Nonprofit organizations (NPOs) play an important role in delivering social services to those in need. Capacity-building efforts for NPOs derive from funders’ desire to increase NPOs’ effectiveness and redress problems associated with limited administrative and organizational capacity. Through technical assistance, training, and grant funds, funders aim to enhance NPO functioning and ultimately improve client outcomes. Despite a general consensus about the importance of capacity building, little high-quality evidence exists on the impact of capacity-building investments. This article presents the findings from the first random assignment evaluation to be conducted in the field of nonprofit capacity building. The subject of the evaluation was one of country’s largest organizational capacity-building initiatives, the federal government’s Compassion Capital Fund (CCF) Demonstration Program. Findings from the evaluation provide clear evidence that capacity-building efforts increase capacity in each of five critical areas of capacity.