APPENDIX:

CAPACITY ASSESSMENT GRID

DESCRIPTION

The McKinsey Capacity Assessment Grid is a tool designed to

help nonprofit organizations assess their organizational capaci-
ty. The grid should be used in conjunction with the Capacity
Framework, which explains the seven elements of organization-
al capacity and their components. The grid asks the reader to
score the organization on each element of organizational
capacity, by selecting the text that best describes the organiza-
tion's current status or performance. The framework and the
descriptions in the grid were developed based on our teams
collective experience as well as the input of many nonprofit
experts and practitioners.

The grid may be used by nonprofit managers, staff, board

members and external capacity builders and funders with the
following objectives:

To identify those particular areas of capacity that are strongest

and those that need improvement

To measure changes in an organization's capacity over time

To draw out different views within an organization regarding

its capacity; different responses to the grid among staff, Board
members and funders, for example, can be a valuable
discussion-starter within an organization

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Capacity Assessment Grid

The grid is not a scientific tool, and should not be used as one.
It is very difficult to quantify the dimensions of capacity, and
the descriptive text under each score in the grid is not meant to
be exact. The scores are meant to provide a general indication
a "temperature" taking, if you will of an organization's
capacity level, in order to identify potential areas for improve-
ment. Furthermore, the results of the exercise should be inter-
preted in the context of the organizatins stage of development.
For example, a score of 2 on organizational processes may
be sufficient for a new organization, and this area may not
merit immediate attention. In fact, many organizations may
never get to level 4 on many elements.

This tool is meant to be a starting point only. We encourage

you to adapt the grid to meet your own organization's capacity
assessment needs.

I N S T R U CT I O N S

GUIDELINES FOR SURVEY ADMINISTRATORS

Decide for which point(s) in time you want to assess the nonprofit's
organizational capacity e.g., today, beginning of last year, 3 years
ago, etc. You may choose to assess the organization at two
different points in time, in order to measure changes in capacity.

Select the people whom you want to assess the nonprofit

(assessors); these can include nonprofit staff members, board
members, or external parties. Ideally, assessors should have a good
knowledge of the organization for all points in time chosen for the
assessment.

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 Capacity Assessment Grid

For the human resources section, decide whom you wish to

evaluate in the set of rows pertaining to "CEO/ED and/or senior
management team." Options include 1) CEO/ED only; 2) CEO/ED
and senior management team considered collectively; 3) CEO/ED
on the one hand and senior management team on the other; or 4)
individuals taken separately. If you choose option 3 or 4, you may
need to copy the relevant section for each separate person or group
of persons covered by the assessment.

GUIDELINES FOR THOSE FILLING OUT THE SURVEY

(ASSESSORS)

For each row, determine the description most suitable for the point
in time chosen and write the date (e.g., 6/99) in that box. If you
are also conducting the assessment for a second point in time,
repeat the procedure with the corresponding date (e.g., 6/01).

Mark the box that is closest to describing the situation at hand;

descriptions will rarely be perfect. Interpret the text loosely when
necessary and keep in mind that you are trying to score your
organization on the continuum of "1" to "4." You may select the
limit between two boxes if this seems most accurate.

If a row is not relevant to the organization assessed, designate the

row "N/A"; if you simply have no knowledge, mark the row
"N/K."

A PDF file of the Capacity Assessment Grid can be obtained on

Venture Philanthropy Partners Web site, www.venturepp.org

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Capacity Assessment Grid

CONTENTS

I. Aspirations
Mission
Vision clarity
Vision boldness
Overarching goals
II. Strategy
Overall strategy
Goals/performance targets
Program relevance, and integration
Program growth and replication
New program development
Funding model
III. Organizational skills
Performance management
Performance measurement
Performance analysis and program adjustments
Planning
Monitoring of landscape
Strategic planning
Financial planning/budgeting
Operational planning
Human resources planning
Fund-raising and revenue generation
Fund-raising
Revenue generation
External relationship building and management
Partnership and alliances development and
nurturing
Local community presence and involvement

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 Capacity Assessment Grid

Other organizational skills

Public relations and marketing
Influencing of policy-making
Management of legal and liability matters
Organizational processes use and development
IV. Human resources
Staffing levels
Board composition and commitment
Board involvement and support
CEO/executive director and/or senior management team
Passion and vision
Impact orientation
People and organizational leadership/effectiveness
Personal and interpersonal effectiveness
Analytical and strategic thinking
Financial judgment
Experience and standing
Management team and staff dependence on
CEO/executive director
Senior management team (if not previously covered)
Staff
Volunteers
V. Systems and infrastructure
Systems
Planning systems
Decision making framework
Financial operations management
Human resources management management recruiting,
development, and retention

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Capacity Assessment Grid

Human resources management general staff recruiting,

development, and retention
Human resources management incentives
Knowledge management
Infrastructure
Physical infrastructure buildings and office space
Technological infrastructure telephone/fax
Technological infrastructure computers, applications,
network, and e-mail
Technological infrastructure Web site
Technological infrastructure databases and management
reporting systems
VI. Organizational structure
Board governance
Organizational design
Interfunctional coordination
Individual job design
VII. Culture
Performance as shared value
Other shared beliefs and values
Shared references and practices

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McKinsey Capacity 1 Clear need for 2 Basic level of 3 Moderate level of 4 High level of
Assessment Grid I. ASPIRATIONS increased capacity capacity in place capacity in place capacity in place

Mission No written mission Some expression Clear expression Clear expression

or limited of organizations of organizations of organizations
expression of the reason for existence reason for existence reason for existence which
organizations reason for that reflects its values which reflects its values describes an enduring
existence; lacks clarity or and purpose, but may and purpose; held by reality that reflects its
specificity; either held by lack clarity; held by only a many within organization values and purpose; broadly
very few in organization or few; lacks broad and often referred to held within organization and
rarely referred to agreement or rarely frequently referred to
referred to
Vision clarity Little shared Somewhat clear Clear and specific Clear, specific,
understanding of or specific under- understanding of and compelling
what organization aspires standing of what what organization aspires understanding of what
to become or achieve organization aspires to to become or achieve; organization aspires to
beyond the stated become or achieve; lacks held by many within the become or achieve; broadly
mission specificity or clarity; held organization and often held within organization and
by only a few; or on the used to direct actions and consistently used to direct
wall, but rarely used to set priorities actions and set priorities
direct actions or set
priorities
Vision boldness No clear vision Vision exists but Vision is distinctive Vision reflects an
articulated falls short of along only one of inspiring view of
reflecting an inspiring following two attributes: future and is demanding
view of the future and of reflects an inspiring view but achievable
being demanding yet of future; demanding yet
achievable achievable
 Overarching goals Vision (if it exists) Vision translated Vision translated Vision translated into
not explicitly into a concrete into small set of clear, bold set of (up
translated into small set set of goals; goals lack at concrete goals, but goals to three) goals that
of concrete goals, though least two of following four lack at most two of organization aims to
there may be general (but attributes: clarity, following four attributes: achieve, specified by
inconsistent and boldness, associated clarity, boldness, concrete to measure
imprecise) knowledge metrics, or time frame for associated metrics, or success for each criterion,
within organization of measuring attainment; time frame for measuring and by well-defined time
overarching goals and goals known by only a attainment; goals are frames for attaining goals;
what it aims to achieve few, or only occasionally known by many within goals are broadly known
used to direct actions or organization and often within organization and
set priorities used by them to direct consistently used to direct
actions and set priorities actions and set priorities
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McKinsey Capacity 1 Clear need for 2 Basic level of 3 Moderate level of 4 High level of
Assessment Grid II. STRATEGY increased capacity capacity in place capacity in place capacity in place
Overall strategy Strategy is either Strategy exists Coherent Organization has
nonexistent, but is either not strategy has clear, coherent
unclear, or incoherent clearly linked to mission, been developed and is medium- to long-term
(largely set of scattered vision, and overarching linked to mission and strategy that is both
initiatives); strategy has goals, or lacks vision but is not fully actionable and linked to
no influence over day-to- coherence, or is not ready to be acted upon; overall mission, vision, and
day behavior easily actionable; strategy is mostly known overarching goals; strategy
strategy is not broadly and day-to-day behavior is is broadly known and
known and has limited partly driven by it consistently helps drive day-
influence over day-to-day to-day behavior at all levels
behavior of organization
Goals/performance Targets are non- Realistic targets Quantified, Limited set of
targets existent or few; exist in some aggressive targets quantified, genuinely
targets are vague, or key areas, and are mostly in most areas; linked to demanding performance
confusing, or either too aligned with aspirations aspirations and strategy; targets in all areas; targets
easy or impossible to and strategy; may lack mainly focused on are tightly linked to
achieve; not clearly linked aggressiveness, or be outputs/outcomes aspirations and strategy,
to aspirations and short-term, lack (results of doing things output/outcome-focused
strategy, and may change milestones, or mostly right) with some inputs; (i.e., results of doing things
from year to year; targets focused on inputs typically multiyear right, as opposed to inputs,
largely unknown or (things to do right), or targets, though may lack things to do right), have
ignored by staff often renegotiated; staff milestones; targets are annual milestones, and are
may or may not know and known and adopted by long-term nature; staff
adopt targets most staff who usually consistently adopts targets
use them to broadly guide and works diligently achieve
work them
Program relevance Core programs Most programs Core programs All programs
and integration and services and services well and services well and services well
vaguely defined and lack defined and can be solidly defined and aligned with defined and fully aligned
clear alignment with linked with mission and mission and goals; with mission and goals;
mission and goals; goals; program offerings program offerings fit program offering are clearly
programs seem scattered may be somewhat together well as part of linked to one another and to
and largely unrelated to scattered and not fully clear strategy overall strategy; synergies
each other integrated into clear across programs are
strategy captured
 Program growth No assessment Limited Occasional Frequent
and replication of possibility of assessment assessment of assessment of
scaling up existing of possibility of scaling up possibility of scaling up possibility of scaling up
programs; limited ability existing programs and, existing programs and existing programs and when
to scale up or replicate even when judged when judged appropriate, judged appropriate, action
existing programs appropriate, little or action occasionally taken; always taken; efficiently and
limited action taken; able to scale up or effectively able to grow
some ability either to replicate existing existing programs to meet
scale up or replicate programs needs of potential service
existing programs recipients in local area or
other geographies
New program No assessment Limited Occasional Continual
development of gaps in ability assessment of assessment of assessment of
of current program to gaps in ability of existing gaps in ability of existing gaps in ability of existing
meet recipient needs; program to meet recipient program to meet recipient programs to meet recipient
limited ability to create needs, with little or needs, with some needs and adjustment
new programs; new limited action taken; adjustments made; always made; ability and
programs created largely some ability to modify demonstrated ability to tendency efficiently and
in response to funding existing programs and modify and fine-tune effectively to create new,
availability create new programs existing programs and truly innovative programs to
create new programs the needs of potential
service recipients in local
area or other geographies;
continuous pipeline of new
ideas
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McKinsey Capacity 1 Clear need for 2 Basic level of 3 Moderate level of 4 High level of
Assessment Grid II. STRATEGY increased capacity capacity in place capacity in place capacity in place
Funding model Organization Organization has Solid basis of Highly diversified
highly dependent access to multiple funders in most funding across
on a few funders, largely types of funding (e.g., types of funding source multiple source types;
of same type (e.g., government, foundations, (e.g., government, organization insulated from
government or corporations, private foundations, corporations, potential market
foundations or private individuals) with only a private individuals); some instabilities (e.g., fully
individuals) few funders in each type, activities to hedge developed endowment)
or has many funders against market and/or has developed
within only one or two instabilities (e.g., building sustainable revenue-
types of funders of endowment); generating activities; other
organization has nonprofits try to imitate
developed some organizations fund-raising
sustainable revenue- activities and strategies
generating activity
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McKinsey Capacity III. ORGANIZATIONAL 1 Clear need for 2 Basic level of 3 Moderate level of 4 High level of
Assessment Grid SKILLS increased capacity capacity in place capacity in place capacity in place

Performance
management
Performance Very limited Performance Performance Well-developed
measurement measurement partially measured measured and comprehensive,
and tracking of and progress partially progress tracked in integrated system
performance; all or most tracked; organization multiple ways, several (e.g., balanced scorecard)
evaluation based on regularly collects solid times a year, considering used for measuring
anecdotal evidence; data on program activities social, financial, and organizations performance
organization collects and outputs (e.g., number organizational impact of and progress on continual
some data on program of children served) but program and activities; basis, including social,
activities and outputs lacks data-driven, multiplicity of financial, and organizational
(e.g., number of children externally validated social performance indicators; impact of program and
served) but has no social impact measurement social impact measured, activities; small number of
impact measurement but control group, clear, measurable, and
(measurement of social longitudinal (i.e., long- meaningful key performance
outcomes, e.g., drop-out term) or third-party nature indicators; social impact
rate lowered) of evaluation is missing measured based on
longitudinal studies with
control groups, and
performed or supervised by
third-party experts
Performance Few external Some efforts Effective internal Comprehensive
analysis and performance made to benchmark and external internal and external
program comparisons made; activities and outcomes benchmarking occurs but benchmarking part of the
adjustments internal performance data against outside world; driven largely by top culture and used by staff in
rarely used to improve internal performance data management and/or target-setting and daily
program and organization used occasionally to confined to selected operations; high awareness
improve organization areas; learnings of how all activities rate
distributed throughout against internal and exter-
organization, and often nal best-in-class bench-
used to make marks; systematic practice
adjustments and of making adjustments and
improvements improvements on basis of
benchmarking
 Planning
Monitoring of Minimal Basic Solid Extensive
landscape knowledge and knowledge of knowledge of knowledge of
understanding of other players and alternative players and alternative players and alternative
players and alternative models in program area models in program area; models in program area;
models in program area but limited ability to good ability to adapt be- refined ability and
adapt behavior based on havior based on acquired systematic tendency to
acquired understanding understanding, but only adapt behavior based on
occasionally carried out understanding
Strategic planning Limited ability Some ability Ability and Ability to
and tendency to and tendency to tendency to develop and refine
develop strategic plan, develop high-level develop and refine concrete, realistic and
either internally or via strategic plan either concrete, realistic detailed strategic plan;
external assistance; if internally or via external strategic plan; some critical mass of internal
strategic plan exists, it is assistance; strategic plan internal expertise in expertise in strategic
not used roughly directs strategic planning or planning, or efficient use of
management decisions access to relevant external, sustainable, highly
external assistance; qualified resources;
strategic planning carried strategic planning exercise
out on a near-regular carried out regularly;
basis; strategic plan used strategic plan used
to guide management extensively to guide
decisions management decisions
Financial planning/ No or very Limited financial Solid financial Very solid financial
budgeting limited financial plans, ad hoc plans, regularly plans, continuously
planning; general budget update; budget utilized as updated; budget updated; budget integrated
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developed; only one operational tool; used to integrated into into full operations; as stra-
budget for entire central guide/assess financial operations; reflects tegic tool, it develops from
organization; performance activities; some attempt organizational needs; process that incorpo-rates
against budget loosely or to isolate divisional solid efforts made to and reflects organiza-tional
not monitored (program or geographical) isolate divisional needs and objectives; well-
budgets within central (program or geographical) understood divisional (pro-
budget; performance-to- budgets within central gram or geographical) bud-
budget monitored budget; performance-to- gets within overall central
periodically budget monitored budget; performance-to-bud-
regularly get closely and regularly
monitored
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McKinsey Capacity III. ORGANIZATIONAL 1 Clear need for 2 Basic level of 3 Moderate level of 4 High level of
Assessment Grid SKILLS increased capacity capacity in place capacity in place capacity in place

Planning
Operational planning Organization runs Some ability Ability and Organization
operations purely and tendency to tendency to develops and
on day-to-day basis with develop high-level develop and refine refines concrete, realistic,
no short- or longer-term operational plan either concrete, realistic and detailed operational
planning activities; no internally or via external operational plan; some plan; has critical mass of
experience in operational assistance; operational internal expertise in internal expertise in
planning plan loosely or not linked operational planning or operational planning, or
to strategic planning access to relevant efficiently uses external,
activities and used external assistance; sustainable, highly qualified
roughly to guide operational planning resources; operational
operations carried out on a near- planning exercise carried
regular basis; operational out regularly; operational
plan linked to strategic plan tightly linked to
planning activities and strategic planning activities
used to guide operations and systematically used to
direct operations
Human resources Organization Some ability Ability and Organization is
planning uncovers and/ and tendency to tendency to able to develop
or addresses HR needs develop high-level HR plan develop and refine and refine concrete,
only when too large to either internally or via concrete, realistic HR realistic, and detailed HR
ignore; lack of HR external assistance; HR plan; some internal plan; has critical mass of
planning activities and plan loosely or not linked expertise in HR planning internal expertise in HR
expertise (either internal to strategic planning or access to relevant planning (via trained,
or accessible external); activities and roughly external assistance; HR dedicated HR manager), or
no experience in HR guides HR activities planning carried out on efficiently uses external,
planning near-regular basis; HR sustainable, highly qualified
plan linked to strategic resources; HR planning
planning activities and exercise carried out
used to guide HR regularly; HR plan tightly
activities linked to strategic planning
activities and systematically
used to direct HR activities
 Fund-raising and
revenue generation
Fund-raising Generally Main fund- Regular fund- Highly developed
weak fund-raising raising needs raising needs internal fund-
skills and lack of covered by some adequately covered by raising skills and expertise
expertise (either internal combination of internal well developed internal in all funding source types
or access to external skills and expertise, and fund-raising skills, to cover all regular needs;
expertise) access to some external occasional access to access to external expertise
fund-raising expertise some external fund- for additional extraordinary
raising expertise needs
Revenue generation No internal Some internal Some proven Significant internal
revenue- revenue- internal revenue- revenue-generation;
generation activities; generation activities, generation activities and experienced and skilled in
concepts such as cause- however financial net skills; these activities areas such as cause-related
related marketing, fee-for- contribution is marginal; provide substantial marketing, fee-for-services
services and retailing are revenue-generation additional funds for and retailing; revenue-
neither explored nor activities distract from program delivery, but generating activities
pursued programmatic work and partially distract from support, but dont distract
often tie up senior programmatic work and from focus on creating
management team require significant senior social impact
management attention
External relationship
building and management
Partnerships and Limited use of Early stages of Effectively built Built, leveraged,
alliances partnerships and building relation- and leveraged and maintained
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development and alliances with public ships and collaborating some key relationships strong, high-impact,
nurturing sector, nonprofit, or for- with other for-profit, with few types of relevant relationships with variety of
profit entities nonprofit, or public sector parties (for-profit, public, relevant parties (local,
entities and nonprofit sector state, and federal
entities); some relations government entities as well
may be precarious or not as for-profit, other nonprofit,
fully win-win and community agencies);
relationships deeply
anchored in stable, long-
term, mutually beneficial
collaboration
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McKinsey Capacity III. ORGANIZATIONAL 1 Clear need for 2 Basic level of 3 Moderate level of 4 High level of
Assessment Grid SKILLS increased capacity capacity in place capacity in place capacity in place

Local community Organizations Organizations Organization Organization widely

presence and presence either presence reasonably well- known within larger
involvement not recognized or somewhat recognized, known within community, community, and perceived
generally not regarded as and generally regarded as and perceived as open as actively engaged with
positive; few members of positive within the and responsive to and extremely responsive to
local community (e.g., community; some community needs; it; many members of the
academics, other members of larger members of larger larger community (including
nonprofit leaders) community constructively community (including a many prominent members)
constructively involved in engaged with organization few prominent ones) actively and constructively
the organization constructively involved in involved in organization
organization (e.g., board, fund-raising)
Other organizational
skills
Public relations and Organization Organization Organization Organization fully
marketing makes no or takes oppor- considers PR/ aware of power
limited use of tunities to engage in marketing to be useful, of PR/marketing activities,
PR/marketing; general PR/marketing as they and actively seeks and continually and actively
lack of PR/marketing arise; some PR/ opportunities to engage in engages in them; broad pool
skills and expertise marketing skills and these activities; critical of nonprofit PR/marketing
(either internal or experience within staff or mass of internal expertise expertise and experience
accessible external or via external assistance and experience in within organization or
expertise PR/marketing or access efficient use made of
to relevant external external, sustainable, highly
assistance qualified resources
Influencing of policy- Organization Organization Organization Organization
making does not have is aware of its is fully aware pro-actively and
ability or is unaware of possibilities in influencing of its possibilities in reactively influences policy-
possibilities for policy-making; some influencing policy-making making, in a highly effective
influencing policy-making; readiness and skill to and is one of several manner, on state and
never called in on participate in policy- organizations active in national levels; always ready
substantive policy- discussion, but rarely policy-discussions on for and often called on to
discussions invited to substantive state or national level participate in substantive
policy discussions policy discussion and at
times initiates discussions
 Management of Organization Legal support Legal support Well-developed,
legal and liability does not resources regularly available effective, and
matters anticipate legal issues, identified, readily and consulted in planning; efficient internal legal
but finds help and available, and employed routine legal risk infrastructure for day-to-day
addresses issues on as needed basis; management and legal work; additional
individually when they major liability exposures occasional review of access to general and
arise; property insurance managed and insured insurance specialized external
includes liability (including property expertise to cover peaks
component liability and workers and extraordinary cases;
compensation) continuous legal risk
management and regular
adjustment of insurance
Organizational Limited set Basic set of Solid, well- Robust, lean,
processes of processes processes in designed set and well-designed
use and (e.g., decision making, core areas for ensuring of processes in place in set of processes (e.g.,
development planning, reviews) for efficient functioning of core areas to ensure decision making, planning,
ensuring effective organization; processes smooth, effective reviews) in place in all areas
functioning of the known, used, and truly functioning of to ensure effective and
organization; use of accepted by only portion organization; processes efficient functioning of
processes is variable, or of staff; limited known and accepted by organization; processes are
processes are seen as ad monitoring and many, often used and widely known, used and
hoc requirements assessment of processes, contribute to increased accepted, and are key to
(paperwork exercises); with few improvements impact; occasional ensuring full impact of
no monitoring or made in consequence monitoring and organization; continual
assessment of processes assessment of processes, monitoring and assessment
with some improvements of processes, and
made systematic improvement
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McKinsey Capacity IV. HUMAN 1 Clear need for 2 Basic level of 3 Moderate level of 4 High level of
Assessment Grid RESOURCES increased capacity capacity in place capacity in place capacity in place

Staffing levels Many positions Most critical Positions within Positions within
within and positions within and peripheral and peripheral
peripheral to organization and peripheral to to organization to organization (e.g., staff,
(e.g., staff, volunteers, organization (e.g., staff, (e.g., staff, volunteers, volunteers, board, senior
board, senior volunteers, board, senior board, senior management) are all fully
management) are unfilled, management) are staffed management) are almost staffed (no vacancies); no
inadequately filled, or (no vacancies), and/or all staffed (no vacancies); turnover or attendance
experience high turnover experience limited few turnover or problems
and/or poor attendance turnover or attendance attendance problems
problems
Board composition Membership with Some diversity in Good diversity in Membership with
and commitment limited diversity fields of practice; fields of practice broad variety of
of fields of practice and membership represents a and expertise; fields of practice and
expertise; drawn from a few different membership represents expertise, and drawn from
narrow spectrum of constituencies (from most constituencies the full spectrum of
constituencies (from among nonprofit, (nonprofit, academia, constituencies (nonprofit,
among nonprofit, academia, corporate, corporate, government, academia, corporate,
academia, corporate, government, etc.); etc.); good commitment government, etc.); includes
government, etc.); little moderate commitment to to organizations success, functional and program
or no relevant experience; organizations success, vision and mission, and content-related expertise,
low commitment to vision and mission; behavior to suit; regular, as well as high-profile
organizations success, regular, purposeful purposeful meetings are names; high willingness and
vision and mission; meetings are well-planned well-planned and proven track record of
meetings infrequent and attendance is good attendance is investing in learning about
and/or poor attendance overall consistently good, the organization and
occasional subcommittee addressing its issues;
meetings outstanding commitment to
the organizations success,
mission and vision; meet in
person regularly, good
attendance, frequent
meetings of focused
subcommittees
 Board involvement Provide little Provide occasional Provide direction, Provide strong
and support direction, support, direction, support and support and direction, support,
and accountability to accountability to accountability to and accountability to
leadership; board not fully leadership; informed programmatic leadership; programmatic leadership
informed about material about all material fully informed of all major and engaged as a strategic
and other major matters in a timely matters, input and resource; communication
organizational matters; manner and responses actively sought between board and
largely feel-good responses/decisions and valued; full leadership reflects mutual
support actively solicited participant in major respect, appreciation for
decisions roles and responsibilities,
shared commitment and
valuing of collective wisdom
CEO/executive director and/
or senior management team
Passion and vision Low energy level Good energy Inspiringly Contagiously
and commitment; level; visible energetic; shows energetic and
little continued attention commitment to constant, visible highly committed; lives the
to organizational vision organization and its vision commitment to organizations vision;
organization and its compellingly articulates
vision; excites others path to achieving vision that
around vision enables others to see where
they are going
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McKinsey Capacity IV. HUMAN 1 Clear need for 2 Basic level of 3 Moderate level of 4 High level of
Assessment Grid RESOURCES increased capacity capacity in place capacity in place capacity in place
CEO/executive director and/
or senior management team
Impact orientation Focused purely Focused on Sees financial Guides organiza-
on social impact; social impact soundness as tion to succeed
financials viewed as an with some appreciation essential part of simultaneously in dual
unfortunate constraint; for cost-effectiveness organizational impact, mission of social impact and
fails to deliver impact when possible; constantly together with social optimal financial efficiency;
consistently; delays delivers satisfactory impact; focuses on ways constantly seeks and finds
decision making; impact given resources; to better use existing new opportunities to
reluctant to change promptly addresses resources to deliver improve impact; anticipates
status quo; mandates issues; understands highest impact possible; possible problems; has
rather than leads change implications and impact has a sense of urgency in sense of urgency about
of change on people addressing issues and upcoming challenges;
rapidly moves from communicates compelling
decision to action; need for change that
develops and implements creates drive; aligns entire
actions to overcome organization to support
resistance to change change effort
People and Has difficulty Is responsive Actively and Constantly
organizational building trust to opportunities easily builds establishing
leadership/ and rapport with others; from others to work rapport and trust with successful, win-win
effectiveness micromanages projects; together; expresses others; effectively relationships with others,
shares little of own confidence in others encourages others to both within and outside the
experiences as ability to be successful; succeed; gives others organization; delivers
developmental/coaching shares own experience freedom to work their own consistent, positive and
tool and expertise way; gives people reinforcing messages to
freedom to try out ideas motivate people; able to let
and grow others make decisions and
take charge; finds or
creates special
opportunities to promote
peoples development
 Personal and Fails to show Earns respect Is respected Is viewed as
interpersonal respect for of others, takes and sought out outstanding
effectiveness others consistently, may time to build by others for advice and people person; uses
be openly judgmental or relationships; has counsel; has strong diversity of communication
critical; has difficulty presence, is able to presence and charisma; styles, including exceptional
influencing without using influence and build uses multiple approaches charisma, to inspire others
power, limited charisma support using limited to get buy-in, appreciates and achieve impact;
or influence; limited communication style; the impact of his/her continually self-aware,
curiosity about new ideas accepts learning and words or actions; seeks actively works to better
and experiences personal development new learning and personal oneself; outstanding track
opportunities that arise development record of learning and
opportunities personal development
Analytical and Is uncomfortable Is able to cope Quickly Has keen and
strategic thinking with complexity with some assimilates exceptional
and ambiguity and does complexity and ambiguity; complex information and ability to synthesize
whatever possible to able to analyze strategies able to distill it to core complexity; makes informed
reduce or avoid it; relies but does not yet generate issues; welcomes decisions in ambiguous,
mainly on intuition rather strategies ambiguity and is uncertain situations;
than strategic analysis comfortable dealing with develops strategic
the unknown; develops alternatives and identifies
robust strategies associated rewards, risks,
and actions to lower risks
Financial judgment Has difficulty Draws Has sound Has exceptional
considering appropriate financial financial judgment;
financial implications of conclusions after studying judgment; consistently has keen, almost intuitive
decisions all the facts; understands considers financial sense for financial
Ve n t u r e P h i l a n t h r o p y Pa r t n e r s

basic financial concepts implications of decisions implications of decisions

and drives for financial
impact of major decisions
99
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McKinsey Capacity IV. HUMAN 1 Clear need for 2 Basic level of 3 Moderate level of 4 High level of
Assessment Grid RESOURCES increased capacity capacity in place capacity in place capacity in place

CEO/executive director and/

or senior management team
Experience and Limited Some relevant Significant Highly
standing experience in experience in experience in experienced in
nonprofit management nonprofit management; nonprofit management; nonprofit management;
and few relevant some relevant capabilities many relevant capabilities many distinctive capabilities
capabilities from other from other field(s); from other field(s); from other field(s) (e.g., for-
field(s); little evidence of emerging social significant evidence of profit, academia);
social entrepreneur-like entrepreneur-like social entrepreneur-like exceptional evidence of
qualities; limited qualities; some local qualities; some national social entrepreneur-like
recognition in the recognition in the recognition as a qualities; possesses a
nonprofit community nonprofit community leader/shaper in comprehensive and deep
particular sector understanding of the sector;
recognized nationally as a
leader/shaper in particular
sector
Management team Very strong High dependence Limited Reliance but
and staff dependence on on CEO/ dependence not dependence
dependence on CEO/executive director; executive director; on CEO/executive on CEO/ executive director;
CEO/executive organization would cease organization would director; organization smooth transition to new
director to exist without his/her continue to exist without would continue in similar leader could be expected;
presence his/her presence, but way without his/her fund-raising and operations
likely in a very different presence but areas such likely to continue without
form as fund-raising or major problems; senior
operations would likely management team can fill in
suffer significantly during during transition time;
transition period; no several members of manage-
member of management ment team could potentially
team could potentially take on CEO/ED role
take on CEO/ED role
 Senior management Team has no Team has Team has Team highly
team or very limited some experience significant experienced in
experience in nonprofit or in nonprofit or for-profit experience in nonprofit or nonprofit or for-profit
for-profit management; management; team for-profit management; management; drawn from
team represents few represents some team represents most full spectrum of
constituencies (nonprofit, constituencies (nonprofit, constituencies (nonprofit, constituencies (nonprofit,
academia, corporate, academia, corporate, academia, corporate, academia, corporate,
government, etc.) and government, etc.); some government, etc.); government, etc.);
has no or very limited relevant capabilities and significant relevant outstanding capabilities and
capabilities and track track record from other capabilities and track track record from other
record from other fields; fields; good track record record from other fields; fields; outstanding track
limited track record of of learning and personal good track record of record of learning and
learning and personal development; energetic learning and personal personal development;
development; mostly and committed development; highly contagiously energetic and
energetic and committed energetic and committed committed

Staff Staff drawn from Some variety of Staff drawn from Staff drawn from
a narrow range staff back- diverse back- extraordinarily
of backgrounds and grounds and experiences; grounds and experiences, diverse backgrounds and
experiences; interest and good capabilities, and bring a broad range of experiences, and bring
abilities limited to present including some ability to skills; most are highly broad range of skills; most
job; little ability to solve solve problems as they capable and committed to staff are highly capable in
problems as they arise arise; many interested in mission and strategy; multiple roles, committed
work beyond their current eager to learn and both to mission/ strategy
jobs and in the success of develop, and assume and continuous learning;
the organizations mission increased responsibility most are eager and able to
take on special projects and
Ve n t u r e P h i l a n t h r o p y Pa r t n e r s

collaborate across divisional

lines; staff are frequent
source of ideas and
momentum for improvement
and innovation
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McKinsey Capacity IV. HUMAN 1 Clear need for 2 Basic level of 3 Moderate level of 4 High level of
Assessment Grid RESOURCES increased capacity capacity in place capacity in place capacity in place

Volunteers Limited abilities; Good abilities; Very capable Extremely capable

may be unreli- mostly reliable, set of individuals, set of individuals,
able or have low loyal, and committed to bring required skills to bring complementary skills
commitment; volunteers organizations success; organization; reliable, to organization; reliable,
are poorly managed volunteers managed but loyal and highly loyal, highly committed to
without standards and committed to organizations success and
little accountability organizations success to making things happen;
and to making things often go beyond call of duty;
happen; work easily with able to work in a way that
most staff, but do not serves organization well,
generally play core roles including ability to work
without substantial staff easily with wide range of
supervision; volunteers staff and play core roles
are managed and without special supervision;
contribute to the overall volunteers managed very
success of the well and significantly
organization contribute to overall
success of organization
Ve n t u r e P h i l a n t h r o p y Pa r t n e r s 103
 104

McKinsey Capacity IV. SYSTEMS

Assessment Grid AND INFRA- 1 Clear need for 2 Basic level of 3 Moderate level of 4 High level of
STRUCTURE increased capacity capacity in place capacity in place capacity in place

Systems
Planning systems Planning happens Planning done Regular planning Regular planning
on an ad hoc regularly and complemented complemented
bases only and is not uses some systematically by ad hoc planning when by ad hoc planning when
supported by collected data needed; some data needed; clear, formal
systematically collected collected and used systems for data collection
data systematically to support in all relevant areas; data
planning effort and used systematically to
improve it support planning effort and
improve it
Decision making Decisions made Appropriate Clear, largely Clear, formal lines/
framework largely on an decision makers formal lines/ systems for
ad hoc basis by one known; decision making systems for decision decision making that involve
person and/or whomever process fairly well making but decisions are as broad participation as
is accessible; highly established and process not always appropriately practical and appropriate
informal is generally followed, but implemented or followed; along with dissemination/
often breaks down and dissemination of interpretation of decision
becomes informal decisions generally good
but could be improved
Financial operations Gifts and grants Financial Formal internal Robust systems
management deposited and activities controls governing and controls in
acknowledged, bills paid, transparent, clearly and all financial operations; place governing all financial
supporting documentation consistently recorded and fully tracked, supported operations and their
collected/retained documented, include and reported, annually integration with budgeting,
appropriate checks and audited fund flows well decision making, and
balances, and tracked to managed; attention is organizational
approve budget paid to cash flow objectives/strategic goals;
management cash flow actively managed
 Human resources Standard career Some tailoring Recruitment, Well-planned
management paths in place of development development, process to recruit,
management without considering plans for brightest stars; and retention of key develop, and retain key
recruiting, managerial development; personal annual reviews managers is priority and managers; CEO/executive
development, and no or very limited training, incorporate development high on CEO/executive director takes active
retention coaching, and feedback; plan for each manager; directors agenda; some interest in managerial
no regular performance limited willingness to tailoring in development development; individually
appraisals; no ensure high-quality job plans for brightest stars; tailored development plans
systems/processes to occupancy; some formal relevant training, job for brightest stars; relevant
identify new managerial recruiting networks are in rotation, and regular internal and
talent place coaching/feedback, and external training, job
consistent performance rotation,
appraisal are coaching/feedback, and
institutionalized; genuine consistent performance
concern for high-quality appraisal are
job occupancy; well institutionalized; proven
connected to potential willingness to ensure high-
sources of new talent quality job occupancy; well-
connected to potential
sources of new talent
Human resources Standard career No active Limited use Management
management paths in place development of active develop- actively interested
general staff without considering staff tools/ programs; ment tools/programs; in general staff
recruiting, development; limited feedback and coaching frequent formal and development; well-thought-
development, and training, coaching and occur sporadically; informal coaching and out and targeted
retention feedback; no regular performance evaluated feedback; performance development plans for key
performance appraisals; occasionally; limited regularly evaluated and employees/positions;
Ve n t u r e P h i l a n t h r o p y Pa r t n e r s

no systems/processes to willingness to ensure discussed; genuine frequent, relevant training,

identify new talent high-quality job concern for high-quality job rotation, coaching/
occupancy; sporadic job occupancy; regular feedback, and consistent
initiatives to identify new concerted initiatives to performance appraisal
talent identify new talent institutionalized; proven
willingness to ensure high-
quality job occupancy;
continuous, proactive
initiatives to identify new
talent
105
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McKinsey Capacity IV. SYSTEMS

Assessment Grid AND INFRA- 1 Clear need for 2 Basic level of 3 Moderate level of 4 High level of
STRUCTURE increased capacity capacity in place capacity in place capacity in place
Systems
Human resources No incentive Some basic Many elements Well-designed,
management system to elements of of incentive clear, and well-
incentives speak of; or incentive incentive system in place; system in place; includes accepted incentive system;
system that is ineffective may include one of a few of following: includes competitive salary
and/or generates bad will following: competitive competitive salary (partly (partly performance-based),
salary (possibly partly performance-based), attractive career
performance-based), attractive career development options,
attractive career development options, opportunities for leadership
development options, or opportunities for and entrepreneurship;
opportunities for leadership and system effective in
leadership and entrepreneurship; obvious motivating staff to
entrepreneurship; some effect in motivating staff overdeliver in their job
evidence of motivational to overdeliver
effect on staff
performance
Knowledge No formal Systems exist Well-designed, Well-designed,
management systems to in a few areas user-friendly user-friendly,
capture and document but either not user- systems in some areas; comprehensive systems to
internal knowledge friendly or not not fully comprehensive; capture, document, and
comprehensive enough to systems are known by disseminate knowledge
have an impact; systems many people within the internally in all relevant
known by only a few organization and often areas; all staff is aware of
people, or only used systems, knowledgeable in
occasionally used their use, and make
frequent use of them
 Infrastructure
Physical Inadequate Physical infra- Fully adequate Physical infra-
infrastructure physical infra- structure can physical infra- structure well-
buildings and office structure, resulting in be made to work well structure for the current tailored to organizations
space loss of effectiveness and enough to suit needs of the organization; current and anticipated
efficiency (e.g., organizations most infrastructure does not future needs; well-designed
unfavorable locations for important and immediate impede effectiveness and and thought out to enhance
clients and employees, needs; a number of efficiency (e.g., favorable organizations efficiency and
insufficient workspace for improvements could locations for clients and effectiveness (e.g.,
individuals, no space for greatly help increase employees, sufficient especially favorable
teamwork) effectiveness and individual and team office locations for clients and
efficiency (e.g., no good space, possibility for employees, plentiful team
office space for confidential discussions) office space encourages
teamwork, no possibility teamwork, layout increases
of holding confidential critical interactions among
discussions, employees staff)
share desks)
Technological Status, lack of Adequate Solid basic Sophisticated
infrastructure sophistication, basic telephone telephone and reliable
telephone/fax or limited number of and fax facilities and fax facilities telephone and fax facilities
telephone and fax accessible to most staff; accessible to entire staff accessible by all staff (in
facilities are an may be moderately (in office and at front office and at frontline),
impediment to day-to-day reliable or user-friendly, or line); cater to day-to-day includes around-the-clock,
effectiveness and may lack certain features communication needs individual voice mail;
efficiency that would increase with essentially no supplemented by additional
effectiveness and problems; includes facilities (e.g., pagers, cell
Ve n t u r e P h i l a n t h r o p y Pa r t n e r s

efficiency (e.g., individual additional features phones) for selected staff;

voice-mail), or may not be contributing to increased effective and essential in
easily accessible to some effectiveness and increasing staff
staff (e.g. front-line efficiency (e.g., individual, effectiveness and efficiency
deliverers) remotely accessible
voice-mail)
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McKinsey Capacity IV. SYSTEMS

Assessment Grid AND INFRA- 1 Clear need for 2 Basic level of 3 Moderate level of 4 High level of
STRUCTURE increased capacity capacity in place capacity in place capacity in place
Infrastructure
Technological Limited/no Well-equipped Solid hardware State-of-the-art,
infrastructure use of at central level; and software fully networked
computers, computers or other incomplete/limited infrastructure accessible computing hardware with
applications, technology in day-to-day infrastructure at locations by central and local staff; comprehensive range of
network, activity; and/or little or aside from central offices; no or limited sharing of up-to-date software
and e-mail no usage by staff of equipment sharing may be equipment is necessary; applications; all staff has
existing IT infrastructure common; satisfactory use limited accessibility for individual computer access
of IT infrastructure by frontline program and e-mail; accessible by
staff deliverers; high usage frontline program deliverers
level of IT infrastructure as well as entire staff; used
by staff; contributes to regularly by staff; effective
increased efficiency and essential in increasing
staff efficiency
Technological Organization Basic Web site Comprehensive Sophisticated,
infrastructure Web has no individual containing Web site comprehensive
site Web site general information, but containing basic and interactive Web site,
little information on information on regularly maintained and
current developments; organization as well as kept up to date on latest
site maintenance is a up-to-date latest area and organization
burden and performed developments; most developments; praised for
only occasionally information is its user-friendliness and
organization-specific; depth of information;
easy to maintain and includes links to related
regularly maintained organizations and useful
resources on topic
addressed by organization
 Technological No systems Electronic data- Electronic data- Sophisticated,
infrastructure for tracking bases and base and comprehensive
databases and clients, staff volunteers, management reporting management reporting electronic database and
management program outcomes and systems exist only in few systems exist in most management reporting
reporting systems financial information areas; systems perform areas for tracking clients, systems exist for tracking
only basic features, are staff, volunteers, program clients, staff, volunteers,
awkward to use or are outcomes and financial program outcomes and
used only occasionally by information; commonly financial information; widely
staff used and help increase used and essential in
information sharing and increasing information
efficiency sharing and efficiency
Ve n t u r e P h i l a n t h r o p y Pa r t n e r s
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McKinsey Capacity
Assessment Grid VI. ORGANIZATIONAL 1 Clear need for 2 Basic level of 3 Moderate level of 4 High level of
STRUCTURE increased capacity capacity in place capacity in place capacity in place

Board governance Board does Roles of legal Roles of legal Legal board,
not scrutinize board, advisory board, advisory advisory board
budgets or audits, does board and management board, and managers are and managers work well
not set performance are clear; board functions clear and function well; together from clear roles;
targets and hold CEO/ED according to by-laws, board reviews budgets, board fully understands and
accountable or does not reviews budgets, and audits, IRS and state fulfills fiduciary duties; size
operate according to occasionally sets filings; size of board set of board set for maximum
formal procedures; organizational direction for maximum effectiveness with rigorous
executive, treasury, and and targets, but does not effectiveness with nomination process; board
board functions unclear regularly review CEO/ED rigorous nomination actively defines
performance, monitor process; board co-defines performance targets and
potential conflicts of performance targets and holds CEO/ED fully
interest, scrutinize actively encourages accountable; board
auditors, or review IRS CEO/ED to meet targets; empowered and prepared to
and state filings annual review of CEOs hire or fire CEO/ED if
performance, but board necessary; board
not prepared to hire or fire periodically evaluated
CEO
Organizational Organizational Some organiza- Organizational Roles and respon-
design entities tional entities entities are sibilities of all
(e.g., headquarters, are clearly defined, others clearly defined; all roles organizational entities
regional and local offices) are not; most roles and and responsibilities of (e.g., headquarters, regional
are not designed, and responsibilities of organizational entities are and local entities) are
roles, responsibilities of organizational entities are formalized but do not formalized, clear and
entities are neither formalized but may not necessarily reflect complement each other;
formalized nor clear; reflect organizational organizational realities; organization chart is
absence of organization realities; organization organization chart is complete and reflects
chart chart is incomplete and complete but may be current reality
may be outdated outdated
 Interfunctional Different Interactions All programs Constant
coordination programs and between and units and seamless
organizational units different programs and function together integration between
function in silos; little or organizational units are effectively with sharing of different programs and
dysfunctional generally good, though information and organizational units with
coordination between coordination issues do resources; few few coordination issues;
them exist; some pooling of coordination issues relationships are dictated by
resources organizational needs (rather
than hierarchy or politics)
Individual job design Lack of positions Positions exist All key roles All roles have
created to for most key have associated associated
address a number of key roles, with a few still positions; most dedicated positions; all
roles (e.g. CFO, HR, missing; most key individuals have well- individuals have clearly
learning and positions are well-defined defined roles with clear defined core roles which
measurement); unclear and have job descriptions; activities and reporting must be achieved and an
roles and responsibilities some unclear relationships and minimal area of discretion where
with many overlaps; job accountabilities or overlaps; job descriptions they can show initiative and
descriptions do not exist overlap in roles and are continuously being try to make a difference;
responsibilities; job redefined to allow for core roles are defined in
descriptions tend to be organizational terms of end-products and
static development and services rather than
individuals growth within activities; individuals have
their jobs the ability to define their
own activities and are
empowered to continuously
reexamine their jobs
Ve n t u r e P h i l a n t h r o p y Pa r t n e r s
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McKinsey Capacity 1 Clear need for 2 Basic level of 3 Moderate level of 4 High level of
Assessment Grid VII. CULTURE increased capacity capacity in place capacity in place capacity in place
Performance as Employees Performance Employee All employees
shared value are hired, contribution contribution are system-
rewarded and promoted is occasionally used and to social, financial and atically hired, rewarded and
for executing a set of may be one of many organizational impact is promoted for their collective
tasks/duties or for no criteria for hiring, typically considered as a contribution to social,
clear reason, rather than rewarding and promoting preeminent criterion in financial and organizational
for their impact; decisions employees; performance making hiring, rewards impact; day-to-day
are mostly made on gut data is used to make and promotion decisions; processes and decision
feeling decisions important decisions about making are embedded in
the organization are comprehensive performance
embedded in thinking; performance is
comprehensive constantly referred to
performance thinking
Other shared beliefs No common Common set Common set Common set
and values set of basic of basic beliefs of basic beliefs of basic beliefs
beliefs and values exists exists in some groups held by many people and values (e.g., social,
within the organization within the organization, within the organization; religious) exists and is
but is not shared broadly; helps provide members a widely shared within the
values may be only sense of identity; beliefs organization; provides
partially aligned with are aligned with members sense of identity
organizational purpose or organizational purpose and clear direction for
only rarely harnessed to and occasionally behavior; beliefs embodied
produce impact harnessed to produce by leader but nevertheless
impact timeless and stable across
leadership changes; beliefs
clearly support overall
purpose of the organization
and are consistently
harnessed to produce
impact
 Shared references No major Common set Common set Common set of
and practices common set of references of references references and
of practices and and practices exists in and practices exists, and practices exist within the
references exists within some groups within the are adopted by many organization, which may
the organization (such as organization, but are not people within the include: traditions, rituals,
traditions, rituals, shared broadly; may be organization; references unwritten rules, stories,
unwritten rules, stories, only partially aligned with and practices are aligned heroes or role models,
heroes or role models, organizational purpose or with organizational symbols, language, dress;
symbols, language, dress) only rarely harnessed to purpose and occasionally are truly shared and
produce impact harnessed to drive adopted by all members of
towards impact the organization; actively
designed and used to clearly
support overall purpose of
the organization and to drive
performance
Ve n t u r e P h i l a n t h r o p y Pa r t n e r s
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