Who’s Assessing Whom & Why?

I’ve been reflecting on the growing popularity of organizational capacity assessment tools, used for a variety of purposes by nonprofit leaders, consultants and funders. I did some research and discovered there are literally dozens of tools available for free or low cost online. A thoughtful 2017 guide includes a database of 91 tools and describes the ways the most common ones are employed.

Supported by the William and Flora Hewlett Foundation, consultants from Berkeley-based Informing Change interviewed 27 consultants and leaders from foundations and nonprofits to learn more about the tools and how they are used. Their short guide includes a set of best practices, an Excel file listing the 91 tools and several cautions and caveats about the tools’ risks and limitations.

Among the consultants’ key findings:

  • Capacity assessment tools offer a framework that facilitates individual reflections about an organization’s trajectory and helps stakeholders identify shared concerns and priority actions;
  • The tools provide common language to discuss difficult organizational issues and focus the conversation on the questions within a tool rather than opinions of specific individuals;
  • The process in which a tool is used is more important than the tool itself;
  • Tools work best in a process facilitated by a skilled consultant;
  • Funders do not frequently use organizational assessment tools to make grant decisions nor to assess grantee progress over time;
  • When used in a nonprofit learning community, a tool can be helpful in monitoring progress toward capacity benchmarks; and
  • Tools that use rubrics (statements describing low, medium and higher levels of capacity) help users understand what doing better could look like.

Most funders interviewed for the guide cited successful uses of these tools as a means to “confirm hunches about issues they think a grantee is facing, clarify what a nonprofit described in a grant application and help nonprofits identify their [capacity building] priorities”. Interviewees told the Hewlett consultants they do not use an assessment tool for pre-grant due diligence, noting that it is unrealistic to expect unbiased data from prospective grantees when the assessment is perceived as a condition of a grant. They added that it can be burdensome to a nonprofit—particularly a small one–to undergo a detailed capacity assessment as part of a grant application process. The nonprofit leaders interviewed said that when they were asked to do a self-assessment before receiving a grant, they weighed the cost of participation against the odds that they would receive a grant sizeable enough to recoup that cost.

An important caveat for funders considering asking grantees or prospective grantees to undergo an assessment process: the majority of funders interviewed agreed it is best to encourage self-assessment and ask a nonprofit to share a summary of its organizational assessment findings–rather than the actual results from the tool—and to let the nonprofit know this in advance.

Reading this guide prompted me to reach out to a foundation colleague and a nonprofit leader I had worked with and to reflect on the lessons I learned as a consultant using one of the popular capacity assessment tools. Below I share the comments of my two colleagues, along with my own thoughts.

Mary Gregory, who, until her recent retirement, led a number of foundations in her role as an executive at Pacific Foundation Services (PFS) in San Francisco. We talked about foundation-sponsored capacity building, off-the-shelf capacity assessment tools, as well as foundation due diligence. She said that, as far as she knew, none of the PFS staff used capacity assessment tools for grantmaking due diligence, nor for making decisions about capacity investments.

She said PFS used a relationship-based approach to understand the organizational challenges of grantees: “We developed trust with them so they knew they could come to us with a challenge, talk with us and request financial support.” She recalled that when one PFS foundation she led launched a theory of change (TOC) capacity-building initiative several years ago, the approach honored the grantees’ own judgment of their readiness to participate.

Gregory recalls, “We invited them to a training and to take advantage of assistance from a foundation-sponsored consultant. But we did not push any of them into it, nor did we imply their regular grants were dependent on participating. We let the groups decide if they were ready and able to undertake a TOC process.”

Full disclosure: I was the foundation-sponsored theory of change consultant who led the day-long training and facilitated TOC planning with five motivated and ready grantees. Leaders of each nonprofit grantee chose whether, when and how to participate in the offered technical assistance; they hired me directly with support from small foundation grants. An internal champion at each of the groups actually drove the process. It is noteworthy that of the grantees invited to participate, only a fifth did.

Circling around to the topic of the efficacy of capacity assessment tools, Gregory said, “I think tools can be part of what needs to happen to make positive change through capacity grants. But they’re not the whole of what needs to happen. There must be organizational buy-in and trust, which comes from  a funder who is framing an assessment process as a mutual learning opportunity. The discussions and the planning that come afterwards can be very important to the funder–as well as to the organization. But the funder will only be included in them if the organization trusts the funder.”

I also wanted the perspective of a long-time nonprofit leader on foundation-sponsored capacity assessments. I reached out to a former client who served for ten years as executive director of a Bay Area social services agency. She could not recall a funder asking the agency–as part of grant due diligence–to undergo a capacity assessment using any of the popular tools. She said, “If a funder uses an assessment tool to decide whether to give a grant, I think that’s too much to ask.” She noted that such a tool, if used appropriately, could spur shared learning between a nonprofit and its existing funding partner. But to use it to make grant decisions would “be like weaponizing self-assessment—they’d both be doing it for the wrong reasons,” she remarked.

Some years back, I was on a consulting team leading strategic planning for a 12-year-old nonprofit on the cusp of big organizational change. Our team learned the power–and limitations—of one of the popular, off-the-shelf capacity assessment tools. In the project’s first phase, we reviewed the nonprofit’s financial, program and other documents, conducted interviews with internal and external stakeholders, facilitated stakeholder focus groups and guided a self-administered capacity assessment survey of staff and board.

When it came time for the group’s leaders to make strategic decisions about their future, we pointed out that the survey findings had found numerous organizational capacity issues and suggested that the group take a slower than hoped for approach to growth. Our recommendations included ways to shore up organizational infrastructure to address the survey findings of serious technology constraints throughout the organization, a lack of development capacity and a feeling among both program and administrative staff of not being adequately supported by management.

While most of the group’s leaders took these recommendations to heart, a couple board members found it hard to accept that this “canned” assessment could come up with findings truly relevant to their organization. We were able to persuade the skeptics because, alongside their self-administered capacity assessment, we had conducted interviews with staff and board that both fleshed out and validated most of the survey’s conclusions. The organization’s leaders did heed our recommendations to go slow and focus, in year one of the new plan, on stabilizing and strengthening their core infrastructure. This experience speaks to the Hewlett guide’s finding that these kinds of tools are best used in a consultant-facilitated process with a nonprofit leaders who are self-motivated to reflect on their group’s strengths and growing edges and then take steps to address their most important challenges.

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