Want Impact? Strengthen Organizations

This post originally appeared on India Development Review.

It is the fundamentals of an organization — arguably more so than great program design or execution — that are key to delivering high impact. This insight drove a recent decision by Children’s Investment Fund Foundation (CIFF), where we work, to set up an Organisational Development (OD) team to support our nonprofit partners with their capacity-building needs. This new direction represents an important shift away from focusing predominantly on programmatic funding.

It took us a long time to realize that individual program funding could be myopic; that such funding could put a strain on the program itself, because the rest of the organization would often be unable to keep pace, adapt, and deliver to what the program was trying to achieve.

Today, we realize that at times our partners may not have the time, capacity, or funding to develop strategies, build internal systems, cultivate good governance, and foster leadership — all of which are critical to creating impact on ground. Restrictive funding practices that limit non-programmatic or core support also contribute to this problem.

Moreover, oftentimes funder and partner conversations on capacity building do not happen, or when they do, they do not connect the dots between capacity building and impact, or arrive at common priorities and measures of success. This could happen due to the lack of an organization-building mindset and/or due to the difficulty of measuring the impact of an OD grant.

This situation limits the effectiveness of partners themselves but also sometimes diminishes the potential of programs.

The need for organizational development

At CIFF, we do a grantee survey every few years. From it, two things emerged: first, we realized that there were common capability gaps across a number of nonprofit partners, and they were probably not going to fill them on their own. Second, our grantees encouraged us to think about what value CIFF was adding beyond funding programs, because as donors we had historically focused on programmatic funding.

It was only when we started looking at our strongest relationships that we realized that when we had invested time and effort in areas beyond the program, we were able to build trust and credibility in the eyes of our partner. For instance, sitting through a program review is obviously useful, but not the same as helping your nonprofit partner by sitting through an interview panel to hire for a non-program position. Lastly, our grantee partners requested our support with building their own capacity.

In October 2018, CIFF decided to set aside funding — one percent of our multiyear value (MYV) — to strengthen the institutions with whom we partner. OD is still a very young function at CIFF, and we are constantly learning from our experience. Here are some of our early lessons.

First, a ‘one size fits all’ approach to capacity building will not work.

It is important to work closely with partners to identify areas they would find most useful to achieve their current and long-term goals. These could include:

• Governance and leadership
• Strategic clarity and planning
• Monitoring and evaluation, strategic communication, and digital strategy
• Risk management and fundraising
• Human resources, financial management, and technology

In our case, sometimes our program team identifies a potential capacity-building need of a partner, and reaches out. Other times our partners take the initiative to request support. Regardless of who initiates the request, partners must finally determine what type of OD support they require. This is important because different OD support is needed at different growth stages of an organization, and as donors we need to be cognizant of that.

For instance, at CIFF, we often incubate new organizations, which provides us an opportunity to innovate and push beyond the constraints of an existing ecosystem. Our OD work helps in both setting up these new partners and in building their capacity. Operational support is critical at this stage for an effective start, for autonomy, and long-term stability. And this support would look very different if the partner we were working with was more mature and further down the growth phase.

Partners’ readiness at the board and leadership level is essential

For any OD intervention to be successful, it needs to come from the top. Readiness also refers to factors such as partners’ recognition and desire to make changes, and the staff’s capacity to manage and participate in the project. Additionally, there needs to be significant involvement from the donor’s program team — the people who understand the partner and their needs intimately.