An organization's capacity, its people, systems, processes, and relationships, is the infrastructure that makes its mission possible. Like most infrastructure, it's invisible until it starts to crack.
Those cracks are becoming more visible across the social sector, revealing that ways of working that got us here can’t simply continue unchanged. Building a stronger social sector requires a clear-eyed look at where we are today, where we want to be, and how we get there.
SXSW EDU 2026 offered a moment to pulse check how the sector is navigating mounting pressure during a meetup co-hosted with Nicole Rodriguez Leach, Executive Director of Grantmakers for Education (GFE).
We brought together nonprofit leaders, educators, grantmakers, and consultants for a candid conversation about the state of capacity building in philanthropy. We explored the beliefs people hold, what we’re seeing on the ground, and how the ecosystem needs to shift.
In our time together, it was clear this conversation has never felt more urgent.
Leona Christy, Founder & CEO of Catalyst Exchange welcomed the SXSW Edu meetup attendees.
“Capacity building is necessary and the only way to create real innovation and change.” – Nonprofit leader
Capacity building makes long-term impact possible, yet it remains one of the hardest areas to resource effectively. Organizations need sustained funding, dedicated time, and focused attention to strengthen their people and systems. Support must also match the pace and complexity of today’s challenges. Capacity investments can be described in three ways:
Participants discussed what they're most interested in when it comes to capacity building and recent innovations they have seen.
“Humanity must be at the center.” – Nonprofit leader
“If people aren’t okay, the work won’t be either.” – Nonprofit leader
Capacity building is not just about tools or processes. It is fundamentally about people, culture, and leadership. This includes professional development, workplace culture, adaptability, and strategic planning.
Strong relationships hold this work together. For example, cross-sector collaboration and communities of practice play a critical role in helping organizations learn, adapt, and sustain their efforts.
“Mission-alignment comes first, and capacity building and sustainability go hand in hand.” – Educator
Capacity building must shift from being seen as a one-time intervention to an ongoing, integrated effort in how organizations operate and evolve. Artificial intelligence is emerging as a powerful lever for change, but realizing its potential requires thoughtful and inclusive integration. At the same time, core elements like strategic planning, leadership development, and organizational systems must become more adaptable to keep pace with rapidly shifting needs.
There will always be a need for painkillers. The challenge is ensuring that we are also consistently investing in vitamins.
Nicole Rodriguez Leach and Leona Christy shared an overview of the capacity building landscape and trends from the GFE benchmarking report.
If we are asking more of nonprofit and philanthropic leaders during this time of rising need and uncertainty, then more must also be required from the broader ecosystem.
Funders and philanthropic leaders must provide unrestricted capital alongside targeted capacity-building dollars. They should also rethink how impact is measured and better align funding practices with the realities grantees face.
Nonprofit leaders can strengthen their case by more clearly connecting capacity-building efforts to outcomes and mission impact.
Everyone has a role to play in continuing this conversation. Share these insights with your networks! The more we lift up candid dialogue about the sector, the easier it becomes to recognize its critical role in powering a thriving philanthropic ecosystem.