Key Term

What is Capacity Building?

Definition

Capacity building refers to the process of developing and strengthening the skills, abilities, processes, and resources that organizations and communities need to survive, adapt, and thrive in a fast-changing world. In the context of charitable giving, it involves providing nonprofits with the tools, training, and resources they need to improve their effectiveness, efficiency, and sustainability beyond direct program funding.

Significance

Capacity building is crucial in philanthropy because it helps create stronger, more sustainable nonprofit organizations that can better serve their missions over the long term. When donors invest in capacity building, they enable nonprofits to develop better systems, hire and train staff, improve technology, enhance fundraising capabilities, and strengthen leadership - all of which leads to greater social impact. This approach represents a shift from traditional charitable giving that focuses solely on program support, recognizing that nonprofits need robust organizational infrastructure to achieve lasting change in their communities.