Capacity building, also referred to as capacity development, is a process that is used by both businesses and nonprofits to help grow the companies and their employee’s bandwidth.

There is a lot of work, planning, and training that goes into this strategic way of increasing skills in a business or community. A successful strategy in capacity building will allow both corporation and nonprofits to make a more significant local impact, increase their sustainability, and when the strategy has proved to be successful, help with internal growth as well.

Getting a Better Understanding of Capacity Building

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Capacity building is not only a way to effectively grow your business now, but it's an investment that you should make in the future of your business – whether you run a corporation or a nonprofit. In fact, building up capacity has been effectively used in many nonprofits to help with sustainability and to increase their effectiveness in a community.

In all businesses, this technique can be used in many different vectors. It is beneficial in identifying communications strategies, in building leaders, in updating technology, and more. In nonprofits, especially, capacity building assists in recruiting volunteers and increasing charitable missions.

Here is a small breakdown of some of the things that capacity development can assist with, in both organizations and for individuals:

  • Improve skills
  • Obtain knowledge
  • Develop social and behavioral change
  • Increase the usage of tools and equipment

All of these improvements and increases assist in helping your business reach a larger audience and make a greater impact on communities. It is because of this community aspect that capacity building was originally termed, “community capacity building.”

The Avenues of Community Capacity Building

When talking about capacity building in the sense of community, it's all about increasing the abilities of the people locally to achieve their goals, especially in regard to small businesses and grassroots movements.

These are the people that make positive changes on a local level and build stronger communities – which means that increasing their skills and helping them overcome pitfalls is good for the community as a whole.

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How to Use Capacity Building in Your Business or Community

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Capacity Building is about growing and developing a business, a team, or an individual. It's not just about training them. This development can happen on many levels, each of them helping your business or community grow into something strong and more sustainable, with lasting power because of the people that are part of the project.

Below are some helpful tips to build capacity – no matter what your business or nonprofit:

1. Developing Human Resources Skills

Developing Human Resources Skills

Even if you don't work in human resources, the skills in this line of work are essential for all sorts of business roles. Managerial positions require human resource skills, as does running your own business.

Of the many skills needed to get a job in human resources, some of the ones that will help with capacity building include conflict management, communication, decision making, keeping things organized, and ethics.

As you can see, human resource skills are essentials in business – for without communication skills, proper conflict management, and the ability to make decisions, no business can succeed.

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2. Developing a Legal Framework

Developing a Legal Framework

The legalities of business are especially important in the case of nonprofit ventures, as there are rules for where you can get money, what agencies you can use, and more. You want to understand regulations and money – working in nonprofits, where your money comes from is an important part of how your business will succeed and do what it is meant to in your community.

The legal framework of your business also determines the laws and governing practices of your company. You may learn decision making when broadening your human resource skills, but this is where your aptitude in decision making will come in most handy.

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3. Organizational Development

Organizational Development

In order to properly manage a business or nonprofit you need to increase the organizational development in your organization. This type of development works to expand the effectiveness of your team (whether they're employees or volunteers) by giving them the knowledge they need in order to perform to their best ability.

Organizational development is an important part of the human resources strategy. Business structure keeps small businesses, corporations, and nonprofits in line for a change and ensures performance is at its peak.

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Why Do You Need Capacity Building?

Your business, especially in the case of nonprofits, need to build itself up with a sustainable infrastructure that supports the business and its cause. Capacity building is often overlooked in businesses, and employees are simply trained – but the benefits of implementing this type of skill development in your business will be obvious as it begins to help your business build and grow.

Not only does capacity training help build a more effective team, but it can also increase profits (which is especially important for nonprofits). When your business is doing something to enrich the lives of a community and solve issues, your business is succeeding and creating a sustainable future.

All businesses, of all kinds, need capacity building in order to grow. However, there are some specific business issues that can be altered with the implementing of capacity development. Here are some of them – if these fit you, your team, or your business, start working on building a firmer structure now.

Meeting Supply and Need

Increasing Funding

Training is Inefficient

Change is Needed

Increase Communications

Not Sure How to Get Started with Capacity Building?

If you are ready to integrate capacity building into your company, you can find many sources to help you get started. There are many online sources that will guide you through the steps. Your business may want to consider hiring a consultant in the field, especially if you don't feel like you have the time to do it all on your own.

Talk to other businesses (it's likely you know some other CEOs and nonprofit presidents) about what they did to build capacity in their company. You may find out that there are some local workshops that will help you learn more about this fundamental strategy that can make a huge difference both behind the scenes and in the public sector.

Final Thoughts on Capacity Building

If you're not sure if your nonprofit or for-profit business is in need of capacity building, you can do some assessments to determine your needs. Look especially at the areas that capacity building will expand – like communications, volunteerism, and profits.

Use what you learn from peers to come up with the best strategy for your business, and you will find growth.