What is Capacity Building?

Capacity building is perhaps one of the most fashionable, yet least understood term in the non‐profit sector. There is a lack of shared definition and understanding around its features and essential elements. Funders tend to talk about capacity building programs, while capacity builders might refer to capacity building engagements, yet organizations may refer to it as a set of activities or processes that accomplish a specific goal. 

In essence, this is the process by which individuals, groups, organizations, and communities increase their abilities to: Perform core functions, solve problems, define and achieve objectives; and Understand and deal with their development needs in a broad context and in a sustainable manner.”

Organizational capacity building seeks to strengthen the ability of an organization or agency to achieve a desired outcome. Capacity building in this area can be defined as: “Supporting organizations to build and maintain the skills, infrastructure, and resources to achieve their mission.”  In order to effectively support organizations to achieve the above, understanding of the features and elements of organizational effectiveness is necessary. Too often, funders, capacity builders, and organizations are focused on the process of capacity building as opposed to the outcome of capacity building. Enhanced understanding of the components of organizational effectiveness can support capacity building efforts to be effective and targeted. 

There has been a tremendous amount of interest over the past decade in building capacity for organizational effectiveness among organizations. There have been many different lenses for understanding the topic, such as: Components such as aspirations, strategy, organizational skills, HR, systems and infrastructures, organizational structure and culture; Aspects of organizational life (e.g., external relations, internal structures, leadership, and management) and Pillars of organizational capacity, such as relevance, responsiveness, effectiveness, and resilience.

On the other hand, capacity building focused at leadership is the ability of all organizational leaders to create and sustain the vision, inspire, model, prioritize, make decisions, provide direction, and innovate, all in an effort to achieve the organizational mission (York, 2005). This includes areas such as: Governance – The overall processes and structures used by the board to direct and manage an organization’s operations and activities; Internal Leadership – This refers to those organizational leaders outside of the board and their ability to apply a mission‐centered, focused, and inclusive approach to making decisions and motivating people to act on those decisions and; Sustainability – This is the organization’s ability to cultivate organizational leaders, avoid over‐relying on one leader, and plan for leadership transition.