Too often, a nonprofit organization’s funds are diverted straight into mission-driven initiatives and programs, leaving little to no allowance for internal improvements like staff training and system upgrades that keep everything running smoothly. Without the funding to invest in these areas, nonprofits — often juggling tight finances — can unintentionally run into problems. No matter how significant their work is, nonprofits are unable to improve their programs and provide services to more people.
Due to these challenges, many organizations seek capacity-building grants to help improve their operations. These grants provide them with extra capital to strengthen their internal operations without straining their existing resources. In turn, they can invest in essential tools and talents that will allow them to take on more work and ultimately make a bigger impact.
By the end of this article, you will learn what nonprofit capacity-building grants are, find some examples, and get some tips when applying for one.
What is a Capacity-Building Grant?
A capacity-building grant is financial aid given to nonprofit organizations with the goal of, as the name suggests, building an organization’s capacity to serve more people. It is usually distributed by government agencies (at different levels), corporations, or foundations to eligible organizations upon meeting specific criteria. Unlike most grants where the money is allocated towards specific projects or causes, a capacity-building grant is designed to primarily cover an organization’s general operating expenses, including:
- Leadership Development: Typically involves enhancing the staff and board members’ leadership skills and decision-making ability through training and certifications.
- Staff Services Betterment: Includes establishing wellness initiatives like mental health support programs or housing staff members.
- Human Resources Expansion: This area focuses on hiring additional team members or consultants to fill resource gaps.
- Technology and Infrastructure Optimization: Assessing current systems and tools to identify what works (keep or upgrade) and what doesn’t (retire). For instance, if the current project management system is no longer serving the organization, then it’s time to replace it with a new one.
So, why are capacity-building grants important?
A conducive workplace with skilled staff and up-to-date tools and systems creates an efficient working environment. For a nonprofit organization, these elements boost their operational capacity to fulfill their mission on top of everything else. A 2023 report by a family foundation found that most capacity-building grantees reported it greatly benefited their organization by improving delivery channels and programmatic design, ultimately increasing their reach. Securing capacity-building grants for nonprofits, then, is crucial to ensuring they have all the necessary resources to continue delivering high-quality services to the community.
Restricted vs. Unrestricted Capacity-Building Grants
While grants are freely given by the funders, meaning nonprofits have no obligation to repay them, there are often conditions attached. Funders may stipulate guidelines for how they want the money to be used, known as a restricted grant. On the other hand, unrestricted funds offer nonprofits freedom to use the financial support however they may deem beneficial for the organization.
When do nonprofits need capacity-building grants?
Most nonprofits fail to recognize the need for capacity-building support until it negatively impacts the quality of their services. By then, it may be too late to reverse the damage and restore the trust of donors and stakeholders. Fortunately, this scenario can be avoided by identifying the telltale signs early on.
To determine if a nonprofit needs a capacity-building grant, it’s vital to assess the organization’s strengths and weaknesses. Here are key signs to watch out for:
Struggling to scale operations
If your nonprofit has hit a roadblock after a run of successful programs, suddenly struggling to meet the increasing demand for services, you might want to start looking into capacity-building grants. Securing one can help fund team expansion and system upgrades to accommodate growth.
Limited staff skills
An organization needs an anchor leader to provide direction and stability. Suppose your current board does not possess the skills required to manage and guide the team. In that case, your nonprofit may need capacity-building grants to facilitate leadership training and team-building. Moreover, you may use the grant to hire more people or consultants to bridge resource gaps.
Outdated tech infrastructure
Legacy systems lack speed, accuracy, and automation. If an organization continues to rely on old systems, it may cause slower processes, compatibility issues with newer tools, and may even expose the nonprofit to security vulnerabilities. To improve efficiency and guarantee that your data remains safe, a capacity-building grant may be a good solution.
Difficulty in measuring impact
Do you find it hard to collect, manage, and analyze data to measure program outcomes for your reports? If so, a capacity-building grant for nonprofits can provide the necessary funding to invest in modern data management solutions, like board portals, that can streamline the data workflow process from collection to evaluation.
Capacity-Building Grant Examples for U.S. Nonprofits
Nearly 30% of nonprofit organizations in the U.S. have filed an IRS Form 990 report indicating they have received government grant funding, with the majority awarded for periods of up to two years. This represents over 100,000 nonprofits receiving over $300 billion in funds annually. While these numbers suggest a vast pool of competition, they also highlight the abundance of funding opportunities available to nonprofits. Here are five capacity-building grant examples:
1. Webber Family Foundation
The Webber Family Foundation supports Texas-based nonprofits (specifically academic-focused organizations) in improving their systems and operations to work better and more efficiently. Currently, they offer two kinds of grants: capacity-building and partnerships — the latter is available by invitation only. The former is a one-year grant worth up to $25,000, open to nonprofits in Texas that wish to open new doors to help low-income youth excel academically.
How to apply: Send the completed forms and attachments via email. While there is no set deadline for submissions, the foundation encourages applicants to message them or conduct a site visit prior to application to understand their qualifications better. Visit this page to learn more.
2. The Winston-Salem Foundation
The Winston-Salem Foundation is dedicated to funding nonprofits focused on four key areas: enhancing board and staff capacity, conducting organizational assessments to identify key areas for growth, developing specific leadership and operational skills, and prioritizing and incorporating the voices and perspectives of those directly impacted by their work, with a strong emphasis on diversity, equity, and inclusion (DEI). Grants offered range from one to three-year periods, with an initial maximum amount of $25,000 in the first year.
How to apply: Nonprofits serving Forsyth County in any of the four aforementioned capacity-building areas are eligible to apply. New applicants must create and log in to their accounts to proceed.
3. Louder Than Words Grant Program
Supporting the underserved members of the community, the Finish Line Foundation’s Louder Than Words Grant Program focuses on programs that target personal development, education, and community safety. This grant is open nationwide to nonprofits with a ‘demonstrated commitment and capacity to deliver culturally competent services.’ Organizations can request up to $10,000 to fund their initiatives.
How to apply: Applicants must pass the Grant Eligibility Quiz before proceeding to the online application. Check this page to learn about other qualifications and submission deadlines.
4. AARP Community Challenge Grant
The AARP Community Challenge Grant 2025 houses several grant opportunities, including Flagship Grants, Demonstration Grants, and Capacity-Building Microgrants. The microgrant is open nationwide to fund quick-action projects, especially those benefitting residents aged 50 and older. This includes public space improvement and disaster preparedness training. Eligible nonprofits can receive grants of up to $50,000.
How to apply: All organizations with tax-exempt status, as well as government entities, are welcome to apply. AARP is currently accepting grant applications until March with the promise of completing all projects by the end of the year. For details, click here.
5. Stranahan Foundation
Stranahan Foundation’s grant supports early childhood education, focusing on increasing access to high-quality care for low-income children (birth to age five) and improving the quality of early childhood education. Open to all nonprofits, public schools, and higher education institutions in the US, eligible organizations can request up to $500,000.
How to apply: Applications are closed as of the time of this writing. For inquiries about the next cycle of funding, organizations can send an email to grants@stranahanfoundation.org.
If these five grants aren’t a match, here are some websites that compile available grants in your area:
- Grants.gov
- GrantWatch
- FundsNet
- Foundation Directory (formerly Foundation Center)
- Instrumentl
How to Win a Capacity-Building Grant for Nonprofits: Step-by-Step Guide
No matter how big or small the nonprofit is, every organization benefits from securing a capacity-building grant. Here are five steps to craft a winning grant proposal:
1. Identify your organization’s needs
Knowing your short- and long-term goals helps your nonprofit determine where you need to build capacity. Do you see gaps in governance, communication, strategic planning, financial management, technology, human resources, or system innovations? Does getting additional funding help resolve these issues? Answer these questions as honestly as you can to help identify the aspects of your nonprofit organization that would benefit most from a capacity-building grant and seek funding targeting those areas.
2. Research potential funders
It is important to know that not all foundations and government agencies provide grants for capacity-building. Hence, you should focus on grantors that are willing to assist. Look into local nonprofit associations or do a quick search on GrantWatch or other websites — which you can filter based on your location and interest. When reaching out for funding, be sure to relate your needs to the mission and vision of the foundation to create connections. If you are able to explain how your organizational mission supports theirs, they will be more willing to invest.
3. Prepare your proposal
At this stage, start listing down the gaps you need funding for and how the money will help close them. Elaborate on your specific plan of action regarding how the funds will be used and the timeline for implementation. Do not forget to set SMART (Specific, Measurable, Achievable, Relevant, Time-bound) goals to help outline the expected outcomes and put in place measures to monitor the plan’s success.
One helpful tip to outshine other applicants is to establish credibility. Put out your successful programs (with data to back it up) to prove your track record. This shows commitment and reliability the nonprofit can use the grant appropriately.
4. Communicate sustainability and alignment
Funds received through a grant can drastically improve your organization’s chances of success in the long run. Make sure you detail how the project will carry on after the cycle, ensuring alignment of priorities between the funding entity and your organization’s mission and vision. Perhaps try checking some sample capacity-building grant proposals and reaching out to a few nonprofits that have successfully secured grants for some insight.
5. Submit your application
Ensure you follow the funder’s submission guidelines carefully, including providing all required documents such as financial statements, organizational charts, and letters of support. Anyone can spearhead this entire process, but to improve your chances of success, consider hiring a dedicated grant writer. Consulting an external expert is also advisable to review your application before submission.
Enhance Your Nonprofit’s Capacity with Convene
As you think of new ways to raise funds and maximize the impact of your nonprofit, it’s equally important to equip your leaders with the right tools to optimize those resources. Investing in a platform that helps streamline essential nonprofit activities, from board management to grant proposal writing, all while ensuring security, accessibility, and efficiency, is one way to achieve that.
With Convene, a powerful board management software, nonprofits can:
- Streamline board meetings: Simplify agenda creation, document sharing, and report management with automated tools that ensure virtual and hybrid meetings run smoothly and efficiently. Live video conferencing and online and offline annotation tools are also provided to support collaborative note-taking and feedback.
- Enhance organization and accessibility: Keep all documents in one secure, centralized location. Board members can access materials at their convenience, reducing the need for last-minute meetings and preventing time spent searching for files. They don’t have to worry about intrusions because Convene also supports role-based access control to ensure only members of the board have access to sensitive business information.
- Make informed decisions quickly: By providing decision-makers with ready access to important files like meeting minutes and other key documents, they are able to make well-informed decisions. At the same time, all these decisions are audited with task trackers and e-signatures to ensure accountability among members.
Learn how Convene is making the lives of nonprofits easier. Book a demo with one of our product experts to start your journey.
Jess is a Content Marketing Writer at Convene who commits herself to creating relevant, easy-to-digest, and SEO-friendly content. Before writing articles on governance and board management, she worked as a creative copywriter for a paint company, where she developed a keen eye for detail and a passion for making complex information accessible and enjoyable for readers. In her free time, she’s absorbed in the most random things. Her recent obsession is watching gardening videos for hours and dreaming of someday having her own kitchen garden.
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