Capacity building models – What are they and what works best? (Só disponível em inglês)

Joana Cruz Ferreira

Organisational capacity is a range of interrelated components that give an organisation the ability to perform effectively – to do the right things in the best way to achieve their mission – and capacity building is activities and/or actions put in place to support and strengthen core capacities within an organisation to improve its performance and impact.

As social finance markets have developed globally, capacity building for impact readiness has been somewhat overlooked. However, there have been a number of initiatives focused on building the demand side of the market, which alongside providing social finance have typically incorporated capacity building elements. In my analysis of these programmes, three models have emerged:

1) Accelerator Model: UnLtd UK, created in 2001, best exemplifies this model but it can also be seen in the work of the MaRS centre in Canada. As social organisations develop, they move from one accelerator programme to the next, each focused on providing capacity building support relevant to the social organisation’s particular stage in the development cycle. As the social organisation progresses sequentially from start-up through to growth/scale-up the support intensity and funding type changes to match the organisations’ needs.

2) Demand Centred Model: In these programmes, the social organisation is given control of selecting an intermediary, included on a pre-approved support provider list, to work with in a capacity building programme paid for by third-party funding. The UK’s Investment and Contract Readiness Fund, the Big Potential Fund and the Impact Readiness Fund are good examples of this model.

3) Third Party Model: Funding is provided to intermediaries (e.g. impact investment funds, venture philanthropists, foundations) who are then responsible for selecting and providing capacity building support to social organisations. This model, therefore, leverages off the existing expertise or helps build skills and knowledge of intermediaries already in the market. The Social Innovation Fund in the US and the Social Enterprise Development and Investment Funds in Australia are structured in this way. The Growth Fund, from the recently created Access Foundation in the UK, will also use this model.

Each model has its advantages and disadvantages and which works best depends on where, when and for what it is being used.

So when it comes to designing a framework for capacity building for impact readiness in Portugal (or elsewhere), a building block approach is recommended. This means each model is chosen and tailored to the needs of the social organisations and the capacity of the support providers in the market at the time of its delivery. As has been seen in the UK, the sequence of delivery of programmes using the different models can then gradually evolve through learnings and be adapted to reflect the growing experience or gaps in capacity of market participants over time.

Fiona is working on a masters’ thesis with the Lab on capacity-building to improve the impact readiness of social sector organisations in Portugal.

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