Abstract

The paper analyses the institutional and financial capacity of territorial communities as an integrated characteristic of local governance. Capacity is interpreted not only as the availability of budget revenues, but also as the ability of local authorities to plan, organise services, manage assets and investments, maintain qualified staff, cooperate with neighbouring communities and respond to changing conditions. Official assessments of financial capacity show significant differentiation among Ukrainian communities, which makes a uniform management model ineffective. The paper proposes a capacity-management approach based on a local indicator dashboard, medium-term planning, prioritisation of services, intermunicipal cooperation, professional development and project portfolio management. Particular emphasis is placed on linking financial indicators with service outcomes rather than evaluating communities only by revenue levels.