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Building capacity

The importance of increasing skills and confidence
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As a funder we have supported capacity building work through a number of investments and with research. We’ve noted it can be helpful to break the generic concept of ‘capacity building’ down into capacity and capability, to offer clearer insight to discussion about ‘what works’.

  • We know that voluntary and community sector groups need the right skills, knowledge and experience – or capabilities - to carry out projects successfully and to develop and run their organisations more effectively.
  • At the same time, to achieve their mission – or even to develop capabilities to do so – individual organisations need capacity to think and act.
  • The collective capacity and capabilities of the sector can also be enhanced with measures to bring new money into the sector, create new organisations or to develop new strengths in the way it organises itself and collaborates with others.

Put simply, ‘capacity’ describes how much you can do and ‘capability’ is how well you can do it. This distinction helps us to see important interdependencies between the two; For example, to concentrate on developing capabilities you need to have the available time (capacity) to plan, organise and reflect on developing new skills.

At Big Lottery Fund, we support both capability building and capacity building in a number of ways, as part of our work to support a stronger sector. And we draw on research to help inform our approach.

Here are some of the key learning points from our research and evaluations, and some of the things we do, or are planning to do, in response:

Factors for success

Our research has identified capacity and capability building functions and ingredients that can help organisations to be successful, including:


  • appropriate skills among staff and volunteers at all levels, for project work and for organisational management
  • adequate governance with appropriate policies, processes and procedures
  • tailored development support via a clear diagnostic process that enables change to take root in the organisation.


  • links to organisations working with similar aims and beneficiaries (especially for communities of interest) as it enables effective engagement and consultation (-networking is the most widely used aspect of capacity building)
  • adequate premises and equipment
  • appropriate marketing, and links with wider stakeholder organisations
  • adequate funding and planning for all of the above.

Things we’ve found to be important in building capabilities include:

  • A diagnostic process (or organisational strength review) to:
  • establish which strengths/ weakness/ opportunities to focus on given the organisation’s context, purpose and stage of development
  • identify what kind of pack of support will best deliver and embed new capabilities in the organisation given its particular structure
  • Sufficient ‘readiness’ to make use of development help, including capacity to make staff available to participate and, the leadership to make sure that new skills are sustainably embedded into the organisation’s practice
  • Choosing suppliers with the relevant expertise or flexibility
  • Keeping suppliers of diagnostic support and development separate – to avoid conflict of interest
  • Keeping our decisions about funding development support separate from our decisions about funding projects – to help groups feel relaxed about taking up the offer and free to think about their whole organisation’s development.


The benefits of organisational development can be widely felt. We’ve seen that it can lead to:

  • improvements in organisational and service management with a greater ability to forward plan and achieve sustainability
  • opportunities to work more effectively or in new ways
  • increased understanding of the importance of measuring impact and ability to report on outcomes
  • ability to attract more funding.

Challenges and solutions

Like many things of value, building these strengths isn’t always easy. We’ve seen that particular challenges for organisations include:

  • insufficient resources and time
  • lack of recognition that organisational development is relevant
  • difficulty accessing technical support like advice on employment
  • difficulties with a focus on weaknesses
  • finding funding for support.

These challenges can be particularly acute for micro and smaller organisations including those that are at early stages, contemplating employing staff or working with the most excluded or isolated communities.

We can help organisations overcome these challenges (and improve our support offer) by using test and learn initiatives that:

Make additional capability building funding available for grant holders

Support groups to develop by building on their strengths and making ‘readiness’ part of the initial development review process

Enable groups to use a proportion of development funding to free up staff with the time to take part in development

Use accessible outreach mechanisms and everyday language to engage small groups – including those who may not even think of themselves as organisations or part of a sector that can access support

Make the market of providers and diagnosers of support more visible and help groups find quality suppliers of external expertise

Stimulate groups’ appetite for development and encourage them to use full cost recovery to help fund their future capability building.

As we do this we will be working to:

  • Improve our knowledge of ‘what works’ in building groups’ capabilities
  • Explore the relationships between diagnosers, users and suppliers of support, to understand how these affect its impact
  • Look where possible for indicators of the knock-on benefits experienced by projects' beneficiaries.

More about the research

Below is a summary of studies we have commissioned. You can download these studies using the links at the end of this page.

Better by Design: a design-led approach to sustainability

The Better by Design programme ran over two years in Scotland and was an innovative, experimental approach to supporting the third sector to embrace change and become more sustainable. Rather than offering traditional funding the programme instead offered a package of free, intensive, expert and bespoke support to 15 organisations who developed a range of design tools, techniques and mindsets. Drawing on an asset-based approach, Better by Design supported participants to challenge habitual ways of thinking and doing, utilise existing capabilities and become more resilient.

Building Capabilities

The Third Sector Research Centre carried out a scoping study for us to review all the evidence available about capacity and capability building. This has helped us identify the steps needed to deliver an effective tailored support approach – including the importance of a diagnostic process.

Capacity-building and small organisations

We commissioned IVAR to help us think about how we can best support small groups to improve their skills and confidence. The study identified some of complexities of capacity-building.

Developing Communities Scotland

Developing Communities Scotland didn’t specify capacity building as a programme objective but did allow organisations scope for that if it was a priority for them. We commissioned Reid-Howie Associates to find out whether the funding did in fact improve organisations’ overall capacity.

Support and development for grant holders

We commissioned CLES to evaluate our contracts to organisations that can support applicants and grant holders. We wanted to find out how useful these contracts are and whether they provided value for money.

Supporting Change and Impact

Supporting Change and Impact was a two-pronged investment launched in 2011. It helped grant-holders to better plan and sustain the benefits of their projects. It also enabled grant holders to buy development support from specialist providers of their choosing. We commissioned Rocket Science to evaluate the programme.


Better by Design: a design-led approach to sustainability

Better By Design: Summary report
Getting Better by Design: Evaluation of a programme to support the voluntary sector in Scotland
Better by design: A users guide
This 'users guide' to the tools and methods used is also available in hard copy on request from enquiries.scotland@biglotteryfund.org.uk

Capability building

Building Capabilities in the Voluntary Sector: A summary of what the evidence tells us (Summary Report)
Building Capabilities in the Voluntary Sector: What the evidence tells us (Full Report)
Building Capabilities in the Voluntary Sector: What the evidence tells us (Market review - Ancillary Report)
Building Capabilities in the Voluntary Sector: A summary of what the evidence tells us (Partnerships - Ancillary Report)

Capacity-building and small organisations

BIG and Small: Capacity building, small organisations and the Big Lottery Fund report
BIG and Small: Capacity building, small organisations and the Big Lottery Fund report summary

Developing Communities Scotland

Capacity building through the Developing Communities Scotland Fund report
Capacity building through the Developing Communities Scotland Fund report summary

Support and development for grant holders

Research into support and development activity provided to voluntary and community sector grant holders

Supporting Change and Impact

Supporting Change and Impact evaluation