workers in how to manage their own mental health, and peer-to-peer counselling for aid workers
- Financial challenges: training to strengthen capacity on writing proposals and reports to gain more funding, training to enhance financial management capacity, and co-creative workshops to troubleshoot financial challenges in the sector
- Projects delivered remotely: training to build capacity of staff on remote models of management, delivery of projects and ways of working, and workshops to come up with creating solutions and innovative ways of working remotely within organisations.
Although there is no end in sight to the pandemic, assisting NPOs to strengthen themselves through a variety of interventions can help to pave the way for a more capable sector once the crisis has passed. What is clear is that NPOs cannot be left where they were before the pandemic – existing from month to month, able to cover programmatic expenses but struggling to cover indirect costs in a low-growth economy. A better system should be built to increase impact and deliver greater value to all stakeholders.
1 Malhotra, V. & Mundol, H. (18 February 2020). Want Impact? Strengthen Organizations.
2 Avins, J. & Huttner, N. (14 February 2020). Beware the perfectly average nonprofit.
3 Bartczak, L. (2013). Supporting Nonprofit Capacity: Three Principles for Grantmakers.
4 www.cep.org. (13 December 2018). Crafting Capacity-Building Support that Counts.
5 www.fundsforngos.org. (11 May 2020). Citi Foundation presents a Report on ‘How Capacity Building can assist Donors improve the impact of NPOs’.
This article was first published in the Trialogue Business in Society Handbook 2020