Many leaders in philanthropy support organizations (PSOs) believe that nonprofits could achieve a consi-derably greater impact if they received sufficient growth funding. We are not aware of research demonstrating how leaders running foundations view this topic. However, from our experience, we find funder’s perspectives often fit into one of four categories. Some funders believe that: .
- 1. Capacity-related problems are caused by mismanagement, or nonprofits should be entrepreneurial to cover some or all their costs. Within this category is the “survival of the fittest” perspective.
- 2. Capacity building is important, but this is not what they do. It may be that it detracts from fulfilling their mission, they feel unprepared to make a transition, don’t want to engage in risks, have not seen enough convincing evidence that this practice works, or simply haven’t given the topic enough reflection.
- 3. Capacity building is important but should be provided sparingly and cautiously. Within this category are funders who do not want to support nonprofits in environments with extensive redundancy and competition to achieve essentially the same objectives.
- 4. Capacity building is a key part of what the foundation does. However, grant recipients are often carefully vetted.