Nonprofit Builder: researching the foundations’ perspective

Our goal with the Nonprofit Builder project is to transform the way the nonprofit sector learns, making it more efficient , affordable and collaborative, and we plan to do that by creating useful linkages between three stakeholder groups: nonprofits, nonprofit capacity builders, and donors.

Donors, and foundations in particular, are an important stakeholders as we foresee that they can play a tremendous role:

• Their field-level perspective can provide valuable insight into the nonprofit capacity of particular country and thematic area.
• By inviting their grantees and trusted consultants to join, they can help the expansion of the Nonprofit Builder community.
• By providing funding to their grantees through the Nonprofit Builder’s subsidy system, they can greatly lower the cost of capacity building and encourage nonprofits to invest more and better.

In the preparation of this project, we developed assumptions on how the Nonprofit Builder would provide value to donors, and we are now in the process of testing these assumptions through a series of interviews.

What kind of donors / foundations are most likely to be interested in the NonProfit Builder?

• Donors who fund nonprofits based in regions underserved by nonprofit capacity builders (parts of Global South, Former Soviet Union, etc)
• Donors who want to do more capacity building but do not have in in-house organisational development person to set up a support ecosystem.
• Donors who want to “grow the field”, meaning who want to strengthen the capacity of nonprofit capacity building community or promote nonprofit learning communities.

What are these assumptions of our value to these donors?

• Donors will appreciate the Nonprofit Builder marketplace becauseIt will leverage the power of the community to offer their grantees a stronger, more diverse and better-tested support ecosystem than they could ever hope to assemble on their own.
• The Nonprofit Builder’s subsidy system will help donors by enabling them to provide high-impact capacity building grants to grantees, while avoiding the administrative overhead involved.
• Donors will have access to a lot more data and analysis of how and their grantees are learning, and be able to measure the impact of their investment in capacity building.

We also have assumptions relating to the all-important question: does capacity building really work? These assumptions are:

• Investing in organisational development (consultants, trainings, etc) will lead a nonprofit to much higher levels of impact — it is really worth it.
• It is possible to define a simple and scalable methodology to determine the impact and ROI of organisational development activities.

We think that our research into these last two assumptions will be important for:

• Foundations who already provide capacity building support are usually convinced of its value, but their evaluations may still be anecdotal rather then systematic. Evaluating ROI is elusive.
• Foundations wishing to get started with capacity building, and who will need solid argumentations, about impact and possibility to measure impact, in orde to convince trustees to invest.