Catalyst Wallets 101: A Smarter, Flexible Way to Invest in Organizational Capacity

At Catalyst Exchange, we believe that strong mission-driven organizations build stronger sectors. But too often, the way we fund capacity building is rigid, top-down, and disconnected from what organizations actually need.

Enter: Catalyst Wallets – our simple but powerful mechanism to put flexible, responsive, and impactful resources directly in the hands of organizations. Wallets unlock the ability for organizations to invest in the technical assistance and expertise they need, when they need it.

Whether you're a funder, a provider, or an organization looking to grow your impact, here’s your guide to how Catalyst Wallets work and why they matter!

Catalyst Wallets 101

A Catalyst Wallet is a fund set aside specifically for an organization to spend on capacity-building services. These aren’t one-off grants or general-purpose funds. They’re strategic, targeted, and built around shared investment.

Here’s how it works:

1. Funders allocate dollars into Wallets.
2. Organizations draw down on those Wallets to get expert support.
3. Catalyst Exchange matches organizations with the right providers and handles the logistics (scoping, contracting, and payment) so leaders and teams can focus on the work.
   

Why Wallets?

Wallets are more than a funding tool; they're a smarter way to fuel organizational growth. Here’s why they work:

• Flexible | Organizations can use wallet funds across multiple projects over time, adjusting as priorities evolve.
• Responsive | Organizations choose what kind of expertise they need and when. No top-down directives. No one-size-fits-all solutions.
• Efficient | Catalyst Exchange handles the heavy lifting: scoping projects, contracting vetted providers, and managing payments.
• Impact-Driven | Every dollar flows directly to capacity-building projects that strengthen the organization, and the sector as a whole.
• Shared Investment | Wallets can include a “co-pay” mechanism where funders cover most of the cost and organizations pay the rest. This model ensures ownership and equity (less resourced organizations pay a smaller co-pay percentage).

What Does it Look Like for Funders?

As a funder, you provide the financial backbone of Wallets. Here’s what your role includes:

1. Define scope & goals with Catalyst: Who is eligible, how much, and what for. 
2. Catalyst manages the match: We help organizations identify the “best use” for their Wallets, connect them with expert support, and manage the contracting and co-pay process.
3. Get clear results: You receive reporting on how funds are used, what organizations achieve, and where your dollars are having the most impact.

What Does it Look Like for Organizations?

Organizations get access to a wallet of funds, usually supported by a foundation. From there, here’s what they can do:

• Work with Catalyst Capacity Advisors to identify your priorities.
• Scope a project and get matched with a vetted provider.
• Draw down funds over time for different capacity needs.
• (If applicable) Pay a co-pay and contribute a portion of project costs.

This model is especially valuable for leaders who know what they need but lack the flexible funding to go get it.

What We’ve Learned from Wallets

Over hundreds of Wallet-supported projects, we’ve seen a few key lessons emerge:

• Wallets expand access & unlock co-funding

Wallets lower financial barriers for organizations that rarely receive capacity-building support. They also serve as a signal to local funders: "This work is worth investing in."

• Co-pay builds commitment

When organizations chip in, they’re more focused and invested. At the same time, a sliding-scale approach ensures equity and avoids overburdening lean teams.

• Time-bound use encourages focus

Wallets work best with a defined timeline. This helps balance urgency without any unnecessary pressure for leaders, so they can plan without losing momentum.

• Domain-focused wallets drive long-term thinking

When wallets focus on key capacity areas, they help organizations invest in the essential “vitamin” work that often gets deprioritized amid immediate demands.

Wallets are a Strategic Lever, Not Just a Funding Tool

At their core, Wallets are about putting power in the hands of organizations, while giving funders a high-impact, high-leverage way to support the field. They are designed to build the long-term strength of mission-driven organizations.