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9 minute read
Community nonprofits play a critical role in addressing local needs and driving change. Support for developing and strengthening the vital infrastructure that advances that role can be hard to come by. At Catchafire, we partner with funders to provide capacity building resources to help nonprofits strengthen their operations, expand their programs, and meet timely community needs. This helps them focus on advancing their mission and driving positive outcomes in their communities.
Importance of capacity building for nonprofits
Capacity building is essential for nonprofits aiming to achieve long-term sustainability and impact. By focusing on building capacity, organizations can strengthen their ability to fulfill their missions more effectively and efficiently. Nonprofit capacity building involves enhancing various aspects of an organization, from improving internal systems and processes to developing leadership skills and expanding resource mobilization strategies. For example, organizational capacity building may include training staff, upgrading technology, or improving governance structures, all of which are vital for an organization’s growth and success.
One of the key ways to support this growth is through capacity building grants. These grants are specifically designed to help nonprofit organizations enhance their capabilities, enabling them to better serve their communities. Capacity building grants for nonprofits can be used to fund a wide range of activities, such as strategic planning, professional development, or expanding service delivery. By securing a capacity building grant, a nonprofit can invest in its future, ensuring it has the resources needed to thrive and adapt to changing circumstances. Community capacity building is another critical aspect, as it empowers nonprofits to engage more deeply with the communities they serve, fostering stronger relationships and greater impact.
There are numerous capacity building examples that illustrate the benefits of such initiatives. For instance, a capacity building grant for nonprofit organizations could involve investing in a fundraising training program that enhances the skills of development staff, ultimately leading to increased revenue and sustainability. Whether through organizational capacity building or community capacity building efforts, the focus on strengthening the core functions of a nonprofit is vital for its continued growth and success.
Community capacity building: Magic Cabinet’s approach
We hosted a discussion with Magic Cabinet to discuss how they’re rewriting capacity building to unlock nonprofit potential. Philanthropy has often committed to funding individual programs at a nonprofit versus the actual nonprofit structure. Magic Cabinet has turned that aside, creating a strategic grantmaking program focused on capacity building. During our conversation, Magic Cabinet provided insights on how they are opening unconventional paths for philanthropy to make a difference in communities.
We were joined by:
- Alexis Aviles, Engagement Officer, Bay Area
- Charlotte Basch, Program Officer, Puget Sound
- Zach Grossnickle, Sr. Manager, Brand and Communications
- Joaquin Uy, Engagement Officer, Puget Sound
The conversation was moderated by Guenevere Crum, Catchafire’s Director of Community Engagement. You can watch the full discussion here.
For those not already familiar with Magic Cabinet, walk us through the organizations, the way that you’re structured, and the actions that have been put into place to reflect the foundation’s values and vision. How do you mark success?
Joaquin: We’re a philanthropic organization, but we’re a little bit different from a typical foundation:
- We provide long-term capacity building grants for small but mighty nonprofits that serve communities in the San Francisco and Seattle areas. Some examples of capacity building grants that we’ve launched include investing in a new donor engagement platform, funding sabbaticals for seasoned employees, or even buying new computers to replace old equipment.
- We don’t just give out money for capacity building. We also assist by creating a cohort of nonprofit partners who meet regularly over the course of five years to advise each other, share insights, and vote on capacity building grant proposals. There are three nonprofits to a cohort, and we sponsor Catchafire access for all of our nonprofit partners. This includes organizations in a cohort, and those who were invited to apply, but didn’t make it into a cohort.
- Venture Cabinet organizes other foundations by sharing our evolving model and encouraging funders to adopt similar collaborative trust-based philanthropic practices.
Our engagement and grantmaking processes are supported by our five grantmaking pillars:
- Listen: Engage in dialogue with nonprofit leaders and community members.
- Focus on capacity: An effective nonprofit is more than its programs.
- Long-term grants: A five year cohort grantmaking process. We believe innovation takes time. The three organizations in a cohort divide $500,000 between themselves for the next five years.
- Commit to a community: Our cohort process focuses on one community at a time.
- Collaborative cohorts: Our cohorts aren’t just places for grantmaking, but they’re also magic cabinets where nonprofits share knowledge with each other.
Zach, talk to us about your philanthropic partnership work, and what Magic Cabinet is doing there.
Zach: Our direct grantmaking was the first phase of Magic Cabinet. But there’s only so much that we can do to influence with our direct grantmaking and cohort model. So we’ve had two new emerging arms of work, philanthropic partnerships and advocacy.
We’re developing relationships with other funders to see how we can collaborate and accelerate mutual funds together into new solutions…we’re really excited to try new ideas. The main thing we want to bring into these partnerships is what we’ve learned from our nonprofit partners and cohort model, which is elevating participatory solutions, trust-based models, and leaning on letting the community lead with philanthropy to follow.
From there, we’ve gone into advocacy, and thinking about how we can unlock more dollars for nonprofits using our positional place. There’s two areas we’re starting to see, first more money coming out of donor-advised funds. That’s a space where we can work with other foundations or on a policy level to try to create more incentives to have money go out. Second, wage equity for nonprofits and how we can advocate for government contracts to allow for internal capacity and actually paying for salaries for the nonprofits to do the work that they’re contracted to do.
You have capacity building front and center in a lot of ways. What are some nonprofit examples of unique programs that are important to you as program officers? What’s happening in your community and how does that relate back to Magic Cabinet?
Joaquin: Magic Cabinet is an invite-only foundation. The first step as a community engagement officer is to conduct research and talk to people in the neighborhood to find out more about what’s happening on the ground. Then our team generates a report with a proposal on what communities we plan on investing in through our cohort model. We invite organizations to apply and participate in brief site visits. We convene an advisory committee that consists of community members, who ultimately make the final decision of which nonprofits we place into a cohort.
All organizations invited to an engagement receive a $10,000 unrestricted grant regardless of whether they make it into a cohort. What’s awesome is that each of the three nonprofits in each cohort will have a representative assigned to attend their meetings, with a Magic Cabinet staff member acting as a liaison between the cohort, our organization, and Catchafire. The fifth member of the cohort is someone from the community, a neighborhood leader or activist. They meet quarterly for the next five years, with access to $500,000 each year. That’s a total of $2.5 million for the next five years. Once they’ve decided how to split the money, the next step is to write grants. During each meeting, each nonprofit will have the opportunity to present a grant to fund a specific capacity building project.
This year, we did something a little different–Rather than focus on a neighborhood in the city, we collaborated with RVC (Rooted in Vibrant Communities), a Seattle-based organization. Their goal is to fiscally sponsor many small BIPOC-led nonprofits serving communities in South Seattle and South King County with the intent of building their capacity. There are a lot of shared goals between RVC and Magic Cabinet. So we collaborated to put 9 of their 20 fiscally sponsored organizations into three cohorts.
I am just so amazed by all of the organizations:Alexis: I want to highlight Open Door Legal in the Bayview District in San Francisco. They’re providing universal legal housing, and immigration support as the city has seen rapid change and gentrification. Bayview is historically a Black and immigrant working class neighborhood. As the city continues to change and BIPOC communities need legal support, the organization's goal is to move into more neighborhoods in San Francisco. They’re part of one of our first three cohorts in 2018. They’ve grown rapidly in the last five years, expanding to different neighborhoods and opening their doors to the community. They recently did a study that showed their services in the Bayview reduced homelessness by 50% in that neighborhood. It’s really exciting to see them grow and see how they’ve been able to use the grants through Magic Cabinet to support their internal infrastructure and sustainable growth.
Charlotte: What does an organization being primed and ready for capacity building success look like? One example is Friends of the Children Tacoma; they are a branch of the nationwide organization, which supports the branches for the first five years. After that, each branch is financially independent. They hit that five year mark during their cohort time, so it’s been amazing to see how they’ve leveraged Magic Cabinet grants to prepare for that transition to more financial autonomy, by creating grants or proposing grants to their cohort for fundraising, development, and marketing. They’ve been using our capacity building grants and Catchafire to really wrap their head around what their organization looks like five years and beyond.
How do your grantees not only work with the Magic Cabinet nonprofit capacity building program, but also unlock Catchafire? How do the two systems work together, and what does that growth look like?
Charlotte: Something we’re really thinking about and trying to expand is our support beyond the grant. While grants are an essential piece of our work and supporting nonprofit capacity, we’re really trying to think more expansively.
“What I’ve heard from our nonprofit partners is that Catchafire is not only a good resource for them to actually do the work, but to serve as thought partners about what capacity could look like. It’s really difficult for nonprofits that haven’t had the capacity to think, well, what can this look like for us?”
Charlotte Basch, Program Officer
Puget Sound Magic Cabinet
So partners are utilizing Catchafire to connect with experts even when they’re just scoping out a new capacity building project that they want to propose as a grant to the cohort. Then they’re of course utilizing it once they have the grant approved and they’re diving into the project itself.
For nonprofits who have never had a fundraising event before, many have hopped on the phone with a Catchafire volunteer that is versed in event planning and fundraising, and made a big, intimidating project seem less scary by saying, ‘here are the things you need to make a successful event and engage funders.’
"While we move the grant to support capacity-focused projects, it’s awesome that Catchafire is offering hands-on logistical support to actually make the work happen. As program officers, we can only do so much. So we’re able to move the funds, create the cohort, and turn folks to Catchafire to do a deeper dive on their projects."
Charlotte Basch, Program Officer
Puget Sound Magic Cabinet
What are some of the top needs that you’re seeing that organizations need assistance with?
Across the board, the top trends Magic Cabinet is seeing includes:
- Hiring and staff salaries: Last year, 60% of all 2023 cohort grants were focused on hiring or increasing staff wages.
- Recruitment and retention: Nonprofits are seeking grants to increase sustainability within and support their staff.
- Sabbaticals: Many nonprofit leaders are wearing multiple hats or founded their organization, preventing them from ever taking a break.
“Within my cohort, all my cohort members took sabbaticals and really encouraged it for each other. It’s really exciting that we can provide that support, and acknowledge that sustainability within a nonprofit also means taking care of yourself and your colleagues. That means taking time off and making sure that you have the capacity to do the work that you’re doing and to show up for your community.”
Alexis Aviles, Engagement Officer
Bay Area Magic Cabinet
I know that you’re looking at radical ways of building new pathways and refreshing the Foundation’s approaches to creating grantee partnerships. What are some of the ways you’re leaning in on creating new pathways and opportunities for philanthropy?
Alexis: We’ve been taking a step back to reassess our grantmaking process and how we engage with communities:
- Revamping our engagement process to further community voice into our decision-making processes: As we’ve grown, we have the goal of growing outside of the Bay Area or outside of the Puget Sound, and not being as place-based. What communities have we not reached with our grantmaking and why aren’t we reaching them?
- Community outreach: We started with door knocking, talking to folks, doing our research, and began to create alternative models…There are other funders working with the communities that we’re hoping to work with that are already doing it really well. There’s no need to recreate the wheel, so how can we work with those partners to build those relationships, and continue to move money and support? We began to partner with intermediaries, like RVC, to create a fiscally sponsored cohort.
- Expanding to native communities: We learned that we had not been able to reach native communities in our work, and acknowledge that we weren’t in the space yet to create our own model to fund in native communities. We still had a lot of internal learning to do, so we looked for a native-led intermediary to partner and build relationships with, to start moving money into those communities. There’s been a lot of reassessing and pausing to create more equitable systems.
"We were founded under the idea that more of our problem is with philanthropy, not nonprofits. Our entire feedback loop is actually evaluating how we are showing up with our nonprofits. We don’t ask them about their outcomes or growth metrics–they’re the experts and can evaluate their success on their own. How are we showing up in the space? We use that information to understand how Magic Cabinet can better show up and adapt our model.”
Zach Grossnickle, Sr. Manager, Brand and Communications
Magic Cabinet
