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A Nonprofit Capacity Self-Assessment Workbook For Rural Community-Based Housing Organizations

© Housing Assistance Council, 2000

Permission is granted ONLY to nonprofit community-based organizations to reproduce and/or adapt this document, and only for their own use.

INTRODUCTION

In the past decade, foundations and other funders have been increasingly required by their boards to not only "do good works," but to "do good work well."1 Consequently, nonprofits have also been required to include assessments of their organizational capacity as a part of their grant applications.

Organizational assessment, however, is often an activity that grassroots groups do not have the time or resources to do. The difficulties of assessing capacity and performance are compounded for rural low-income housing development groups that are often struggling with the daily demands of their work in an environment with little informational resources or organizational support. With this in mind, HAC has developed a workbook for assessing the housing development capacity and "track record" of rural nonprofit organizations. The workbook provides organizations with simple definitions of capacity in different contexts, and includes both quantitative and qualitative ways of measuring capacity.

In order to arrive at a workbook format that would be both comprehensive and useful, HAC staff conducted a literature review of existing nonprofit capacity assessment tools and abstracted the elements that are most applicable to rural nonprofit housing developers. A preliminary assessment workbook was then designed and piloted with six rural community housing development organizations (CHDOs) as a part of a capacity training session in Richmond, Virginia from April 18 to 20, 2000. After the training, the CHDOs filled out a questionnaire regarding the workbook design (see Appendix A), after which HAC staff concluded that the workbook was most effective when administered in a workshop setting. HAC plans to design a Powerpoint workshop slide show to enable technical assistance (TA) providers to administer such a workshop.

The workbook is intended for use by nonprofit staff and board members to assess their own capacity, set goals for improving their capacity, and to repeat the process on an annual basis. The workbook may also be useful for funders and nonprofit intermediaries that need a tool to assess the capacity-building needs of the nonprofits that they are funding.

What follows is a workbook designed to lead rural nonprofit housing organizations through the process of capacity assessment. The workbook includes questions that elicit organization-specific information about strategic planning capacity, management capacity, financial capacity, and information technology (I.T.) capacity.

Before beginning the self-assessment workbook, there are a few steps that your organization should take:

  1. Meet with your core staff and board of directors to decide who will direct the process that your organization wants to use to go through the workbook. These are some of the questions you may want to consider.

    • Do you want to fill the workbook out individually and then meet as a group to compare responses after each phase?
    • Do you want to appoint a small task force to do the workbook and then communicate the results to your board of directors and staff?
    • Do you want to enlist the aid of a technical assistance provider as you go through the workbook? (See Appendix B for a list.)

    The most important thing to remember is that, no matter what process you use, your entire organization needs to have a stake in the assessment in order for you to effectively implement its findings and improve your group's capacity.

  2. Photocopy blank copies of the workbook for your executive director, chief financial officer (CFO), housing director, board chair, and/or other members of your self- assessment task force. Be sure to keep at least one blank copy on hand as a master copy to use again.

  3. Set aside time with relevant staff members and your board chair to go through the workbook. The process should not take more than a total of three work days (one-half a day each for the preparation steps,2 and phases I, II and IV, with one day dedicated to phase III).

  4. Read through the list of materials needed at the beginning of each phase. If you are missing any of these materials, go through the preparation steps, step one, and then continue with the rest of the workbook.

PREPARATION STEPS

Step One:

Obtain copies of all organizational documents and store them where they are safe and readily available. If your organization does not already have these documents, they will first need to be created and approved by your board of directors.

Task A. Procure mission-critical documents (i.e., documents that your organization cannot function without).

  1. If your organization has not filed or does not have available a certificate or articles of incorporation, then do the following.
    • Check for the availability of the proposed name of your organization by calling your Secretary of State's office. Immediately after verifying that you are not duplicating another organization's name, file the articles of incorporation.
    • Write your articles of incorporation in general terms. Sample articles are usually available from the Secretary of State's office. Once your board has ratified your articles, file them with the Secretary of State's office.
    • Obtain a certificate of incorporation from the Secretary of State's office and store it in a safe place.
  2. If your organization has not drafted or does not have available organizational bylaws, then do the following.
    1. Write your bylaws, including the following items (See Appendix C for Sample Outline).
      • Membership: What is the composition of your membership? How and when do membership meetings occur? What notice is required for all meetings? What criteria or process is there for calling special meetings? What are the member voting procedures?
      • Board of Directors: How many board members are there? What is the board nomination and election process? How and when do board meetings occur? What is the length of board members' terms?
      • Fiscal Management: What month does your fiscal year start and end? What are board committee and officer fiscal responsibilities?
      • Amendments: How will your organization amend its bylaws?
    2. Ratify your bylaws, and keep a copy signed by your board of directors in a safe place.

  3. If your organization has not filed for or does not have available an IRS 501(c)(3) Certification Statement, then do the following.
    1. Call the IRS (1-800-829-3676) and request the following forms:
      • Form SS-4: Application for Employer Identification Number (EIN)3
      • Form 1023: Application for Recognition under 501(c)(3) of the Internal Revenue Code4
      • Form 8718: User Fee for Exempt Organization Determination Letter Request
      • Publication 557: Tax-Exempt Status for Your Organization
    2. Return all these forms to the Secretary of State or the IRS within 15 months of incorporation. Form 1023 requires a filing fee of approximately $500. To file these forms, your organization must be able to provide:
      • a description of its tax-exempt purpose and actual programs;
      • a statement of who your organization is serving and why;
      • a statement of where your organization's funds will originate (specifying private vs. public support); and a three-year projected budget.

Task B. Procure important organizational management documents.

  1. If you are missing any of the following documents, go to your nearest Technical Assistance and Training (TA/T) provider and schedule assistance to draft them (see list in Appendix B).

    Table.  List of Important Organizational Management Documents

     
    Contacted TA/T Provider
    (Check When Done)
    Date of Scheduled
    TA/T
    (Write Date)
      Employee Manual    
      Board Manual    
      Personnel Policy Notebook    
       Audited Financial Statements*    
      Risk Management/Contingency Plans    
       Accounting Control Procedures *    
      Computer Hardware/Software Inventory    
            * Contact CPA for assistance.

    Step Two:

    As you go through phases I through IV of this workbook, write down the activities that your group needs to do in order to increase its capacity on the worksheet below. Write the activities down in the form of goals that are measurable (they have a number attached to them) and accountable (they have a date and a person responsible attached to them).

    As you complete these activities during the year, check off the boxes next to them.

    On To Worksheet 1

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