What is “Capacity Building?”

If you’ve been working in or with nonprofit organizations lately, chances are good you’ve heard the buzz word “capacity building”… chances are also good that you are wondering what does this mean for the charitable causes I support?

Nonprofit organizations run on donations, from generous individuals, but also from foundations, corporations, and government agencies. Most donors like to know that their money is going directly to the “front lines”—that is, directly to the costs of serving people in need.

At Ventures, about 80% of our funding goes to these “direct” costs such as workbooks for low-income entrepreneurs to use in training courses, or gasoline to run the food truck on which they sell their products. But there are other costs, often referred to as “overhead” expenses that are essential to ensuring we are able to continue to provide services for the community. These include things like the cost of rent for our offices, or the cost of employing accounting staff to pay our bills.

Funds that go towards “capacity building” help nonprofits like Ventures increase their ability to leverage overhead costs to increase the effectiveness of their services. In other words, capacity building funds pay for indirect expenses that have a big impact on nonprofits’ operating efficiency and long-term sustainability.

We are so pleased to share that Ventures was recently awarded a $117,000 capacity building grant from the M.J. Murdock Charitable Trust to increase our the size of our fundraising team. This contribution will make it possible for Ventures to invest in a key behind-the-scenes function, increasing the effectiveness of our fundraising efforts. As a result of this investment, Ventures will be able to raise more money to provide more services for low-income entrepreneurs in the Puget Sound region.

Funders like Murdock Trust know that strategic investments in overhead expenses are important because they allow organizations like Ventures to grow and increase their impact. We are so thankful for this generous gift and this three-year partnership with Murdock Trust!

If you’d like to learn more about our partnership with Murdock trust, Ventures’ fundraising efforts, capacity building, or our strategies for long-term growth, please contact Brittany Kirk at bkirk@venturesnonprofit.org.

To read more about nonprofits’ efforts to encourage more donors to support “overhead,” check out this post by Nonprofits with Balls.