Capacity Building Grants Can Stimulate Financial Growth

Organizations that received any capacity grant are growing by around 10 percent in the three years following the grant. Grants that specifically targeted financial capacity development did not lead to greater long-term financial outcomes than grants that focused on other management or governance issues.

It is thought that one benefit of these grants may stem from receiving the explicit imprimatur of a foundation. In lay terms, receiving a capacity grant from the foundation may work as a seal of approval that makes the nonprofit organization more enticing to other foundations and donors. Evaluating if targeted capacity building improves nonprofit financial growth, was published in the journal Nonprofit Management and Leadership. The paper was co-authored by Lewis Faulk of American University.
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