Measuring Nonprofit Capacities in the Context of Unrestricted Funding: A Case Study on Nonprofits Supporting Homeless People in the Netherlands

Abstract

Philanthropic funders increasingly use more unrestricted or flexible grantmaking, with the aim of strengthening nonprofit organizations and their capacities. Empirical research in this area is, however, limited, partly because of a lack of available data. This research note explores whether an existing longitudinal practice-based survey can be applied to measure nonprofit capacities as conceptualized in the academic literature. We analyze 68 drop-in centers for people experiencing homelessness in the Netherlands that receive unrestricted support from an endowed foundation. Our results reveal several gaps in existing measurement frameworks and suggest new potential sub-dimensions of nonprofit capacity. We construct reliable multi-item scales for strategic planning and external communication and identify additional dimensions—positioning and board continuity, staff and volunteer policy, internal mission orientation, and external mission orientation—that extend current conceptual models. By tracking changes in these capacities over time, we demonstrate the potential of practical longitudinal surveys for studying organizational development. The insights can be used by researchers and practitioners to advance empirical research on nonprofit capacity building.