California’s Local Control Funding Formula (LCFF) has introduced changes that alter the conditions under which educators, administrators, and community leaders approach their roles in the K-12 education system. Consequently, leaders at all levels may need to build the capacity—both the knowledge and skills and the resources—that they need to fulfill the potential of the new funding formula. This brief, the second in a series from the California Collaborative exploring LCFF implementation issues, highlights some of those capacity needs. Recognizing and addressing the demands for improved capacity at all levels of the system will be essential for achieving success with the new funding system.