What can nonprofits use capacity building grants for? Legal services, and a whole lot more
… and Narwhal Can Help From the Start
By: Michael Jonas, JD, MBA
Owner & Attorney, Narwhal Law and Business Strategy
When people think about capacity building, they often picture leadership development, new software, strategic planning, or fundraising tools. All of those are essential—but one area is often overlooked, even though it underpins everything else: legal support.
Whether you’re at a nonprofit refining internal systems or a mission-driven small business preparing to scale, legal services are not a luxury. They are a core part of organizational infrastructure, and many funders are finally recognizing that.
That’s why more capacity building grants—from city agencies, counties, and private foundations—now include funding for legal services. At Narwhal Law and Business Strategy, we’ve been at the forefront of this shift, helping organizations and funders integrate legal strategy into their growth plans.
What Are Capacity Building Grants?
Capacity building grants are designed to strengthen an organization’s internal systems, leadership, and long-term sustainability. Rather than directly funding programs or services, these grants support the “backbone” of organizations, ensuring they can function effectively, manage risk, and pursue long-term goals.
These grants often fund:
Strategic and succession planning
Financial systems upgrades
Evaluation and data infrastructure
Technology and digital tools
Human resources development
Governance and board training
Increasingly, they also fund something just as foundational: legal support.
Importantly, even grants that are not labeled as “capacity building” sometimes include a percentage-based or capped amount that can be allocated toward capacity-building needs. For example, a program grant might allow up to 10% of the total award to be used for administrative or organizational strengthening purposes, offering a vital opportunity to invest in legal compliance, infrastructure, and sustainability alongside program delivery.
Specifically Why Legal Services Belong in Capacity Building
Legal services are essential to healthy operations. Period. They provide clarity, prevent crises, and empower organizations to make informed decisions. Including legal support in capacity building grants promotes:
Risk Management: Organizations must understand and comply with relevant laws to avoid liability, fines, and reputation damage. Legal assessments and compliance work are a must.
Operational Efficiency: Sound legal infrastructure (clear contracts, policies, and procedures) reduces confusion and delays in day-to-day operations.
Long-Term Sustainability: From board governance to employee handbooks to intellectual property protection, legal strategy supports your growth, succession planning, and resilience.
Types of Legal Services Commonly Covered
Funders increasingly recognize that investing in legal services makes their grantees stronger. Commonly covered legal support includes:
Legal Compliance Development: Help navigating nonprofit law, licensing, employment rules, tax-exemption, environmental regulations, and more.
Legal Advice and Consultation: Support drafting and reviewing contracts, liability waivers, MOUs, sponsorships, lease agreements, and other documents.
Legal Education and Training: Workshops, templates, and coaching to build legal literacy among boards, staff, and leadership teams.
Impact Litigation or Advocacy: In some cases, funders support legal efforts that protect community rights or advance systems change. These strategic legal actions benefit more than just one organization; they uplift the whole community.
Narwhal Can Help! Before, During, and After the Grant
Legal services shouldn’t be an afterthought and we don’t treat them like one. At Narwhal Law and Business Strategy, we can support before the grant is awarded, not just once funding is in hand.
We work with:
🔹 Grantors
Cities, counties, and foundations can contract directly with Narwhal to provide legal capacity-building support to grantees, either as part of a larger cohort or tailored to specific organizations.
🔹 Grantees
If you're applying for a capacity building grant, you can name Narwhal as your legal strategy partner. This not only gives your application more credibility; it also reassures funders that you’ll be compliant, supported, and set up for long-term success.
🔹 Collaborators
We work across sectors (nonprofit, for-profit, and government) to build custom legal toolkits, deliver legal education, and co-create compliance strategies aligned with your mission.
A Word About This Moment
With the political landscape shifting—especially amid the uncertainty of a potential second Trump administration—organizations may face increased scrutiny or legal risk. Executive orders, policy rollbacks, and vague anti-terrorism laws are already creating tension for many grassroots, culturally specific, and advocacy-based organizations.
Legal preparedness isn’t fear-based, it’s future-focused. Now is the time to invest in compliance, documentation, and risk planning.
Final Thoughts
Legal services are not extra. They are essential to smart, sustainable growth. When funders include legal support in their capacity building grants and when organizations take advantage of those opportunities, everyone benefits.
Whether you’re designing a grant program, applying for funding, or building your internal infrastructure, Narwhal is here to help—early, often, and with purpose.
