Who Decides Capacity? (Janet's Blog)

(08-24-10) There is a lot of talk these days about “capacity”… capacity building, capacity funding etc. At a meeting of funders in Seattle that included grantmakers from every sector, everyone was talking about building capacity for nonprofit organizations as part of their funding programs from human services to the arts. It certainly is at the core of effective organizational management. Does the organization have the capacity to implement the project? Is capacity strong in human resources, fund development, operating reserves, program management and technical expertise? These are questions asked by all funders.

I recently had an odd experience that raised an ethical question about who determines capacity. I got a call from a potential grantee of a federal education program. Their grant had been ranked amongst the top 50 out of nearly 2,000. They were seeking assistance to raise $750,000. The government program required them to raise this match within 30 days of their notification of being a finalist for the grant. I thought to myself, “this is nuts!” Here we have passionate nonprofit leaders on the brink of receiving huge sums of federal dollars without support, or, it seemed to me, capacity to raise the match. They were reaching out to me, which seemed reasonable enough since we are “Grantmakers for the Arts” and it was an arts program. Unfortunately for the potential grantee and for my ever-constant need to be of assistance, GIA does not make recommendations to its members about funding projects. It is wisely our policy to not get between our members and their grantees.

But, I was angry. Angry that a funder (the USDOE) would dangle this kind of money in front of an organization that they should have known did not have the professional skills, connections or capacity to raise that kind of money in a month. There was some talk of support for grantees from private funders who had indicated “interest” to the feds to match this project. However, these were not hard commitments and possibly weren’t applicable to my caller. The fact that the potential grantee is in a small city in a primarily rural state should have set off some alarms with grant panelists that maybe this group needed some extra help? Their project sounds solid. Their application was obviously highly ranked but this group’s capacity to raise the dollars to match their grant is extremely limited in comparison to a like organization in any of our major metropolitan cities.

Who decides capacity? Should the grantee know better than to apply for a grant they will have problems matching? That’s a bit like telling a child she can have a candy bar  but it will be bad for her. Does she take it anyway? Of course she does. Is it the responsibility of the granter to understand the capacity of the organization being funded? I absolutely think so. In this case where the match was so high, I know there was an attempt to help rural projects find a match. Unfortunately, this small city in a primarily rural state wasn’t rural enough for that program. I wish this group the very best and hope that the feds will help them out or cut them some slack.