Strengthening Nonprofits in the Time of COVID-19: Part One

At this unprecedented moment in our history—as an intractable global pandemic conspires with a public health crisis of systemic racism that is destabilizing our nonprofit sector—we have no choice but to ambitiously confront this two-headed challenge head on.

This three-part series will explore the need to urgently examine the ways funders have traditionally provided their grantees with financial support to become “halfway-healthy.” Nonprofits are on the front-lines of our current societal transformation, yet both funders and grantees must build adaptive muscle. This introductory piece focuses on ways grantees must prioritize strength-building to remain resilient and sustainable; subsequent installments will address the myth that scenario planning alone is the answer to nonprofits’ and funders’ current uncertainty, and the need for funders to envision themselves as part of the adaptive equation.

Part One: Why Capacity Building is the Critical Complement to Nonprofit Adaptive Transformation

The health of our nonprofit sector is one of the many pressing issues crying out for attention at this time. Funders who previously limited their grantmaking exclusively to supporting discrete programs, projects, or services have inadvertently contributed to the scarcity economy nonprofits endure. Many of these organizations have closed their doors, while others are anxiously preparing to re-emerge onto continuously changing terrain. We must also wrestle with the glaring inequities faced by nonprofits founded and led by Black, Indigenous, and People of Color. It’s not only that they’ve received less money—but blatant inconsistencies exist between these grantees and their White-led counterparts when it comes to receiving the supplementary support necessary to ensure ongoing organizational success and sustainability.

Funders providing COVID-19 emergency grants are strategizing on how they can allocate rapid distributions of cash to make the most difference, e.g. self-identified external support, mental health services for those on the front-lines running organizations, volunteer recruitment investments, etc. Some are smartly providing much-needed general operating support so the lights can stay on and the doors open; others are doubling down on increased funding for programs to address the huge spike in need for nonprofit services. These are, however, only two of the three types of support grantees desperately need if they are to survive the added stress resulting from our current uncertainty.

While direct program grants are the lifeblood of community-serving organizations and a cornerstone of funder practice, funders also need to offer critical capacity building support by helping grantees strengthen organizational leadership and governance, fortify infrastructure, foster strategic collaborations with peers, network with new allies, and expand field knowledge, among other things.

Surveys by groups like the Center for Effective Philanthropy and others—along with research reports from Citibank and Synergos—have uncovered an urgency to invest in strengthening grantees organizationally—not simply to raise additional funds and hire more staff, but to become adaptive, imaginative, more honest and resilient. If nonprofits are to become more sustainable—surviving the current crises and others to come—they must get stronger to be able to meet the increased demand for their services. This means building their organizational capacity to be ready for whatever follows and working more effectively—working smarter. It must also include the capacity to identify and determine ways nonprofits can articulate and communicate organizational values that contribute to the dismantling of systemic injustice. Grantees must be able to marshal the tools, skills, and resources required to assemble new systems and structures to sustain and reinforce equitable social sector practices to reshape our future.

With scant time and money, nonprofits need to identify and address those areas that will make the most difference. It’s critical they prioritize what to work on NOW…What’s the lever that will make the most difference at this time? How can each nonprofit get stronger faster?

Individual vs. Collective Capacity Building

Many funders, like the St. Louis-based Deaconess Foundation, realize it takes more than building individual nonprofit capacity to solve complex social problems. They are investing in the construction of “community capacity”—the eradication of gaps in civic infrastructure and power that inhibit a community’s well-being. Community capacity is built only when the “allocation of power and distribution of resources, benefits, opportunities and burdens are not predictable by, nor predicated on race” and when a community can leverage the interaction of available human, organizational, and social capital.

Capacity Building investments are the critical complement that will make the difference of if and how nonprofits survive the “next normal,” and play an essential role in transforming the structural and systemic barriers impeding the just communities we seek. Funders committed to contributing to social change at any level must begin layering organizational support onto their programmatic giving and general operating support investments, reinforcing and strengthening their grantees’ ability to progress into the future.  If our communities are to regain equilibrium, funders must invest in strengthening their grantees’ organizational capacity—not only to survive this crisis, but to acquire the resilience and stability needed to withstand the next unpredictable wave.