“Capacity Building” as a term is relatively modern. It evolved in early 90s from the term “Institution Building”. Being new the term is yet to be precisely defined. However, there are few available definitions which also vary from one to another. The business dictionary defines “Capacity Building” as “planned development of (or increase in) knowledge, output rate, management, skills, and other capabilities of an organization through acquisition, incentives, technology, and training”. The concept of “Capacity Building” was first massively pursued by UN DP with the aim to enhance capacities of various communities. The UN DP defined the term as “the creation of an enabling environment with appropriate policy and legal frameworks, institutional development, including community participation, human resources development and strengthening managerial systems”.

The “Capacity Building” is a contemporary and modern concept of development which is a long-term and continuous process, and in which usually all stake-holders has a role to play. 

The term “Capacity Building” is does not only mean the capability enhancement of the personnel of an organization. And does not, therefore focus on training only. The broad aspects of “Capacity Building” includes:

1) Human Resources Development.    The process of equipping personnel with the understanding, skills and access to information, knowledge and training that enables them to perform effectively and efficiently.

2) Organizational Development.  This also deals with the development of management structures, processes and procedures. The range of its application surpasses common boundary and includes management of relationships between the different organizations and sectors i.e. public, private and community.

3) Institutional and Legal Framework Development.     It also builds legal and regulatory frameworks of an organization with the purpose of making it more functional and effective.