June 2, 2024

A guide to capacity-building grants for nonprofits in 2024

Written by Rita Auritt

For most nonprofits, grant-seeking is a significant area of work. And it’s no wonder. Mission-driven boards are charged with finding ways to meet or enhance annual budgets, and the billions of dollars allocated by the government and foundations provide promising possibilities.

We’ve written about t echnology grants, but these types of resource-limited grants by definition don’t meet every need. Another type, the capacity-building grant, offers an alternative that meets other high-priority needs your organization faces.

We’ll explain capacity-building grants, highlight some of the top examples and resources in various geographical areas and look at how technology can support your grant-pursuing process.

What is a capacity-building grant?

A capacity-building grant is often used with phrases such as organizational development or institution building. Simply put, a capacity-building grant is a sum of money that a foundation offers to a nonprofit to work on new strategies, develop competencies and improve processes and systems around efficiency. With this type of support, nonprofits can move into a position where they have a greater capacity to serve others.

The Council of Nonprofits defines capacity-building grants this way, “An investment in the effectiveness and future sustainability of a nonprofit.”

“Capacity building is fundamentally about improving effectiveness, often at the organizational level.” – GrantCraft

GrantCraft notes that “capacity building is fundamentally about improving effectiveness, often at the organizational level.”

Nonprofits often use capacity-building grants to hire consultants to assist them in improving programs or improving efficiency overall. For example, nonprofits might use funds to acquire tools or expertise to build a new program that their clients badly need, such as mental health services, health services, housing or food.

In the interest of efficiency, nonprofits might use grants to invest in technology to reduce the time required for administrative tasks. A reduction of administrative tasks might also increase the capacity of the number of individuals a nonprofit could serve.

How to apply for a capacity-building grant

Anyone on your board or in your organization can spearhead the application for a capacity-building grant. Nonprofits commonly hire grant writers to apply for grants as grant writers have the necessary expertise to complete applications and increase the chances of an award. In the case of grant seeking, the more the better; every application increases the chance of an award.

Perhaps one of the biggest mistakes nonprofits make in seeking grants for capacity building is making a plea for funds from the perspective of needing to be rescued and survive depending on it. Foundations are more likely to respond positively to nonprofits that view their organizations through a capacity lens.

Four key steps for applying for capacity-building grants

The following four steps will take you through how to apply for a capacity-building grant..

1. Review your short and long-term goals and target areas of need. Determine where a capacity-building grant would be most impactful. The following areas will give you some good places to start:

Governance
Communication
Strategic planning
Financial management
Technology
System innovations
Human resources

Do you see gaps or significant areas in these categories where you could make vast improvements if you only have the funds?

2. Outline a plan of action, and explain how you will measure the outcome. It can be challenging to define how funding for operations will translate into helping more people, and a plan of action will help get the point across. Just as you would use SMART goals in your strategic planning, SMART goals are just as effective when applying for a capacity-building grant. Foundations want the details. They also want to connect the need with the final results. By including your process for measuring your goals, you are telling foundations you have accountability.

3. Link your ask to the foundation’s mission and vision statement. Foundations are nonprofits, just like your organization. As such, each foundation has its own mission and vision. When you can tie your need for funds to their purpose, they will be more greatly invested in your goals and nonprofit. Research the grant maker’s mission and vision statements and refer to how your organization’s mission aligns with theirs to create synergy.

4. Communicate your plan for sustainability. Foundations are more interested in funding programs and projects that will stand the test of time. They’re usually looking to fund programs that will sustain themselves at some point. They’re also interested in nonprofits that will be around for a long time. It may be that improving programs and starting new projects are the very things that help your nonprofit to be sustainable.

It may help your board to preview a sample capacity-building grant proposal form as you prepare to apply for grants. Another idea is to ask for assistance in grant writing from other area nonprofits that have successfully gotten grants.

Nonprofit capacity-building grants by geography

Here is a list of location-specific grants and resources for certain geographical areas.

Capacity-building grants: Los Angeles

Capacity-building grants: California

Northern California Grantmakers
California Grant Watch (a listing of nonprofit grants in California)
CSUN (a directory for nonprofit capacity-building in Los Angeles County)

Capacity-building grants: Oregon

Capacity-building grants: Chicago

Capacity-building grants: Washington State

This is just a tiny sampling of the capacity-building grants and resources currently available at time of writing. With foundations loosening up their criteria for how nonprofits can spend grant funds, there was never a better time to seek nonrestrictive grants.

Using your board management solution for the grant process

One of the most important factors in the grant process is attention to detail. The grant process requires planning, documentation, clear writing, follow-through — all effort that can trip up boards and staff who are focused on the mission work.

Your board management solution can help.

Automated workflows that allow multiple team members to contribute to grant application documents and collect approvals
Secure workrooms for teams to discuss grant-seeking or particular grant applications
A searchable document library that can be used to collect and store materials for the grant — both applications, award requirements and supporting

Grant-seeking is a critical and rewarding aspect of modern nonprofit board work, and BoardEffect can be a valuable tool in planning for and organizing grant-related work. At Diligent, we understand that every dollar counts to mission-driven organizations, and we offer BoardEffect as a tool to efficiently serve all aspects of nonprofit work.

Rita Auritt

Rita Auritt is Manager and Governance Advisor at BoardEffect which is a division of Diligent Corporation. In her role, Rita works with a diverse range of organizations with a focus on healthcare and higher education. Having been a board member in many nonprofits and an executive director, Rita understands how BoardEffect’s governance platform can be used to achieve an organization’s mission. Rita worked for many years in financial services and institutional money management.