The COVID-19 pandemic thrust the needs of nonprofits into view, forcing funders and grantees alike to rethink how they work together, both to tackle unexpected challenges and lay the groundwork for future needs. In the United States, amid calls for more-equitable grantmaking and increasing awareness of economic disparities, many funders continue to grapple with the “best” way to be a responsive partner to grantees.

There’s no question that there’s power in philanthropy providing organizations with general operating support and unrestricted funding. Both are important components of trust-based philanthropy, a grantmaking approach that emphasizes humility and collaboration across a range of dimensions. But nonprofits are also turning to funders for support beyond grantmaking dollars—such as networking, coaching, and advisory guidance—to build organizational capacities that can help them achieve long-term success.

In the name of equity, some foundations have taken a “no strings attached” approach to capacity building, believing that nonprofit skill and competency assessments are misinformed or overly informed by funder preferences. Others are going further and asking whether the philanthropic sector should redefine the ways it supports grantees through capacity building or cancel it altogether, citing a lack of funder reciprocity and the reinforcement of harmful power dynamics in practice.

At Overdeck Family Foundation, which aims to improve educational opportunities for children, we firmly reject this binary, and embrace mutual accountability between strategic capacity building and trust-based philanthropy. Instead of canceling capacity building, foundations should play a more strategic and hands-on role; they should engage in transparent conversations and acknowledge that both grantee and funder have important perspectives to share. As Phil Buchanan, president of the Center for Effective Philanthropy, writes, “Thoughtful donors and foundations reject the notion that there need be a dichotomy between strategy, assessment, evidence, and learning on the one hand and trust, listening, and flexible support on the other. … They realize that, while the knowledge and expertise of those closest to issues should be respected, foundation staff and donors do often possess useful knowledge, too.”

Read the full article about capacity building by Anu Malipatil and Lucy Brainard at Stanford Social Innovation Review.