"By investing in leaders, organizations, and networks, we help create more powerful and impactfu fields and movements."

-Philanthropy CA Full Cost Project-

Tutorial 3: Donor's Perspectives on nonprofit capacity building

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.


It comes as no surprise that we believe in fueling nonprofits to achieve maximum good. However, not at all times and under all circumstances - there are no hard-and-fast rules. Even the most conservative perspectives outline are not without merit. Some nonprofits are poor managers of their operations; Others could improve by being more entrepreneurial; We also believe it is wise to be cautious when providing capacity funding. At the same time, if you read the stories on our site, you might share our excitement about the tremendous and transformative results achievable when engaging in capacity funding under the right circumstances.

Proceed to Tutorial 4

  • Stories of Impact

    Our site provides stories and testimonials where small amounts of “investments in people” achieved exceptional outcomes.

  • Fuel Philanthropy Support Organizations.

    Large macro-level results can be achieved by supporting organizations that achieve broad, far-reaching impact.

  • Take Our Quick Tutorials

    Each one can be completed within 5-10 minutes!

Pass Our Stories Forward