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Social capital and community capacity have become key concepts in social policy responses to marginalised individuals and communities. Policy making has occurred in the context of heated debate about the roles of government and business institutions in strengthening community capacities. In this paper, we wilt explore theoretical positions about the role that these institutions play in building local social capital. We argue that the dominant conceptions of social capital in Australia fail to recognise the potential for non-local institutions to strengthen local community capacity. Drawing on a study of four geographically diverse communities we show that a substantial proportion of community members were disconnected from non-local government and business institutions. We conclude with some initial suggestions for extending the social capital discourse to recognise and build the role of non-local institutions in strengthening local communities. [ABSTRACT FROM AUTHOR]