This section addresses building the capacity of nonprofit organizations so that they can be more equipped to effectively engage in public policy activities. Because of the shrinking size of government, the nonprofit sector must increasingly provide services and roles previously administered at the federal, state and local government levels. In many areas, nonprofit organizations are the primary service providers, especially in human services. Despite the increased expectation that nonprofits provide needed social infrastructure, the nonprofit sector has very little voice in government funding and policy decisions.

In some regions such as the San Francisco Bay Area, nonprofit associations like the Human Services Network and the Silicon Valley Council of Nonprofits were created to address this gap. Foundation support of these efforts can greatly expand nonprofits' capacity to engage in public policy advocacy.

Nonprofits often do not participate in public policy advocacy because they either do not know what is legally permissible, or they fear jeopardizing funding streams. According to the Strengthening Nonprofit Advocacy Project (SNAP) initiative, the top three barriers to policy participation are a) limited financial resources, b) tax laws, and c) limited staff or volunteer skills. These factors often cause nonprofit staff and board members to be overly cautious about engaging in public policy efforts. Furthermore, many foundations do not feel that public policy is directly related to their mission, so their grantees may feel hesitant to explicitly engage in public policy related activities.

Foundations have a unique and important role to play in helping grantees to engage in advocacy and public policy formation in a variety of ways:

• Foundations can provide grants specifically for capacity building and technical assistance. This can be especially useful for community based organizations that may have a good sense of the issue or problem, but not the internal skills to use that knowledge to affect public policy.
• Foundation staff can provide training and technical assistance on legal and procedural issues directly to grantees.
• Foundations can encourage grantees to reflect on public policy and its relevance to their work by incorporating questions about public policy engagement into their proposal guidelines, site visits, and other information-gathering activities.
• Foundations can support intermediaries and coalitions. No one organization alone can create public policy change. Supporting grantees to network and share resources, strategies, and information is an important role.
• Foundations can clearly articulate their motives for supporting public policy engagement.
• Foundations can discuss with their grantees the costs and benefits of the 501(h) election. [For more information on the 501(h) election, please see the Legal Parameters section of the Toolkit.]