Creating and Validating a Capacity Measure for Nonprofit Organizations

Currently, there is no standardized, validated measure of nonprofit capacity that makes cross-organizational comparisons and research studies almost impossible. In addition, these shortcomings impede suggestions for nonprofit practitioners and educators, hindering the development of professional and educational curricula. This paper presents a new measure of nonprofit capacity based on the utilization of exploratory and confirmatory factor analysis. With a national sample of U.S.-based nonprofit organizations (N=1,216), the six factor model explained 69.6% of total variance in nonprofit capacity. Those six factors and respective variance are: (1) board 14.8%, (2) the influence of the external environment 13.4%, (3) program development 11.9%, (4) mission centrality 11.4%, (5) management capacities 9.8%, and (6) funding 8.6%. A standardized measure, such as the one created here, allows research across nonprofit subsectors and for cross-organizational research in a more systematic way. Without cross-organization comparisons, we cannot know if we are truly teaching best practices.