nonprofits constantly talk to their funders about the costs of running their programs – project staff, travel, workshops etc. – but most forget about capacity-building.

capacity building is the gift of time, energy and resources needed to lay the foundations for social and environmental change. those foundations include a clear strategy, a financing plan, a case-for-support to funders, talented people and robust systems etc.

how can you design programs without a clear strategy? how do you sustainably resource programs without a financing plan (which includes fundraising)? how do you engage donors without a case for support, good fundraisers and a donor database?

every financing plan should include a budget for both everyday operations and capacity-building.

it is a simple proposition: you need to invest more time, energy and resources into capacity building to scale social change.

the Pay What It Takes campaign is raising awareness among funders that charity overheads need to cover the real cost of running a nonprofit: strategic planning, robust systems, professional development, fundraising, good governance, impact evaluation etc.

the destructive “do more for less” culture includes government grants which cap administrative costs at 10% and myopic trusts and foundations who refuse to fund any overheads! i know one charity leader who would white ant a “competitor” charity for disclosing their real cost of fundraising, while blatantly lying to donors about their own “cooked” numbers.

funders and boards need to have a realistic understanding of how much it costs to run a nonprofit and find ways to fund capacity. it is difficult for leaders to ask the hand that feeds them for “more money to do more”. but those conversations are absolutely critical.

the starting point is a clear strategy and financing plan. go to your funder and say, “i value our relationship but I don’t want to come cap-in-hand to you forever. please help us put our nonprofit organisation on a more sustainable footing so we can increase our impact.”

a “one page” strategic plan is adequate for smaller charities. a financing plan articulates the resources needed to deliver the strategy, including both operating and capacity building costs over the life of the plan. this becomes part of the “need” expressed in your case for support, alongside program funding.

a financing plan is a roadmap for nonprofit success. it doesn’t cost much and it will help transform your organisation.

from there, get your board engaged in fundraising to deliver the financing plan, including the capacity your nonprofit needs to scale its impact. (frankly, if the board doesn’t get that then your first priority is a board evaluation and transition plan). you may find funders are much more receptive to organisation-building conversations than you think.

i will finish with an inspiring example. Future Generation Global (FGG) provides multi-year, untied funding to 14 charities, coupled with additional capacity building support, which is allocated according to their own needs and priorities. so more of this please!

ask me more about how I can help you build capacity and unleash your nonprofit’s potential. please contact paul via email, or book online via Calendly here.