Social Edge - The Nonprofit Capacity Conundrum

Social Edge - The Nonprofit Capacity Conundrum: "The Nonprofit Capacity Conundrum
There is a distinct difference in the way capacity is supported in the non-profit versus other sectors. Nonprofit capacity support is often dictated by external funder objectives and not internal organizational need. Capacity support is viewed by donors as a necessary evil or overhead expense to be minimized.

From the funder's perspective this is logical. Funders have their own capacity needs to support, and in all practicality, use numerous NGO's for short periods (1-3 years) as operational intermediaries to meet their mission-oriented funding objectives. It is often more 'cost effective' to assume a portion of the grant will be wasted in inefficiencies, than to invest significantly over many years in building the capacity of NGO's the funder works with only intermittently.

Appreciating that efficiency and effectiveness are two different animals, an NGO can be effective, (thus attracting donor mission support) but still inefficient. "