What We're Thinking

Assessing Nonprofit Capacity: Tools That Can Help

One of the Packard Foundation’s longtime funder collaborators is The William and Flora Hewlett Foundation (Hewlett). Hewlett’s Effective Philanthropy Group seeks to strengthen the capacity of the foundation’s staff, its grantees, and philanthropy in general to achieve their goals and benefit the common good.

It recently released an analysis of various tools used for assessing nonprofit capacity. Jean K. Ries, Packard Foundation Organizational Effectiveness Program Officer, sat down with Jennifer Wei, Hewlett Organizational Effectiveness Officer, and Prithi Trivedi, Hewlett Program Fellow, to learn more about the study and the learnings gleaned from research and analysis. Below are the notes from this conversation.

Why were you interested in learning more about organizational assessment tools? What were you hoping to get out of this project?

Organizational assessment tools can be used to gauge an organization’s strategic focus, leadership, governance, human resource capacity, financial and fundraising structure, and learning and evaluation ability. The Hewlett Foundation commissioned this scan as we were curious to discover which tools are available, and how these tools can be most effectively used. We knew that there were a variety of organizational assessment tools in existence, but wanted a clearer picture of the broad array of available tools and what others’ experiences with the tools can teach us in how best to use them.

What were the top things you learned from the project?

We worked with Informing Change, a consulting firm in Berkeley, California, who produced a database of 91 comprehensive organizational assessment tools, checklists, and guides, as well as an accompanying memo. There were many rich findings from the scan, but a few stood out to us:
• Organizational assessment tools can help an organization identify shared concerns, facilitate reflection, and provide a common language for dialogue and decision-making.
• There are many different organizational assessment tools. The most highly-regarded tools are typically customized or adapted to a specific organization’s context.
• The process in which a tool is used is critical—and can be even more important than the tool itself.

We found that tools help prompt nonprofits to consider areas for improvement they may not have thought of before, as well as facilitate important conversations among leadership, board, and staff to help shape resulting priorities.

Did anything surprise you? Why?

Two things jumped out at us. First, customization and adaptation of tools is widely prevalent. In many ways, this makes sense since organizations want to choose a tool and adapt the language to fit their own unique cultures. But a high degree of customization, by definition, limits the ability of organizations to develop comparable benchmarks. That organizations often find this tradeoff worthwhile was a surprise.

Second, we were really surprised by the inconsistent and often limited consideration in these tools of two topics important in the sector: diversity, equity and inclusion, and beneficiary voice. Given the current energy in the philanthropic sector around these issues, this strikes us as areas for growth which should be considered for both creators and users of tools and assessments.

What are the implications of the findings for funders? Nonprofits and grantees?

We believe that it is critical for funders to provide support to help strengthen grantee organizations. And yet, sometimes it is not easy to know where to start. We hope that other funders are able to use these findings to better assess and support grantee organizational needs. That said, our findings indicate that it is better to have nonprofits conduct assessments on their own and not have funders be involved; this enables nonprofits to have thoughtful, candid and unbiased discussions and reflections of their organizations’ needs.

For nonprofits and grantees, it is important to be prepared for an organizational assessment by making the time and mind space available to reflect, discuss, learn, adapt, and make changes. The findings show that to make the most use out of a tool, it is critical to make sure to have the right people participate in the process, pick a tool that uses relevant language, and choose a tool that aligns in terms of organizational budget and staff size. Nonprofits in the study also agree that it is best for someone to lead and facilitate the process, especially if there are differing opinions across leadership and alignment is needed to make decisions and move forward.

What are you taking back to your own work at the Hewlett Foundation?

Like the Packard Foundation, the Hewlett Foundation has long provided organizational effectiveness grants to strengthen nonprofit capacity and foster high-performing organizations that can successfully achieve their missions. In our Organizational Effectiveness program, we are exploring how to use these tools to best support our grantees—to help them assess capacity and prioritize areas for growth. We have also shared the findings with program officers across the foundation, both to use with their grantees and for their own use. We plan to provide more training and resources to program officers to better equip them in understanding how to use these tools to support their grantees.

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