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Do what you do. Better.

What government can learn about capacity building from the nonprofit sector: An interview with the Pierce Family Foundation

Photo credit: Raquel Venado

Grantees of the Chicago Fund for Safe and Peaceful Communities are able to build capacity and become more effective. As we work with local governments, MPC is learning from efforts like this.

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When it comes to Illinois’ local governments, this is a critical moment for intervention. Research from MPC and the Chicago Metropolitan Agency for Planning (CMAP) shows that the recent recession, coupled with state and federal budget cuts, has hit suburban governments hard. MPC research also shows that the number of low-income, majority people of color suburbs are increasing and that these communities are disproportionately burdened with disinvestment and, subsequently, a diminished tax-base. For MPC and our partners, seeing these local governments strain to provide services that benefit residents demands action.

Heather D. Parish is the Program Director at the Pierce Family Foundation.

That’s why MPC, along with CMAP and the Metropolitan Mayor’s Caucus, is partnering with local governments in order to improve their efficacy—the ability to deliver quality services regardless of their location in our region.

As we structure our emergent approach to support these communities, we are learning from the nonprofit sector where, in the last twenty years, considerable attention to capacity building has yielded impressive results.

Expert in capacity building is Heather Parish, Program Director at the Pierce Family Foundation and a member of MPC’s Sensible Growth Committee. Ms. Parish has been instrumental in guiding MPC and our partners as we develop this new approach to increasing government effectiveness. The following is an excerpt from our conversation with her.

1. Why is it important to build nonprofits’ capacity?

I have a good analogy for this—it is like making a meal. Everybody has to eat, but we want to eat quality meals. That means you have to purchase the right ingredients, you probably have to pay more for the ingredients that taste good and are nutritious. If you use cheap ingredients, you can make a meal, you can sate your hunger, but it is not a good everyday approach. Long term, this will lead to poor health.

"We have to have the correct ingredientspeople, infrastructure, and systems—for the nonprofit to function well over the long term. When you don’t make the investments in these ingredients, you get inferior results."

It is similar in nonprofits. We have to have the correct ingredientspeople, infrastructure, and systems—for the nonprofit to function well over the long term. When you don’t make the investments in these ingredients, you get inferior results.

2. What does it look like when a nonprofit lacks capacity? What kind of work doesn’t get done?

First off, any work that is getting done is not getting done well. You cannot provide good programs or services without investing in all the back office capacity.

One of the clearest signs of this disinvestment is a lot of staff turnover. This is most often the result of inadequate pay and insufficient staff development. Too often as people rise into leadership in nonprofits, they receive almost no training in how to be an effective supervisor. This takes a toll both on the person managing and on those being managed. Also you see people at all levels that are not trained for their jobs. This all is a common source of burnout. Investing in developing staff is critical. Addressing inadequate pay is more challenging.

Focusing on a nurturing and pleasing office environment can be helpful. But the nonprofits that truly lack capacity usually have offices that are dingy, unpleasant places to work—broken down technology, outdated software, damaged furniture, and even dirty carpet and walls.

In nonprofits that lack capacity, there also tends to be little focus on strategic planning and evaluation, which obviously negatively impacts the quality of services. Without systems to track data and analyze outcomes, without understanding efficacy—and you need prepared and consistent staff, good technology, and good processes to do that—nonprofits can’t even do well on the basics.

3. What lessons does capacity building in the nonprofit sector offer to governmental capacity building?

There has started to be a shift in the nonprofit sector, an acknowledgment that we must invest in building capacity. This must also happen in the governmental sector. The perception that tax dollars are constantly misspent is a problem. There is a culture of not valuing the services government provides. Compounding this is the way structural economic forces have led to the erosion of the tax base in many suburban communities. In this atmosphere government has not been able to invest in staff, back office systems and technology—so like the low capacity nonprofit, many governments are so stripped down that they are not providing quality services.

The clearest way to overcome this perception problem is to draw in more residents, to have participatory processes where people can be part of the decision making and start to see differently the value of their government. If residents are involved in planning and budgeting decisions, they become more educated about how their government supports them—and the services and infrastructure become better aligned with what communities need.

"The perception that tax dollars are constantly misspent is a problem. There is a culture of not valuing the services government provides."

This requires leadership that is open to change, that is open to participation, and that sees its role as serving the public. They have to take the risk of having these more engaged processes and they have to be willing to meaningfully incorporate what residents articulate through these processes.

So that shift can happen at the level of local governments, but that mindset shift about government has to happen elsewhere too. Funding is a big problem. Federal and state dollars are not going to these suburbs and many have a diminished tax base and cannot generate their own revenue.

We have sharp lines about sectors, but maybe that will not work right now. For low-income suburbs, we need to develop a different approach. The philanthropic sector needs to find intermediaries that can invest in local governments to shore them up, have them become catalysts for their communities. Maybe this looks something like the LISC Chicago New Communities Program—a long-term initiative, begun in 2003, to support comprehensive community development in 16 Chicago neighborhoods.

Business has to be at the table too, investing and supporting. We need to be more collaborative across sectors. These are necessary actions to improve the quality of life in these suburban communities, and communities across the state.

4. Twenty years ago, it was unusual for foundations to fund capacity building. Now this is much more common. Why the shift?

There is more data, more ability to see the difference between nonprofits that have strong capacity versus those that don’t. There is more understanding of how much goes in to a well—functioning nonprofit.

Also, seasoned nonprofit staff are now program officers at foundations. This makes a real difference in getting rid of the myth that you can deliver good programs without investing in all aspects of a nonprofit organization. This change in who is at the foundations has led to more honesty and transparency in the relationship between nonprofits and foundations.

The whole sector has become more honest and reflective about what it takes to deliver excellent programs. This has allowed for a shift in looking at desired outcomes first and then asking how much it will cost to get there rather than starting with cost and defining the rest from that.

"The whole sector has become more honest and reflective about what it takes to deliver excellent programs. This has allowed for a shift in looking at desired outcomes first and then asking how much it will cost to get there rather than starting with cost and defining the rest from that."

5. Thinking about some of the suburban communities in our region that have concentrated poverty, many of which are majority people of color, are there nonprofits in all of these communities? Are there organized community groups? In the existing landscape, how do you intervene?

While there may not be large, well known, and formally established nonprofits, there are, of course, organized community groups. The work that is being done through the Chicago Fund for Safe and Peaceful Communities—a coalition of more than 30 Chicago funders and foundations committed to reduce violence—has illustrated this well. There are many grassroots groups that may not be formally incorporated with a 501c3, but they are out there doing on the ground work, curbing violence, addressing issues in their communities, and helping engage people. These groups generally are starting from a shoestring budget, and may not be as visible because they are operating out of someone’s house or car, but they are doing important work. So the Chicago Fund for Safe and Peaceful Communities was intentional in learning about these kinds of groups and gave them small grants through a fiscal agent.

So this question about how you intervene is important. Again, I think of the LISC Chicago New Communities Program. They identified a lead agency in a community and then partnered with them to galvanize everyone else—including smaller groups that are often the unsung heroes—in an inclusive process to plan together for quality of life and to build up existing capacity to achieve these plans.

It is about identifying and galvanizing existing assets and power within the community. If government is organizing and leading this, then a focus can be on engaging people to help government do its work more effectively. This can start with decision making, but as capacity builds, it could be in taking actions to improve quality of life.

6. What criteria do you use when selecting to support capacity building efforts? What strengths must organizations have?

Hopefully there is leadership in place that wants assistance, that is willing to think outside the box, and can be entrepreneurial. Often the leaders with the best potential will have ideas about what steps they need to take to build capacity. These ideas might need refinement, but even the ability to start to articulate ways to move forward is crucial.

They also need to recognize that capacity building needs to go beyond fundraising. They need to have a holistic understanding of improvement. A lot of times the default is to try to get more money in, but effective capacity building involves everything else too. It is important to work with leaders that know they have to develop their people—both their staff and people within the communities they serve. The best leaders also know they need to improve their systems, they need to look clearly at the data and processes, analyze them, and make changes.

"It is important to work with leaders that know they have to develop their people—both their staff and people within the communities they serve."

Reputation, accomplishments, and access to the population we want to impact matters too. Sometimes we work with organizations that may be the only ones working in a community, or with a population within a community. They may be struggling in many ways, but they have the developed relationships, the connections. So in those cases, we will provide more intensive supports. This may take a long time. Our capacity building in these instances would be really intensive and would be a minimum of five years, but it can take longer.     

7. So what are important strategies for working with a truly struggling organization? How do you build a trusting and frank relationship?

First, you articulate that this is going to be a long-term effort that is going to be phased—that you are going to start with small steps and build up. You also reassure them that you are going to be with them through this long process.

You emphasize that they are the expert. You ask them to identify where they want to build capacity, and then you go through assessments with them and involve them in identifying one or two actions. These are steps that shore them up, so it is practical in that sense, but it also helps build their sense of confidence in you as a technical assistance provider, which in turn opens the door to a more trusting relationship.

Once you have built trust, then you work together to develop a work plan that will cover capacity building for the next three to five years. This might require some deeper assessments and involve setting some long term goals. Again, all of this is phased where they continue to develop in their own expertise, as well as their trust in you.

Through all of this it is imperative that you are flexible. Your intervention must be responsive. It may be necessary to slow down or to pivot. If you do not go in with this mindset of flexibility and long-term commitment, then your efforts will not work, they may actually be harmful.

Heather D. Parish is the Program Director at the Pierce Family Foundation. She came to the Foundation in 2013 with over 17 years of experience as an independent consultant to nonprofits and foundations engaged in housing, community development and capacity building initiatives.  Prior to starting her consulting practice, Heather worked as a Public Finance Associate with Prudential Securities Incorporated, as a Senior Consultant with KPMG Peat Marwick’s Government Services Practice, and as a Fiscal and Policy Analyst for the California Legislative Analyst’s Office. Heather holds a Bachelor of Arts degree in Applied Mathematics from the University of California at Berkeley, and a Master of Public Policy degree from Harvard University’s John F. Kennedy School of Government, where she specialized in Housing, Community Development and Urban Economic Development.

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