By Sneha Arora and Jyotirmoy Chatterji
The pandemic revealed how urgent it is to foster sustainable and resilient institutions at the grassroots, and also how non-profit organizations were hit severely, with their operations coming to an abrupt halt. A 2022 study by Bridgespan noted that 70% of non-profits reported their organizational development needs were not supported by most funders.
Capacity building is one of the most complex aspects of what it takes to impact lives at scale and is a critical element in ensuring non-profits’ sustainability, resilience, and effective functioning. While technical and programmatic proficiency is essential, scaling up of impact requires investment in strengthening internal systems, processes, and people beyond the programs. The truth is that only a tiny proportion of India’s more than three million non-profits have achieved significant scale.
Barriers to Capacity Building
There has been growing awareness among funders, especially families, that supporting the capacity-building of organizations is as crucial as supporting a cause. The GivingPi case study in the India Philanthropy Report by Dasra and Bain & Company highlighted a notable shift in the giving aspirations of traditional family philanthropists and first-generation wealth creators, with 41% of them keen towards investing in ecosystem strengthening, which includes capacity building for non-profits.
Despite the existence of multiple capacity-building service providers and interventions for non-profits, gaps remain. A strong body of quantitative data that shows the long-term impact of such efforts continues to be fragmented and not properly documented. This lack of data-based insights makes it challenging to measure impact, advocate for philanthropic resources to be allocated towards capacity building, and design effective programs that drive greater impact. Atma’s Accelerator Programme is an example that showcases the effectiveness of long-term capacity-building investment. The program worked with non-profits in the education domain to meaningfully scale innovative solutions and improve student-learning outcomes. They found that 77 percent of NGOs who were part of the program reported improvement in their skills and 75 percent reported improved organizational processes. The participating NGOs reported a 2.2x increase in their funding, a 2.1x increase in their staff size, and a four-fold increase in the number of stakeholders served.
In addition, funders and their grantee partners struggle to establish a shared understanding of the different aspects of capacity building. Limited geographical and cultural contexts, and limited in-house expertise for capacity building, become obstacles for funders to overcome when attempting to navigate these conversations. External vendors and intermediaries with capacity-building expertise have helped funders provide tailored support when they have limited in-house knowledge. Edelgive’s partnership with ToolBox and Packard Foundation’s shared services list are examples of multi-sectoral collaborations that provide specialized capacity-building support and knowledge-sharing platforms for non-profits and funders, respectively.
Pathways to support capacity building
Funders must take on the responsibility to support organizations in building sustainable institutions that improve their effectiveness, efficiency, and reach. By doing so, they can enhance social productivity beyond their resources. Philanthropies and foundations backing non-profits as an entity can provide them the flexibility to invest in longer-term projects.
Here are some pathways for funders to consider:
Provide unrestricted capital: Many funders now recognize the need to provide flexible capital that can be used to strengthen the institutional backbones of their grantee partners. Despite the recognition, they are hesitant to move to action. Family foundations, such as the Harish and Bina Shah Foundation have been quick to adapt to the rising capital needs of non-profits and provide long-term flexible grants.
Invest in existing funds focused on capacity building: Investing in pooled funds for capacity building and flexible funding is another pathway to consider. For example, Rebuild India Fund, provides flexible 5-year grants to grassroots and community-based non-profits and provides need-based capacity-building support.
Collaborate with capacity-building service providers: Partnering with capacity-building experts can be an effective way to capacitate non-profits to be resilient in the face of challenges.
Provide non-financial support: Funders can also provide non-financial assets in the form of mentoring and advisory support to non-profits. For example, tech-savvy funders can use their knowledge of technology to assist non-profits in improving their use of data for impact.
As we set our eyes on India@100, it is imperative to identify innovative pathways for increased financial and non-financial investments toward building the capacities of non-profits and ushering them into the next phase of growth. It will be necessary to rethink the funder-grantee relationship and require a paradigm shift in the way philanthropy approaches funding implementation.
Based on the assessment of the impact of Atma’s Accelerator Programme, undertaken by Sattva Consulting Pvt. Ltd. and commissioned by Atma Education. The study was conducted between July 2022 and November 2022. Sattva conducted in-depth interviews with 23 organizations and quantitative surveys with 21 organisations that have been part of the Accelerator Programme between 2016-2022.
While Arora is CEO of Atma, Chatterjee is the Head of GivingPi