Capacity Building is, however, not limited to international aid work. More recently, capacity building is being used by government to transform community and industry approaches to social and environmental problems.
By 1991 the term had evolved and become 'capacity building'. UNDP defined 'capacity building' as the creation of an enabling environment with appropriate policy and legal frameworks, institutional development, including community participation (of women in particular), human resources development and strengthening of managerial systems, adding that, UNDP recognizes that capacity building is a long-term, continuing process, in which all stakeholders participate (ministries, local authorities, non-governmental organizations and water user groups, professional associations, academics and others. (citation: UNDP).
By 1998 the UN General Assembly had commissioned and received evaluations of the impact of the UN system's support for capacity building. These evaluations were carried out as part of the UN General Assembly's triennial policy review during which it looks at and provides overall guidance of all UN system development activities. For further details see UN publications available on line at http://www.un.org/esa/coordination/Capacity_Building_supported_by_the_UN.pdf and http://www.un.org/esa/coordination/Capacity_Building_for_Poverty_Eradication.pdf
The WCO defines capacity building as "activities which strengthen the knowledge, abilities, skills and behaviour of individuals and improve institutional structures and processes such that the organization can efficiently meet its mission and goals in a sustainable way."It is, however, important to put into consideration the principles that govern community capacity building.
It also interfaces with some work by the New Institutional Economics association led notably by the 1994 Nobel prize winner Douglass North. It tries to lay out the essential organisational and institutional prerequisites for economic and social progress (See the paper by North, Wallis and Weingast) modestly entitled 'A conceptual framework for interpreting recorded human history', NBER working paper 12795, www.nber.org/papers/w12795.
Capacity building is defined as the "process of developing and strengthening the skills, instincts, abilities, processes and resources that organizations and communities need to survive, adapt, and thrive in the fast-changing world." (Ann Philbin, Capacity Building in Social Justice Organizations Ford Foundation, 1996)
For organizations, capacity building may relate to almost any aspect of its work: improved governance, leadership, mission and strategy, administration (including human resources, financial management, and legal matters), program development and implementation, fundraising and income generation, diversity, partnerships and collaboration, evaluation, advocacy and policy change, marketing, positioning, planning, etc. For individuals, capacity building may relate to leadership development, advocacy skills, training/speaking abilities, technical skills, organizing skills, and other areas of personal and professional development. (Evaluation of Capacity Building: Lessons from the Field by Deborah Linnell, published by the Alliance for Nonprofit Management)
Capacity building is the elements that give fluidity, flexibility and functionality of a program/organization to adapt to changing needs of the population that is served.
The Municipality of Rosario, Batangas, Philippines provided a concrete example related to this concept. This municipal government implemented its Aksyon ng Bayan Rosario 2001 And Beyond Human and Ecological Security Plan using as a core strategy the Minimum Basic Needs Approach to Improved Quality of Life - Community-Based Information System (MBN-CBIS) prescribed by the Philippine Government.
This approach helped the municipal government identify priority families and communities for intervention, as well as rationalize the allocation of its social development funds. More importantly, it made definite steps to encourage community participation in situation analysis, planning, monitoring and evaluation of social development projects by building the capacity of local government offcials, indigenous leaders and other stakeholders to converge in the management of these concerns.