Education and youth nonprofits get little or no help with most of their capacity needs, a national survey finds
Only 19% of the nonprofits surveyed received a grant designated for capacity building in the past year, and fewer than half of funders fund it at all, according to the first State of Capacity Building report from Catalyst Exchange.
Nonprofits with private foundation grants, by budget size
New Orleans. Nonprofits working in education and youth development received no or very little support for 57% of the capacity needs they identified across 18 areas of their operations, according to a report Catalyst Exchange released on Oct. 13.
The report, Closing the Capacity Gap: Bridging the Distance Between Nonprofit Mission and Organizational Capacity, is the first from the group's State of Capacity Building study. It draws on a national survey of 408 nonprofits, 135 funders and 101 intermediaries. Catalyst Exchange, a national nonprofit that works on organizational capacity in the sector, says the edition sets a baseline that later reports will track. Blue Meridian Partners supported the study.
Agreement on needs, little money for them
Nonprofits and funders largely agree on what is needed. Fund development (66%) and revenue strategy (52%) were the top needs nonprofits named, and funders pointed to the same areas. Yet fewer than half of funders report funding capacity building, and only 19% of nonprofits received a grant designated for it in the past year. Funders cited a lack of dedicated funding (49%), limited expertise (27%) and capacity building falling outside their funding priorities (24%).
Most nonprofits pay for it themselves, if at all. The report's summary says 56% invest 2% or less of their budget in capacity building, 48% of nonprofits and intermediaries finance it from their own operating funds, and 16% invest nothing.
Where support arrives, results vary. Most nonprofits (69%) saw some benefit in the past 12 months, but only 13% rated the results as highly effective. Three in five funders have no way to capture capacity needs, and only 33% of nonprofits say funders ask them about capacity. Nearly half of nonprofits are exploring artificial intelligence without adopting it, held back by limited staff time (44%), uncertainty about where to start (36%) and funding (33%).
Smaller organizations fall further behind
The gaps are wider for nonprofits with budgets under $1 million. Of them, 25% regularly struggle to meet funding needs, against 6% of larger organizations; 34% do not know where to start, against 16%; and 27% see no improvement from capacity building, against 14%. Fewer of them hold private foundation grants, 63% against 88%. Black-led nonprofits were more likely to report improvements, the report found, but described difficulty reaching funding and culturally responsive providers.
Leona Christy, the group's founder and chief executive, described the accumulated unmet needs as "capacity debt."
“This research gives us a clearer picture of where organizations are feeling that pressure and establishes a baseline for the field to learn from what works, strengthen organizational health and build a stronger, more resilient social sector.”
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