Most third sector organisations lack capacity in some respect. The same is true of most businesses. Effective organisations know how to supplement their resources when they need to do something for which they lack capacity.
However small community and voluntary organisations can struggle with lack of capacity. I’m going to review capacity in four dimensions, two in this post. Of course, increased capacity in one dimension is unlikely to make an organisation viable. So, the reason why many organisations fail when their grant money runs out is because they have not built capacity.
Competence
An organisation can fail to build capacity because it lacks competence and that can be good news. Maybe they can do something about it. One problem many organisations encounter is their culture blocks their growth in capacity. For example, insisting decisions must go through Trustees who meet once every three months is easy to diagnose and fantastically difficult to change.
Market
Lack of capacity might also be in their market. Their clients have real needs and no capacity to meet them from their own resources. An organisation that aims to help these groups is dependent on external sources of income and so will be slow to build capacity. Indeed many groups know they will never build financial capacity, eg work with older people is unlikely to result in a viable organisation through trade in the local economy.
However, an effective organisation whilst unable to build financial capacity locally may be able to build other dimensions of capacity. And this may help them build financial capacity externally.
The point is many groups are unaware they struggle with capacity. They may find they have some early success but don’t use it as an opportunity to build capacity and so collapse when their money runs out.
Next Wednesday I’ll look at capacity building in finance, personnel, time and knowledge and understanding.
