By Gohar Chichian
This article is reposted from our partners at Catchafire.
Community nonprofits play a critical role in addressing local needs and driving change. Support for developing and strengthening the vital infrastructure that advances that role can be hard to come by. At Catchafire, we partner with funders to provide capacity building resources to help nonprofits strengthen their operations, expand their programs, and meet timely community needs. This helps them focus on advancing their mission and driving positive outcomes in their communities.
Importance of Capacity Building for Nonprofits
Capacity building is essential for nonprofits aiming to achieve long-term sustainability and impact. By focusing on building capacity, organizations can strengthen their ability to fulfill their missions more effectively and efficiently. Nonprofit capacity building involves enhancing various aspects of an organization, from improving internal systems and processes to developing leadership skills and expanding resource mobilization strategies. For example, organizational capacity building may include training staff, upgrading technology, or improving governance structures, all of which are vital for an organization’s growth and success.
One of the key ways to support this growth is through capacity building grants. These grants are specifically designed to help nonprofit organizations enhance their capabilities, enabling them to better serve their communities. Capacity building grants for nonprofits can be used to fund a wide range of activities, such as strategic planning, professional development, or expanding service delivery. By securing a capacity building grant, a nonprofit can invest in its future, ensuring it has the resources needed to thrive and adapt to changing circumstances. Community capacity building is another critical aspect, as it empowers nonprofits to engage more deeply with the communities they serve, fostering stronger relationships and greater impact.
There are numerous capacity building examples that illustrate the benefits of such initiatives. For instance, a capacity building grant for nonprofit organizations could involve investing in a fundraising training program that enhances the skills of development staff, ultimately leading to increased revenue and sustainability. Whether through organizational capacity building or community capacity building efforts, the focus on strengthening the core functions of a nonprofit is vital for its continued growth and success.
Community Capacity Building: Magic Cabinet’s Approach
We hosted a discussion with Magic Cabinet to discuss how they’re rewriting capacity building to unlock nonprofit potential. Philanthropy has often committed to funding individual programs at a nonprofit versus the actual nonprofit structure. Magic Cabinet has turned that aside, creating a strategic grantmaking program focused on capacity building. During our conversation, Magic Cabinet provided insights on how they are opening unconventional paths for philanthropy to make a difference in communities.
We were joined by:
- Alexis Aviles, Engagement Officer, Bay Area
- Charlotte Basch-Lin, Program Officer, Puget Sound
- Zach Grossnickle, Sr. Manager of Brand and Communications
- Joaquin Uy, Engagement Officer, Puget Sound
The conversation was moderated by Guenevere Crum, Catchafire’s Director of Community Engagement. You can watch the full discussion here and view the transcript of the conversation below.
Joaquin: We’re a philanthropic organization, but we’re a little bit different from a typical foundation:
- We provide long-term capacity building grants for small but mighty nonprofits that serve communities in the San Francisco and Seattle areas. Some examples of capacity building grants that we’ve launched include investing in a new donor engagement platform, funding sabbaticals for seasoned employees, or even buying new computers to replace old equipment.
- We don’t just give out money for capacity building. We also assist by creating a cohort of nonprofit partners who meet regularly over the course of five years to advise each other, share insights, and vote on capacity building grant proposals. There are three nonprofits to a cohort, and we sponsor Catchafire access for all of our nonprofit partners. This includes organizations in a cohort, and those who were invited to apply, but didn’t make it into a cohort.
- Magic Cabinet organizes other foundations by sharing our evolving model and encouraging funders to adopt similar collaborative trust-based philanthropic practices.
Our engagement and grantmaking processes are supported by our five grantmaking pillars:
- Listen: Engage in dialogue with nonprofit leaders and community members.
- Focus on capacity: An effective nonprofit is more than its programs.
- Long-term grants: A five year cohort grantmaking process. We believe innovation takes time. The three organizations in a cohort divide $500,000 between themselves for the next five years.
- Commit to a community: Our cohort process focuses on one community at a time.
- Collaborative cohorts: Our cohorts aren’t just places for grantmaking, but they’re also magic cabinets where nonprofits share knowledge with each other.
Since 2019, Magic Cabinet has started 23 cohorts, awarding over $42 million to nonprofits in Washington, California, and Puerto Rico.
Zach: Our direct grantmaking was the first phase of Magic Cabinet. But there’s only so much that we can do to influence with our direct grantmaking and cohort model. So we’ve had a new emerging arm of work, philanthropic partnerships.
We’re developing relationships with other funders to see how we can collaborate and accelerate mutual funds together into new solutions…we’re really excited to try new ideas. The main thing we want to bring into these partnerships is what we’ve learned from our nonprofit partners and cohort model, which is elevating participatory solutions, trust-based models, and leaning on letting the community lead with philanthropy to follow.
Alexis: I want to highlight Open Door Legal in the Bayview District in San Francisco. They’re providing universal legal housing, and immigration support as the city has seen rapid change and gentrification. Bayview is historically a Black and immigrant working class neighborhood. As the city continues to change and BIPOC communities need legal support, the organization’s goal is to move into more neighborhoods in San Francisco. They’re part of one of our first three cohorts in 2018. They’ve grown rapidly in the last five years, expanding to different neighborhoods and opening their doors to the community. They recently did a study that showed their services in the Bayview reduced homelessness by 50% in that neighborhood. It’s really exciting to see them grow and see how they’ve been able to use the grants through Magic Cabinet to support their internal infrastructure and sustainable growth.
Charlotte: What does an organization being primed and ready for capacity building success look like? One example is Friends of the Children Tacoma; they are a branch of the nationwide organization, which supports the branches for the first five years. After that, each branch is financially independent. They hit that five year mark during their cohort time, so it’s been amazing to see how they’ve leveraged Magic Cabinet grants to prepare for that transition to more financial autonomy, by creating grants or proposing grants to their cohort for fundraising, development, and marketing. They’ve been using our capacity building grants and Catchafire to really wrap their head around what their organization looks like five years and beyond.
Charlotte: Something we’re really thinking about and trying to expand is our support beyond the grant. While grants are an essential piece of our work and supporting nonprofit capacity, we’re really trying to think more expansively.
What I’ve heard from our nonprofit partners is that Catchafire is not only a good resource for them to actually do the work, but to serve as thought partners about what capacity could look like. It’s really difficult for nonprofits that haven’t had the capacity to think, well, what can this look like for us?
So partners are utilizing Catchafire to connect with experts even when they’re just scoping out a new capacity building project that they want to propose as a grant to the cohort. Then they’re of course utilizing it once they have the grant approved and they’re diving into the project itself.
For nonprofits who have never had a fundraising event before, many have hopped on the phone with a Catchafire volunteer that is versed in event planning and fundraising, and made a big, intimidating project seem less scary by saying, ‘here are the things you need to make a successful event and engage funders.’
While we move the grant to support capacity-focused projects, it’s awesome that Catchafire is offering hands-on logistical support to actually make the work happen. As program officers, we can only do so much. So we’re able to move the funds, create the cohort, and turn folks to Catchafire to do a deeper dive on their projects.
Across the board, the top trends Magic Cabinet is seeing includes:
- Hiring and staff salaries: Last year, 60% of all 2023 cohort grants were focused on hiring or increasing staff wages.
- Recruitment and retention: Nonprofits are seeking grants to increase sustainability within and support their staff.
- Sabbaticals: Many nonprofit leaders are wearing multiple hats or founded their organization, preventing them from ever taking a break.
Alexis: Within my cohort, all my cohort members took sabbaticals and really encouraged it for each other. It’s really exciting that we can provide that support, and acknowledge that sustainability within a nonprofit also means taking care of yourself and your colleagues. That means taking time off and making sure that you have the capacity to do the work that you’re doing and to show up for your community.
Alexis: We’ve been taking a step back to reassess our grantmaking process and how we engage with communities:
- Revamping our engagement process to further community voice into our decision-making processes: As we’ve grown, we have the goal of growing outside of the Bay Area or outside of the Puget Sound, and not being as place-based. What communities have we not reached with our grantmaking and why aren’t we reaching them?
- Community outreach: We started with door knocking, talking to folks, doing our research, and began to create alternative models…There are other funders working with the communities that we’re hoping to work with that are already doing it really well. There’s no need to recreate the wheel, so how can we work with those partners to build those relationships, and continue to move money and support? We began to partner with intermediaries, like RVC, to create a fiscally sponsored cohort.
- Expanding to native communities: We learned that we had not been able to reach native communities in our work, and acknowledge that we weren’t in the space yet to create our own model to fund in native communities. We still had a lot of internal learning to do, so we looked for a native-led intermediary to partner and build relationships with, to start moving money into those communities. There’s been a lot of reassessing and pausing to create more equitable systems.
Zach: We were founded under the idea that more of our problem is with philanthropy, not nonprofits. Our entire feedback loop is actually evaluating how we are showing up with our nonprofits. We don’t ask them about their outcomes or growth metrics–they’re the experts and can evaluate their success on their own. How are we showing up in the space? We use that information to understand how Magic Cabinet can better show up and adapt our model.
Building Capacity with Catchafire
To learn more about our partnership with Catchafire, read their case study. When nonprofits, grantmakers, companies, and government come together, we build stronger and more equitable communities.
