Supporting Grantee Capacity: Data Trends

“It blows my mind that capacity building is relatively inexpensive and can create tremendous impact, yet we don’t invest in it more as a field.”

–Doug Bauer, Executive Director of the Clark Foundation

This quote in the latest GrantCraft guide Supporting Grantee Capacity: Strengthening Effectiveness Together led the research team at Foundation Center to wonder:

How much do U.S. foundations invest in capacity building?

Source: Foundation Center, 2015. Based on the FC 1000 dataset, which includes all grants of $10,000 or more awarded by 1,000 the largest U.S. foundations by total giving. Capacity building includes support for income development, management development/capacity building, faculty/staff development, and technical assistance.

Funding for capacity building as a share of all grantmaking by the nation’s largest foundations has decreased. In 2002, 6.6 percent of grant dollars was designated for capacity-building purposes; by 2012, that share was 4.4 percent. In fact, since 2007, less than 5 percent of foundation funding has gone toward grantee capacity building.

Source: Foundation Center, 2015. Based on the FC 1000 dataset, which includes all grants of $10,000 or more awarded by 1,000 of the largest U.S. foundations. Capacity building includes support for income development, management development/capacity building, faculty/staff development, and technical assistance.

In actual dollars, grants for capacity building have fluctuated. In 2002, more than $1 billion dollars was dedicated to capacity building; 10 years later, that figure was slightly lower at $985.8 million. However, after taking inflation into account, support for capacity building declined 24 percent during this period. Moreover, from 2004 to 2007, when support for capacity building was increasing, its share of all grantmaking was still trending downward. Growth in support for capacity building simply wasn’t keeping pace with increases in overall funding.

Some funders may view general operating support as a form of capacity building.  General support grants averaged $3.5 billion per year, increasing from $2.7 billion in 2002 to $4.6 billion by 2012. Including these grants in the analysis boosted the dollar amounts—and proportion of overall funding—significantly. In 2012, funding for capacity building and operating support together reflected 25 percent of all grant dollars.

These data cannot tell us why some foundations choose to engage in funding capacity building while others have not identified this as a priority. But for those foundations that may be considering providing support for capacity building, GrantCraft, a service of Foundation Center, has developed a free guide to help funders think about how best to approach their funding in this area.

Using examples from foundations ranging in size, mission, and geography, Supporting Grantee Capacity: Strengthening Effectiveness Together explores various strategies that funders use in building capacity with grantees. The guide is supplemented by more than 30 new GrantCraft resources and a special collection of case studies, white papers, and evaluations published by practitioners and experts in the field, which can be accessed at fundingcapacity.issuelab.org.

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