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S U S T A I N I N G
N O N P R O F I T
PERFORMANCE
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The Brookings Institution established the Center for Public
Service in 1999 to answer three simple questions: what is the
state of the public service today, how can the public sector
issue a more compelling invitation to serve, and how can the
public sector be a wise steward of the talent it recruits? The
Center for Public Service espouses the simple belief that effec-
tive governance is impossible if public agencies, be they gov-
ernment or nonprofit, cannot compete for their fair share of talent in an
increasingly tight labor market. Interested in more than basic research, the cen-
ter aims to develop and disseminate pragmatic ideas that, if put to the test, will
improve the odds that more talented Americans will enter the public service.
As part of this effort, the Center for Public Service has set forth an aggres-
sive agenda to include a series of publications and reports, conferences, and
other public events in order to encourage young Americans to enter the public
service and to instill in all Americans a greater sense of confidence and integrity
in that service. As with all Brookings publications, the judgments, conclusions,
and recommendations presented in the studies are solely those of the authors and
should not be attributed to the trustees, officers, or other staff members of the
institution.
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S U S TA I N I N G
N O N P R O F I T
PERFORMANCE
The Case for Capacity Building
and the Evidence to Support It
Paul C. Light
brookings institution press
Washington, D.C.
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Copyright © 2004
THE BROOKINGS INSTITUTION
1775 Massachusetts Avenue, N.W., Washington, D.C. 20036
www.brookings.edu
All rights reserved
Library of Congress Cataloging-in-Publication data
Light, Paul Charles.
Sustaining nonprofit performance : the case for capacity building and the
evidence to support it / Paul C. Light.
p. cm.
Includes bibliographical references and index.
ISBN 0-8157-5226-1 (cloth : alk. paper) —
ISBN 0-8157-5225-3 (pbk. : alk. paper)
1. Nonprofit organizations—United States—Management. 2. Organizational
effectiveness. I. Title.
HD62.6.L545 2004
658.4'01—dc22 2004012674
9 8 7 6 5 4 3 2 1
The paper used in this publication meets minimum requirements of the American
National Standard for Information Sciences—Permanence of Paper for
Printed Library Materials: ANSI Z39.48-1992.
Typeset in Sabon with Myriad display
Composition by Cynthia Stock
Silver Spring, Maryland
Printed by R. R. Donnelley
Harrisonburg, Virginia
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Contents
Preface vii
1 The Pressure to Perform 1
2 The Logic of Investment 13
3 The State of Nonprofit Capacity Building 44
4 The Case for Capacity Building 86
5 Improving the Odds of Success 123
6 The Spiral of Sustainable Excellence 136
Appendixes
A The Capacity-Building Survey 177
B Capacity Building in Low-Income-Serving
Children and Family Organizations 191
Notes 197
Index 203
v
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Preface
Sustaining Nonprofit Performance is the third of a series of
volumes published as part of Brookings’s Nonprofit Effec-
tiveness Project, which was launched in 2000 with Making
Nonprofits Work. That work examined the deluge of reform
moving through the nonprofit sector and was followed by
Pathways to Nonprofit Excellence in 2002, which looked at
the characteristics of high-performing nonprofits. The project
has also produced a series of policy briefs and short reports
on public confidence in the nonprofit sector and the state of
the nonprofit work force.
Nonprofits have been buffeted by many of the same ques-
tions about accountability and stewardship that rocked the
private sector over the past three years. Whereas many of
the private business scandals involved little more than greed,
I argue that the nonprofit sector suffers from a different
scandal—persistent underinvestment in its basic organiza-
tional infrastructure. Driven to do more with less, many
nonprofits simply make do with the bare minimum, often
denying their employees the training, technologies, and sup-
port they need to do their jobs.
This book draws primarily on a national survey of how
the nonprofit sector has been responding to the increased
pressure to perform. The case for capacity building is built
vii
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viii P R E FA C E
by testing a series of simple logic chains that link capacity building to
organizational performance and public confidence, and exploring the
links through both careful statistical analysis and case studies of high-
performing nonprofits conducted over the past two years. Although I
argue that nonprofits can improve and sustain high performance through
relatively low-cost, high-yield investments in their organizational infra-
structure, a cautionary tale is offered here regarding how nonprofits can
use their scarce resources wisely. Nonprofits cannot improve by merely
throwing money at the latest management fad. Rather, they must think
carefully about where they need to improve and what they want to
accomplish.
This volume could not have written without the support of the David
and Lucile Packard Foundation, which provided the funding for the
national survey, the Robert Wood Johnson Foundation, which supported
an early report on capacity building strategies, and the Carnegie Corpo-
ration of New York, which supported research toward a preliminary
statement of the case for capacity building.
I am pleased to acknowledge my colleagues at Brookings, New York
University, Princeton Survey Research Associates, and Third Sector New
England, which publishes the Nonprofit Quarterly. In particular, I would
like to acknowledge the help of Elizabeth Hubbard and Lisa Zellmer,
who helped with the site visits to high-performing nonprofits, Ruth
McCambridge and Cynthia Gibson, who helped with the preliminary
statement, Mary McIntosh and her team at Princeton Survey Research
Associates, who conducted the surveys referenced in the book, Ellen
Schall and the rest of the intellectual community at the Robert F. Wagner
School of Public Service at New York University, and Carol Graham,
director of Governance Studies at the Brookings Institution.
Finally, I would like to thank the nonprofit employees and organiza-
tions that participated in the surveys and site visits, without whom this
book could not have been written.
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S U S T A I N I N G
N O N P R O F I T
PERFORMANCE
