Fundraising capacity is one of the most valuable investments a funder can make. An organisation that can raise its own funds is less dependent on any single funder, more financially resilient, and better able to invest in long-term programmes. Yet fundraising capacity grants remain one of the most underinvested areas in philanthropy — partly because funders find it counterintuitive to fund activities that help organisations become less dependent on them.
This guide makes the case for fundraising capacity investment and explains how funders can do it effectively.
Many nonprofits are chronically grant-dependent — relying on a small number of funders for most of their income. This creates significant organisational risk:
The alternative — a diversified income base including individual giving, corporate partnerships, trading income, and earned revenue alongside grants — creates resilience and sustainability. But building this takes investment in fundraising capability that most organisations don't have.
Fundraising strategy development
Many organisations operate without a clear fundraising strategy — they react to opportunities rather than proactively building income streams. Grants supporting fundraising strategy development — with professional advisors or through structured learning programmes — help organisations identify their best income opportunities and build towards them.
CRM and database systems
Effective individual giving programmes require good donor management systems (CRMs). Many nonprofits lack these, relying on spreadsheets and email. Grants for system implementation — both the technology cost and the implementation support — enable organisations to build the infrastructure for scalable fundraising.
Fundraising staff
Hiring a dedicated fundraiser is the most direct investment in fundraising capacity. Some funders offer "first salary" grants — covering the cost of a fundraising role for 1-2 years while the organisation builds income to sustain the role permanently. The business case: a well-executed fundraising hire typically generates significant multiples of their salary in new income.
Major donor programmes
Building relationships with major donors takes time and skill. Grants supporting major donor programme development — including donor research, relationship management training, and events — help organisations access this high-value income source.
Community fundraising capability
Charity runs, crowdfunding campaigns, community events — these create community engagement alongside income. Training in community fundraising technique and platforms enables organisations to execute these well.
Bequest and planned giving
Bequests are transformative for many nonprofits but require long-term relationship investment. Grants supporting bequest programme development help organisations build this income stream.
Digital fundraising
Online giving, social media fundraising, and digital donor acquisition have become essential. Grants supporting digital fundraising capability — website optimisation, email marketing, online payment systems — help organisations access these channels.
Direct grants to organisations
The simplest model: funders provide grants directly to organisations for specific capacity-building activities (staff, systems, training). Simple to administer but may not address the learning and peer support that make capacity building more effective.
Cohort programmes
Multiple organisations participate in a structured capacity-building programme together. They receive peer support, shared learning, and often expert facilitation alongside individual grant support. Cohort programmes produce stronger outcomes because they build peer networks and create accountability.
Fundraising coaches or advisors
Funders contract fundraising coaches or advisors who work with multiple grantee organisations over an extended period. This provides high-quality support without requiring each organisation to hire their own expert.
Matched fundraising support
Some funders match funds raised by grantees during a defined period, creating an incentive for organisations to invest in fundraising and a direct reward for doing it well. This is effective for building individual donor bases.
"We don't want to fund fundraising — we want to fund programmes."
Organisational sustainability enables programme delivery. An organisation that goes into financial crisis because a single funder withdraws cannot deliver its programmes. Investing in fundraising capacity is investing in programme sustainability.
"We don't want to fund organisations so they can become less dependent on us."
This is the right outcome. Funders who genuinely care about community impact should want the organisations they fund to be financially robust — not reliant on any single funder. Funder dependency is a risk, not a feature.
"Fundraising capacity is an operational cost."
The distinction between "operational" and "programme" costs is often false. Fundraising that generates long-term income is an investment with a significant return — often 5-10x the cost in generated income.
When evaluating requests for fundraising capacity grants:
The right metrics for fundraising capacity investment:
Success takes time — build in realistic timeframes (2-5 years) before expecting significant income diversification.
Tahua's grants management platform supports funders managing capacity-building grant portfolios — with the reporting, milestone tracking, and outcome measurement tools that help funders assess whether their investment in nonprofit fundraising capability is producing lasting change.