“Business as Usual”

In this historical moment, the social sector cannot afford to pursue “business as usual.” New paradigms are necessary to respond to the perfect storm of challenges that include:

• exploding needs arising from the pandemic
• impending severe reductions from public sector funding
• the systemic inequities of the racial divide

These challenges call for innovation that will enable nonprofits to do more (to meet the exploding needs) with less (to adapt to budgetary reductions) and to do it together (to overcome the racial divide). A key opportunity to do more with less and to do it together lies in our sector approach to capacity building. 

In “business as usual,” capacity building is typically pursued by organizations in isolation from each other. For example, imagine four nonprofits in San Mateo County that provide safety net services. Each recognizes the obvious: that in order to keep meeting the exploding needs of the pandemic with the anticipated cuts in public funding, each organization must increase its individual fundraising capacity. Suppose furthermore that all of these organizations on their own recognize that they have the same capacity need: an upgraded donor database system to track and engage individual donors in a more efficient manner.

How does this capacity building happen in “business as usual?”

Currently, each organization must separately expend further management time in building internal expertise to precisely diagnose its needs, explore a range of software options, find and interview vendors who are nonprofit-friendly, develop an appropriate scope of work, negotiate a favorable contract, and then manage the project. Furthermore, each organization must seek its own funding for this project, whether from its existing operating budget or from a new grant. For many nonprofits, this entire process happens in fit and starts, and often can take up to a year just to get to an actual project - or even stall out from lack of focused momentum.

It should be noted that all organizations do not start out or stay equal in their chances of successfully pursuing this path. Management that possess ties to corporate high-tech (either through board representation or just social connections) is more likely to access the necessary technical knowledge. Larger organizations are more likely to be able to assign staff to the internal project development work necessary. Established agencies will also be better able to find funding from their own budgets or have development staff to write capacity building grants. 

Which agencies will struggle disproportionately in this “business as usual” model?

It will be the smaller and more grassroots organizations, often the ones that are closest to - and led by - people of color. The current capacity building model not only rewards the more prosperous agencies, but also reinforces the existing divides. Because the work of capacity building was pursued independently, the benefits of capacity building remain unshared. One organization’s improved donor database capacity benefits no other organization besides itself. The sector as a whole is not strengthened or made more equitable. The already strong get stronger, the already resourced get more resources.

An Illustration of a New Approach

What if there was a faster, more cost efficient, and equitable approach to capacity building?

Suppose instead of “business as usual,” a small group of funders partnered with leading nonprofits to create a “Capacity Collaborative” in San Mateo County. In this Capacity Collaborative, the same four organizations are brought together as part of a cohort of agencies that have identified fundraising as their most pressing need. In diagnostic exercises from the first monthly convening, the same four organizations discover that many of their specific needs are quite similar. The second convening provides further context for group learning, guidance from a consultant on their options, and focused time to develop an actual scope of work. What would have normally dragged on for a year has now been accomplished in two working days only a month apart.

During this process, the organizations learn that the Salesforce nonprofit donor database platform could be customized to meet their individual needs, and is free for nonprofits. In “business as usual,” the key barrier was finding and affording Salesforce consulting services with the nonprofit expertise to implement this customization. The starting price for such a customization done separately could easily reach $15,000 (and usually higher) per organization. What the four organizations discover in the Capacity Collaborative program is that if they form a “purchasing mini-collaborative,” they can conceivably bring that per organization cost down to $10,000.

Moreover, as part of the Capacity Collaborative program, the funder provide each organization $5,000 in capacity building funding. The four organizations decide to pool this funding together, with each organization contributing an additional $5,000 from their own operating funds (so that everyone has some “skin in the game”). By the third monthly convening, implementation on the database work has begun. In this third convening, the four organizations receive further training and practice together on how to manage the implementation of complex technology projects. Compared to “business as usual,” all of this has happened in a fraction of the time and less than 2/3 of the cost.

The organizations continue to discover the benefit of collaborative capacity building. In “business as usual,” the ongoing costs of training and user support must be borne separately by each agency. These ongoing costs often prevent smaller grassroots agencies from using technology effectively. Encouraged by the Capacity Collaborative, these four agencies form their own user community so that staff can easily share questions, ideas, and resources across organizational lines. The Capacity Collaborative also captures the knowledge gained from their project and makes it available online for other agencies in the sector to follow in their footsteps.

Unlocking the Potential of Collaboration

The above hypothetical example is meant to illustrate the potential of collaborative capacity building. The scenario outlined is completely plausible and can be achieved on any number of capacity building needs in fundraising, communications, and data. We are highly confident that this approach will generate substantial savings and accelerate project development. 

To repeat, we as a sector cannot afford to engage in “business as usual.” We need funders and nonprofits with the vision and resources to lead the way with the risk-taking ethos necessary to pursue game-changing ideas. We believe the time is now to transform the region’s approach to nonprofit capacity building.