Key Definitions
A PRIMER ON MULTI-ENTITY POWER-BUILDING
Multi-Entity Defined
Multi-entity organizations use more than one legal entity—often 501(c)(4)s, 501(c)(5)s, PACs, or corporate entities, in addition to 501(c)(3)s—to build power and influence.
The Challenge of Multi-Entity Work
Multi-entity work is complex. Leaders must navigate tax, employment, and compliance laws; build new systems to manage resources across legal entities; accurately track and report political activity; engage multiple stakeholders to coordinate strategy; and find new attorneys, accountants, and others with unique multi-entity expertise.
Why Multi-Entity Work is Required to Build Power
Although 501(c)(3)s do important work, they cannot engage in the full range of strategies and tactics that build and sustain power. Only non-(c)(3)s (e.g., 501(c)(4)s, PACs, corporate entities, etc.) can participate in critical strategies like unlimited lobbying, political activity, independent expenditures, and/or the endorsement and funding of candidates. These strategies are central to achieving and implementing electoral, legislative, administrative, and judicial victories that improve people’s lives.
NLA’S Definition of Power
While there are many definitions of power, for NLA, we mean the power to win and protect policy change, which requires the ability to effectively organize and mobilize a diverse grassroots base to:
- Elect and protect progressive majorities at all levels of government.
- Pass and defeat ballot initiatives and legislation.
- Co-govern with elected officials to draft, implement, and protect progressive policies that advance racial, social, and economic justice.
- Hold elected officials accountable.
“In philanthropy we need to do a better job understanding that it takes a lot of capacity to build power. Organizations cannot have only a risk management approach to their work; they need to have a sophisticated strategy to win. And to do that they need more than (c)(3)s. And if they have more than one organization, we have to get them capacity-building support that actually meets their needs.”
CAPACITY BUILDING DEFINED
The typical way the progressive ecosystem delivers capacity building support is to focus on only one type of organization, usually a 501(c)(3). NLA and TCS engage in what we call “holistic” capacity building. This means we build strategy and capacity across the family of organizations that our leaders work with, rather than looking at only one entity at a time. This allows leaders to
build capacity to integrate their work across legal entities to implement a shared vision.
Through our programs, we accompany organizations as they invest in the development of three core organizational capacities: Strategic, Operational, and Adaptive.
Strategic Capacities:
The capacities and capabilities needed to develop winning strategies and shared values to achieve the organization’s vision and goals. Strategic capacities include: developing a clear North Star for the work (vision, theory of change, mission, values) to guide the entire family of legal entities; developing a shared understanding of the types of power and influence that a family of organizations needs to acquire and wield to accomplish their vision; clarity of the core work the organization executes (i.e., core programs and services) to accomplish that vision; and the creation of short, mid, and long-term strategic goals for the entire family of legal entities.
Operational Capacities:
The capacities and capabilities organizations must have to execute their core strategic and programmatic goals while managing and moving resources (money, people, and knowledge) strategically across their family of organizations. Operational capacities include the ability to acquire and absorb internal and external data, knowledge, and expertise; the ability to develop and maintain the systems, processes, and procedures to execute programs; and the ability to care for and develop staff and maintain financial stability, while staying compliant with applicable laws and regulations. Operational capacity is a critical component of, and directly related to, a family of organizations’ ability to maximize their resources and execute their strategy.
Adaptive Capacities:
“Not looking at a grantee’s (c)(4) is like not looking at half of the body of somebody. How do we not see that when we fail to understand their other entities matter, we are missing the real possibility of their work? We need to start seeing our role as funding in a way that most helps the grantee succeed—and we need information about the legal entities they have to do that.”