Sometimes referred to as technical assistance, market and capabilities development refers to actions taken to build the market for an area of impact and/or develop capabilities needed to realize impact investments and ensure their success. 

Examples of market and capabilities development often include high-profile development projects such as Gavi, the vaccine alliance, which shaped markets by aggregating demand and providing producers with guarantees in order to reduce vaccine prices. Gavi, which has been tremendously successful at helping to protect all children from preventable diseases, also required significant capabilities development – in areas such as global stakeholder collaboration and rapid rollouts – to work.

But market and/or capabilities development is just as often required alongside smaller investments to ensure their success. For example, in my last blog post I discussed how a philanthropist used strategic philanthropy tools and practices to successfully award $1 million to a trading non-profit community organization operating in the indigenous art world. This project required that the organization develop its capabilities in:

• Sales and marketing to reduce its reliance on donations and increase its overall financial sustainability. 
• Strategic management to tap into synergies that exist in the alignment of indigenous art production, commercial demand and cultural development to unlock additional social, commercial and cultural value such that revenue generation and the achievement of social and cultural missions are combined in the same activities.
• Relationship building to strengthen the relationship with government by educating them on the central role culture plays in the creation of commercial and social value in the indigenous art market, and on the need to continue to invest in art-focused programs to achieve social and commercial goals that will encourage capacity building and economic development in the community over the long-term and empower it to provide for itself. 

Market and capabilities development is an integral but often overlooked part of how funders can generate more value and impact from their funding dollars. It requires resources that sit alongside the original investment to ensure the project’s overall success. 

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