It is the fundamentals of an organisation—arguably more so than great programme design or execution—that are key to delivering high impact. This insight drove a recent decision by Children’s Investment Fund Foundation (CIFF), where we work, to set up an Organisational Development (OD) team to support our nonprofit partners with their capacity building needs. This new direction represents an important shift away from focusing predominantly on programmatic funding.
It took us a long time to realise that individual programme funding could be myopic; that such funding could put a strain on the programme itself, because the rest of the organisation would often be unable to keep pace, adapt, and deliver to what the programme was trying to achieve.
Individual programme funding can be myopic and such funding could put a strain on the programme itself.
Today, we realise that at times our partners may not have the time, capacity, or funding to develop strategies, build internal systems, cultivate good governance, and foster leadership—all of which are critical to creating impact on ground. Restrictive funding practices that limit non-programmatic or core support also contribute to this problem.
Moreover, oftentimes funder and partner conversations on capacity building do not happen, or when they do, they do not connect the dots between capacity building and impact, or arrive at common priorities and measures of success. This could happen due to the lack of an organisation building mindset and/or due to the difficulty of measuring the impact of an OD grant.
This situation limits the effectiveness of partners themselves but also sometimes diminishes the potential of programmes.
Related article: Why funders must invest in organisational capacity
The need for organisational development
At CIFF, we do a grantee survey every few years. From it, two things emerged: first, we realised that there were common capability gaps across a number of nonprofit partners, and they were probably not going to fill them on their own. Second, our grantees encouraged us to think about what value CIFF was adding beyond funding programmes, because as donors we had historically focused on programmatic funding.
It was only when we started looking at our strongest relationships that we realised that when we had invested time and effort in areas beyond the programme, we were able to build trust and credibility in the eyes of our partner. For instance, sitting through a programme review is obviously useful, but not the same as helping your nonprofit partner by sitting through an interview panel to hire for a non-programme position. Lastly, our grantee partners requested our support with building their own capacity.
In October 2018, CIFF decided to set aside funding—one percent of our multi-year value (MYV)—to strengthen the institutions with whom we partner. OD is still a very young function at CIFF, and we are constantly learning from our experience. Here are some of our early lessons.
First, a ‘one size fits all’ approach to capacity building will not work.
It is important to work closely with partners to identify areas they would find most useful to achieve their current and long-term goals. These could include:
- Governance and leadership
- Strategic clarity and planning
- Monitoring and evaluation, strategic communication, and digital strategy
- Risk management and fundraising
- Human resources, financial management, and technology
In our case, sometimes our programme team identifies a potential capacity building need of a partner, and reaches out. Other times our partners take the initiative to request support. Regardless of who initiates the request, partners must finally determine what type of OD support they require. This is important because different OD support is needed at different growth stages of an organisation, and as donors we need to be cognisant of that.
Different OD support is needed at different growth stages of an organisation, and as donors we need to be cognisant of that.
For instance, at CIFF, we often incubate new organisations, which provides us an opportunity to innovate and push beyond the constraints of an existing ecosystem. Our OD work helps in both setting up these new partners and in building their capacity. Operational support is critical at this stage for an effective start, for autonomy, and long-term stability. And this support would look very different if the partner we were working with was more mature and further down the growth phase.
Partners’ readiness at the board and leadership level is essential
For any OD intervention to be successful, it needs to come from the top. Readiness also refers to factors such as partners’ recognition and desire to make changes, and the staff’s capacity to manage and participate in the project. Additionally, there needs to be significant involvement from the donor’s programme team—the people who understand the partner and their needs intimately.
Related article: How to fund capacity building well
Short-term, targeted OD support can have positive and early effects
We believe targeted OD support with clear expectations can quickly improve partners’ capacity and performance. It is important to agree upon metrics and milestones to track progress, and to review them without making it a rigid process. For instance, we worked with our nonprofit partner Triggerise (based in Africa), to rethink its strategic plan in order to clarify its vision and create internal and external buy-in for it. Our team’s support also helped ensure that Triggerise’s outcomes were actionable and realistic, which helped them plan better, and also ensured that their transition from a startup to a ‘scaled up’ organisation would go as smoothly as possible.
Since the impact of OD efforts can be quite subjective and results may take time, it is also useful to work with the monitoring and evaluation (M&E) team to develop a more robust way to measure outcomes from OD grants.
Partner buy-in is key
Connecting the dots between capacity building and the partner’s organisational objectives is key, as capacity building initiatives are successful when partners see these as critical to achieving their aspirations, and not as an activity to satisfy the funder. OD efforts involve change management, which needs to be owned by the organisation’s leadership. And so it’s also important to have a governance structure and cadence in place.
Capacity building initiatives are successful when partners see these as critical to achieving their aspirations.
Funders can play a big role in getting the nonprofit’s leadership to think about investments that could have a multiplier effect. And since it’s usually the programme team that is the liaison with the partner, it is important that they are equipped to offer the kind of solutions that our nonprofit partners are seeking.
Ultimately, if we want to close the capacity gap in our sector, we need both funders and nonprofits to work together. Collaborating closely on OD provides donors and the partner an opportunity to talk about organisational challenges and needs without impacting programmatic work and funding.
As CIFF looks towards the future, we are keen to build a community of funders who believe in the value of organisational development.
Correction: An earlier version of this article stated an inaccurate allocation of CIFF’s funds towards OD. This was corrected on January 30, 2020.
- Learn from foundations ranging in size, mission, and geography, about their strategies for capacity building, as well as how to facilitate informed, thoughtful judgments about strengthening organisations.
- Read about why philanthropy should pay-what-it-takes to achieve impact.
- If you are a funder who already supports organisational development, share with your peers the lessons you’ve learned on how to assess the impact of such grants; engage your grantees in the evaluation design and implementation; communicate your challenges to others so they don’t repeat the same mistakes; and, become a more vocal advocate of the value of investing in institutions. If you are a funder who is just beginning to support organisational development, wherever possible, co-create with your grantees.
- Connect with the authors to learn more about how they initiated the process, their learnings, and the challenges, by writing in to [email protected]
- If you are a donor, intermediary organisation, or nonprofit and would like to share your perspective, research on, or experiences with organisational development efforts, [email protected]